Telematics Watch

Roger C. Lanctot

2013: The Year in Blogs or My Year of Writing Dangerously

Waze, Tesla, Nokia, Blackberry, Apple, Google, OnStar. These are the names that we recall looking back on 2013. Incremental progress has been made, but hopes are high for 2014. It is with that progress and hope in mind that I share these links to my blogs from the past year – in case you missed one or two… or all of them. Here they all are:

http://tinyurl.com/kxjhfdw – Black Box Insurance Coming Soon to Your Car

http://tinyurl.com/n8d2h9c – Some Light New Year’s Reading for US Transportation Secretary Anthony Foxx

http://tinyurl.com/lh77bd8 – ‘Twas the Night before Xmas and OnStar is Running Ads and Tracking Santa

http://tinyurl.com/m5hzrha – Rumors of Android Consortium at CES Greatly Exaggerated

http://tinyurl.com/m2vdl7k – A BYOD Thanksgiving in Planes and Automobiles

http://tinyurl.com/njc5x6j – Time to Tune in to Mazda Radio or Honda Radio or…

http://tinyurl.com/my9am7d – Tesla’s Burning Car Response Highlights Industry Blind Spot

http://tinyurl.com/m6pr974 – Why Can’t BMW Figure Out Who I Am?

http://tinyurl.com/kcluo3m – Cars Can and Should be More Like Phones

http://tinyurl.com/qzs5ot2 – ACR Will Transform Radio Engagement

http://tinyurl.com/nvw9x8t – Why Amazon Buying Blackberry Makes Sense

http://tinyurl.com/m46p7ua – Distraction Mitigation, Back-up Cameras, V2V Top US DOT To-Do List

http://tinyurl.com/kunlh6r – Nissan Free Tow Hints at Changing Automotive Customer Relationships

http://tinyurl.com/meud4m7 – A To-Do List for the new U.S. Transportation Secretary – Anthony Foxx

http://tinyurl.com/mtrvujz – New FRA Railroad Crossing App on the Wrong Track

http://tinyurl.com/k58cn3p – Waze Gives the Location Industry a Lesson in How to Create Value

http://tinyurl.com/lxse9rt – Brazil Must Raise Safety Standards Before It Raises Its Car Exports

http://tinyurl.com/k9bazxg – Wearable Transportation within Our Reach

http://tinyurl.com/lv5oxqt – Distracted Driving: It Can’t Wait! – A Message for the NAIC

http://tinyurl.com/mh2ea52 – Siri Pushing My Buttons

http://tinyurl.com/m7ptx4y – Microsoft’s Nokia Acquisition Puts Map Data in the Spotlight

http://tinyurl.com/k3ek83s – Consumers Interested in Self-Driving Cars Despite Industry, Government Obfuscation

http://tinyurl.com/m4rkx7g – AAIA Sounds the Battle Cry over Automotive Service Hegemony

http://tinyurl.com/cqo9ljx – Progressive: Rate Suckers Change up the UBI Message

http://tinyurl.com/cwshd45 – The UK Leads the Way, Again, in UBI Car Insurance

http://tinyurl.com/chvkqa3 – Conflicted Strategies Tangle Virginia, Maryland Transportation Funding

http://tinyurl.com/cn2lmrc – California VIN ECON Next-of-Kin Notification Bill Has Global Implications for Telematics

http://tinyurl.com/aa3kl34 – Brazilian cab passengers benefiting from connectivity via Samsung tablet-based Multitoky Mobile

http://tinyurl.com/lk29r7u – UBI Technology Challenging Old Insurance Industry Customer Relationship Practices

http://tinyurl.com/l7luaut – Dealer Power Failure Could Stop Connected Cars

http://tinyurl.com/k8bjfxb – Tweddle Enabling a New Vehicle Relationship Paradigm

http://tinyurl.com/ldlabrd – The Greatest Disruptive Force in the Automotive Industry – UPDATE*

http://tinyurl.com/mzzefk9 – NADA Phase 2 Factory Image Program Study: Happy Returns from Service Investments

http://tinyurl.com/k9b2orn – Turn Off the Red-Light … Cameras – Safer Intersections are within Reach

http://tinyurl.com/knfylem – Smartphones Can Solve the Map Update Challenge Now!

http://tinyurl.com/m6afmva – Affinity Programs Will Replace Usage-based Insurance Sound and Fury of 2012

January 2nd, 2014 Posted by | Uncategorized | no comments

Terminal Mode, ATX App Challenge OEM Control of Customers, HMI, Security

The arrival of Nokia’s Terminal Mode technology for smartphone integration and ATX Group’s downloadable application for Mercedes-Benz’s TeleAid telematics service has highlighted the intensifying battle between OEMs and third-parties over car owners and the in-vehicle experience. OEMs are being forced into the business of certifying applications for use in the car at the risk of losing control of both the customer and the user experience. And the encroachment of third-party apps is raising serious security concerns.

The introduction of the ATX downloadable app is perhaps the worst case scenario for an OEM given the existing relationship with Mercedes TeleAid subscribers. The application was neither created by Mercedes nor was it certified or approved by Mercedes. The result is the first instance in the industry of a service provider competing with an OEM for the OEM’s customers.

The clever application allows for the wireless transmission of destinations to Mercedes navigation systems equipped with TeleAid connections and also allows for remote door unlock among other features. The purpose of the application is to extend and maintain the existing ATX relationship with legacy TeleAid subscribers. But it is an intrusion most unwelcome at Mercedes headquarters.

Most of the functions offered by the ATX app were made available in a similar app launched by Mercedes last Fall as part of its mbrace telematics service launch. The difference between the two is that mbrace, launched on November 16, 2009, is part of Mercedes’ introduction of a new telematics service relationship with Hughes Telematics.

Aside from the relevance of the ATX announcement to the ongoing contretemps between Mercedes and its service provider (the two have yet to resolve their legal differences), the implications for the industry, telematics and the app store model are critical including:

Management of the telematics service

Ownership of the customer

Control of the telematics marketing message

Control of dealer marketing and incentives

Certification of vehicle related applications

Control of the in-vehicle user experience

But these issues are inherent in the app store model itself. For Mercedes, the mbrace app, for select iPhone and Blackberry smartphones, enables a similar feature set as the ATX app and also sets up the ability for Mercedes to create its own app store. The mbrace app was groundbreaking because it was the first from an OEM to enable remote functions from a handset – demonstrated but not delivered by others – while simultaneously changing the telematics service provider and call center phone numbers – effectively transferring existing TeleAid customers (now using ATX) to the mbrace service.

Mercedes even stated plans to introduce new applications periodically, the first of which are expected to arrive later this summer, propelling Mercedes to the front of the automotive app store class, where it is now joined by Ford (which seems to introduce new applications monthly). The ATX announcement, however, reveals the proverbial fly in the app store ointment. If ATX can divert Mercedes’ TeleAid customers, which OEM will be the next to see an app divert their customers?

ATX’s app allows the existing TeleAid subscribers, of which there are an estimated 400,000, to maintain their relationship with ATX and provides them with functionality similar to that offered by the new mbrace service. Since customers are paying ATX in total nearly $100M for the service, this is important. To help drive the message home, ATX is offering Mercedes dealer sales personnel $100 spiffs to communicate the message to existing Mercedes owners. (The only service being offered by dealers on new vehicles is the mbrace service.)

Meanwhile, Mercedes is offering a 20% commission – worth about $100 – to dealer F&I and sales executives to promote longer-term (18 month) initial mbrace subscriptions. (Customers already get six free months of the basic service and three free months of the Plus service which includes concierge support among other functions.) There is the potential for a mixed message here, although the ATX message is only for existing owners, while mbrace is targeted at both existing owners and purchasers of new Mercedes cars. (A recent visit to a Mercedes dealer revealed no visible onsite literature or POP materials for either TeleAid or embrace – ie. telematics is still not part of the core Mercedes message. To top of the lack of telematics enthusiasm at the dealership, the F&I exec said he didn’t see the need for telematic services since he owned an iPhone!)

Because of the terms of its now concluded agreement with ATX, Mercedes cannot promote, sell or install the mbrace service for any Mercedes vehicles purchased between Nov. 16, 2008 and Nov. 16, 2009 until after Nov. 16, 2010. It is also for this reason that Mercedes is hampered in its marketing and promotion of mbrace, although various Mercedes Websites make clear that the only service currently endorsed by the company is mbrace.

The irony in this battle for customer ownership between ATX and Mercedes is that the average Mercedes customer is likely not purchasing the vehicle for the telematics service. Little or no advertising activity is committed to conveying the telematics message. And, yet, with an estimated 400,000 subscribers paying upwards of $240 per year, the revenue stream is valuable to ATX, Hughes and Mercedes.

Although unique, the ATX-Mercedes situation is analogous to the emerging automotive app store proposition. Nearly every OEM is scrambling to demonstrate or introduce an app store strategy of some kind following the perceived success of Ford’s Sync model. But no one is pondering the potential for an application to commandeer an OEM’s marketing, sales and telematics strategy as well as the user experience in the vehicle.

Nokia’s Terminal Mode capability has raised similar questions of control of the user experience in the car. It is for this reason that Delphi introduced its own alternative to terminal mode which provides for a Delphi application certification process and OEM control of the HMI (http://bit.ly/94Mn1V). The broad industry perception of the Nokia solution, which reproduces the display of a mobile device into the vehicle and enables the use of on-board interfaces, is that it fundamentally alters the carefully crafted vehicle HMI.

There is no doubt that no single company – Nokia, Delphi, RealVNC, Airbiquity, Continental, Parrot, etc. – will control the critical smartphone interface. But what is clear is that it has become a critical battleground

Not surprisingly, Apple must be watching these developments and snickering. Apple’s iPhones have enabled a wide range of services, application and content delivery to drivers with marketing, revenue and HMI implications outside of the scope of the OEM’s plans. Customers enter dealer showrooms on a daily basis looking for cars with which their devices can connect – the classic case of the tale wagging the dog.

The Mercedes-ATX situation provides a glimpse of a brave new world where car makers are simple pawns in a chess match controlled by carriers, handset makers, application developers and service providers all seeking to extract revenue from car owners. The good news is there is opportunity for those companies able to offer a secure smarthone interface that enables an OEM’s brand definition.

OEMs have already taken steps to create certification procedures along with their own in-house development teams. Car makers will never have complete control over applications such as Internet radio or location-based services. But applications that tap into vehicle data and functions, such as remote door unlocking or vehicle starting, are areas that OEMs will demand control.

Mercedes’ new telematics partner, Hughes, was once the ultimate embodiment of the external third party seeking to implant a revenue-generating module in consumer vehicles. The automotive industry rejected the Hughes model – particularly its hardware platform – opting instead, as in the case of Mercedes, to leverage the Hughes back-end infrastructure.

What could help to make all parties play nicely together is revenue sharing. OEMs clearly want a cut from the stream of revenue flowing from off-board applications. The long-term winners will be those solution providers that provide for that OEM piece of the action and, most importantly, bullet-proof security.

Hughes had the right idea: to create a platform in the vehicle for accessing revenue-generating content, services and applications. Little did Hughes know at its inception that the smartphone would replace its embedded module. OEMs know now that they must take the steps today to create the connections and define the relationships that will allow for mobile device connectivity while keeping the OEM in a secure user experience/revenue producing loop.

June 5th, 2010 Posted by | Uncategorized | no comments

Opportunity for Linux in Automotive Recession

By Roger C. Lanctot

With automobile production and sales plunging and vehicle inventories bulging, multiple opportunities are emerging to change the structure of the industry. Change is coming from within the industry in the form of car makers wanting to save time and money designing vehicles, and it is coming from outside the industry in the form of technology companies seeking greater influence and market share.

Over the past four or five years control of automotive technology has been quietly shifting from Detroit to Germany. Now, with car companies resorting to desperate means to reduce expenses and compete more effectively, Intel and Wind River have stepped in, in a partnership with BMW, to fundamentally alter the design process.

Formally announced at CeBIT last month, this new initiative, called Genivi, is designed to bring Linux into the automobile as a way for car makers and their suppliers to share and reuse software code to speed product development. The Genivi initiative emerges as a third alternative to the two dominant operating systems in the automotive market: Microsoft Auto and QNX.

The significance of the announcement at CeBIT was not clear at the time given that the roster of supporting industry players was not the usual roster of dominant German car makers. Instead, standing on the dais proclaiming their support of Genivi were Visteon, Delphi, General Motors, PSA Peugeot Citroen and Magneti Marelli. While some might have interpreted the support of some of these companies as indicating desperation, the presence of GM represented an important endorsement.

GM is perceived in the industry as a strong supporter of Genivi and, by extension, Linux in the car. The support might surprise some given the fact that GM uses QNX’s real-time operating system as part of its OnStar system. But the promise of re-usable code and the ability to tap into a growing application development community are proving overwhelmingly attractive.

Car companies not currently participating in Genivi, such as Daimler and Volkswagen, and tier ones still nursing captive operating systems, such as Robert Bosch, are giving Genivi are a hard look. More car makers and their suppliers are expected to jump aboard the Genivi bandwagon.

The emergence of Genivi reflects the growing need for the automotive industry to orient itself more directly toward the consumer electronics market. The consumer electronics market is increasingly characterized by connectivity and by dominant “platforms” for which applications, content and services are targeted.

The goal of the Genivi coalition is to turn the automobile into a platform for which developers can develop applications and services. The only two high profile players in the automotive space currently developing in Linux are Hughes Telematics and BMW, but that is expected to change soon.

As an example, Robert Bosch currently makes use of an in-house operating system, T-Engine, and is in the process of determining what operating system path to take: Microsoft, Genivi or QNX. QNX is virtually ruled out because it is property of Harman International, a competitor.

For its part, QNX has positioned its operating system development environment as an open one within which developers can share code and other enhancements. Even with that capability, though, QNX will never be able to offer the application developer community support that currently stands behind Microsoft and Linux.

While it will be years before the impact and influence of the Genivi coalition is completely appreciated, there is no doubt that there will be a significant role for Linus to play in the development of a wide range of automotive application developments today and in the future. Expect more OEMs and tier ones to join the coalition in the coming months.

April 8th, 2009 Posted by | Uncategorized | no comments

Global Automotive Leadership Lives on in Motor City

The technology marriage of Ford and Microsoft, unlikely though it seems, will serve as the most enduring memory of 2008 in the auto industry – outside of the sales collapse and bailout. Long after the industry has recovered, car makers and their suppliers will view Ford’s embrace of the Sync solution as a critical turning point.
As the industry prepares for the latest annual installment of the Consumer Electronics Show in Las Vegas, January 8-11, the short-term outlook could not be much more grim. In spite of a surfeit of innovation, consumers are simply not buying cars and OEMs are experiencing a world of hurt preventing them from supporting emerging technologies and new suppliers.
The global automotive industry has forever looked to the U.S. for direction and innovation. Without Washington’s help, this industry leadership might have been lost.
In spite of the gloom, Microsoft and Ford will once again grab the spotlight at CES highlighting automotive technology advancements that may finally slice through the dark clouds. With mobile electronics sales in a swoon, Microsoft and Ford are in an ideal position to show the industry a path to salvation.
Many new solutions from new suppliers will be on display at CES, but the logjam created by weak consumer demand is likely to translate to failure and frustration for many. In the current climate, technology companies need to pursue opportunities on a global scale in order to achieve sufficient volumes. The good news is that CES remains a powerful international platform for introducing new solutions.
But the importance of the marriage of Ford and Microsoft must not be underestimated, nor can its role at CES be overstated. Ford is one of a handful of car companies with global reach.
While not previously known as a technology leader, the partnership between Microsoft and Ford delivers instant legitimacy to both Ford and Microsoft. Ford gains from its association with Microsoft and its industry-standard computer solutions. Microsoft benefits from bringing low-cost automotive technology solutions to a wide motoring audience – a strategy first tested in Europe with the Fiat Blue&Me connectivity platform.
The power of the partnership was made most clear from Microsoft’s advertising campaign in support of Ford Sync. In many of the ads for this Bluetooth-USB connectivity system there was no mention of Ford! It was all about the technology. As an exclamation point on the effort, Ford is projected to announce the one-millionth vehicle delivered to a customer with Ford Sync technology.
Over the past 2-3 years, an increasing number of car makers from around the world have made a point of attending CES, as have their suppliers. Some of these companies – including Ford, General Motors and BMW in 2008 – have used CES as a platform for establishing their technology credentials.
This same pattern will be fulfilled in 2009 with Ford, BMW, GM and Hyundai making presentations, showing their vehicles and generally seeking to benefit from any positive buzz thrown off by the event. In fact, Microsoft is deeply embedded with Hyundai, which means the Redmond-based software supplier is working closely with three of the top 10 car makers in the world spanning Europe, Asia-Pacific and North American markets.
Though not a Microsoft partner, it is important to note BMW’s participation at CES. While the company may be the pre-eminent automotive technology leader, it simply does not make enough cars to lead the industry.
This is the point that is perhaps lost on the average observer of the proposed Washington bailouts for the U.S. auto industry. Today, U.S. car makers still account for a substantial percentage of worldwide vehicle production. GM and its OnStar unit are still the world’s leading telematics supplier. Without support from Washington this volume leadership and its implications for industry leadership will be lost.
Watch for significant announcements for mobile electronics at CES ranging from rearseat entertainment to OnStar-like telematics or simple Bluetooth connectivity, but amidst the hoopla remember the role and impact of U.S. car makers.

December 30th, 2008 Posted by | Uncategorized | no comments

Ford, Microsoft to Seize CES Spotlight Again

As the industry prepares for the latest annual installment of the Consumer Electronics Show in Las Vegas, January 8-11, the outlook could not be much more grim. In spite of a surfeit of innovation, consumers are simply not buying and OEMs are experiencing a world of hurt preventing them from supporting emerging technologies and new suppliers.
In spite of the gloom, Microsoft and Ford will once again grab the spotlight at CES highlighting automotive technology advancements that may finally slice through the dark clouds. With mobile electronics sales in a swoon, Microsoft and Ford are in an ideal position to show the industry way.
Many new solutions from new suppliers will be on display at CES, but the logjam created by weak consumer demand is likely to translate to failure and frustration for many. In the current climate, technology companies need to pursue opportunities on a global scale in order to achieve sufficient volumes. The good news is that CES remains a powerful international platform for introducing new solutions.
But the importance of the marriage of Ford and Microsoft must not be underestimated, nor can its role at CES be overstated. Ford is one of a handful of car companies with global reach.
While not previously known as a technology leader, the partnership between Microsoft and Ford delivers instant legitimacy to both Ford and Microsoft. Ford gains from its association with Microsoft and its industry-standard computer solutions. Microsoft benefits from bringing low-cost automotive technology solutions to a wide motoring audience – a strategy first tested in Europe with the Fiat Blue&Me connectivity platform.
The power of the partnership was made most clear from Microsoft’s advertising campaign in support of Ford Sync. In many of the ads for this Bluetooth-USB connectivity system there was no mention of Ford! It was all about the technology. As an exclamation point on the effort, Ford is projected to announce the one-millionth vehicle delivered to a customer with Ford Sync technology.
Over the past 2-3 years, an increasing number of car makers from around the world have made a point of attending CES, as have their suppliers. Some of these companies – including Ford, General Motors and BMW in 2008 – have used CES as a platform for establishing their technology credentials.
This same pattern will be fulfilled in 2009 with Ford, BMW and other car makers making presentations, showing their vehicles and generally seeking to benefit from any positive buzz thrown off by the event.
It is important to note BMW’s participation. While the company may be the pre-eminent automotive technology leader, it simply does not make enough cars to lead the industry.
This is the point that is perhaps lost on the average observer of the proposed Washington bailouts for the U.S. auto industry. Today, U.S. car makers still account for a substantial percentage of worldwide vehicle production volume. Without support this volume leadership and its implications for industry leadership may be lost.
Watch for significant announcements for mobile electronics at CES ranging from rearseat entertainment to OnStar-like telematics or simple Bluetooth connectivity, but amidst the hoopla remember the role and impact of U.S. car makers.

December 25th, 2008 Posted by | Uncategorized | no comments