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Reverse innovation – it’s the way forward!

Megan Lampinen talks to Harman India about developing global products in emerging markets

The globalisation of automotive brands has written and rewritten product development strategies over the years – but everything we know about global branding strategies could soon be turned on its head once again.

The idea that products are more likely to resound well with consumers if they are customised for a particular region led to the emergence of the notion of ‘glocalisation’. For most vehicle manufacturers and suppliers, this meant taking innovation that was developed in mature markets and scaling it down for emerging markets.

That was then; this is now, and the future.

Harman’s big bet

Eight years ago, Harman made a gamble on the way it approached automotive infotainment system development. The supplier had a reputation for premium, cutting edge infotainment technology, found in luxury brands such as Mercedes-Benz and BMW. “Back then, our car division was primarily supplying the premium segment, and that’s the segment for which our solutions catered. They were quite elaborate, to some degrees over-engineered, over spec’d,” said Harman’s Arvin Baalu, Vice President – Digital Cockpit Platforms. “Clearly our price competitiveness only allowed us to compete in the segment where cost was not a primary driver. For those brands it is more about features, technology, and the capability that we can bring with our platforms.”

What was missing was an opportunity with mainstream OEMs, where considerable growth potential was predicted. “We tried taking these high-end, high-priced premium solutions and stripping them down for mainstream OEMs, but it didn’t really work out,” Baalu told Megatrends. “This is where we made a big bet to rethink the way we do infotainment systems. We asked ourselves, ‘Can we rethink the hardware design? Can we rethink the systems design, the way we approach software, the way we develop the software? That was the genesis of creating the centre in India eight years ago.”

Today, all four of Harman’s business divisions are represented in India. Of the company’s global headcount of 29,000 employees, 8,000 are located in India alone. Many of these are working on various aspects of product development – including what’s known as ‘reverse innovation’.

“Reverse innovation is where you more or less design a product from the ground up in an emerging market and it finds global acceptance,” explained Baalu. “Fortunately for Harman, that platform has served us quite well. It has since gained acceptance at some of our big OEM customers in North America as well as Europe.”

Reverse innovation is where you more or less design a product from the ground up in an emerging market and it finds global acceptance. Fortunately for Harman, that platform has served us quite well. It has since gained acceptance at some of our big OEM customers in North America as well as Europe.

Baalu describes the success of the strategy as “pretty phenomenal” and adds that it “continues to provide a steady pipeline for us… We continue to invest in next-generation platform development catering to our global customers and vehicle segments.”

Get the baseline right

However, there have been changes along the way. “What we did eight years back clearly doesn’t hold good today because the technology has evolved so much,” he added. “At the same time, the processes, the governance, the principles remain. That means looking at the market, being very disciplined in the way we spec out the platform, making sure we are competitive globally and not just in a region. Harman’s platform strategy has allowed us to broaden our product portfolio and our customer base.  ”

The first step is to get the baseline requirements right for the specific market. Car drivers in India have similar needs to car drivers in Europe. Maybe there are some subtle differences but in the end the driver wants an infotainment system that is secure, and provides for a compelling user experience that is easy to use and intuitive. When we look at platform creation we look to set out these baseline requirements.”

After that, the focus shifts to honing the details. For a navigation system, luxury models traditionally embed this functionality.

For emerging market customers, the solution could instead harness smartphone capabilities. Hence the arrival of the Harman SmartAppsLink, which allows the navigation app on the phone to communicate with the head unit, and then project the map information. Tata Motors was one of the first to debut the system in India. The platform solution has also integrated projection mode technologies from Baidu, Google  and Apple.

Similar approaches were adopted for various other systems. What Harman can do is systematically offer the end customer the most relevant features at a price point that is acceptable for that market, simply by being smarter in the way it deploys the technology.

“A simple example is the CD mechanism where we were able to convince our customers to drop the CD player. The media consumption pattern didn’t warrant the US$10 or US$15 cost to integrate it. In its place, we focused on supporting streaming music protocols,” he said.

Platforms, platforms, platforms

Today, Harman has several different platform initiatives within the connected car space. Within infotainment, it has a premium platform as well as an entry level platform. In the telematics space, it is looking to harness over-the-air (OTA) technology to branch out into update gateway solutions. “We are looking at a box that can securely and safely update every electronic unit within the car so that you save the OEMs and the customers the cost of updates in the field.  With our recent acquisitions, we are able to deliver the complete value chain,” Baalu explained.

The value proposition we can offer to the OEMs and the end-customers is integrating all of these domains onto one single ECU to present a compelling and harmonious user experience. We believe this platform will be quite disruptive in the market. We intend to play a major role in driving next-generation cockpit controller solutions.

He is also heading up a new platform initiative called Digital Cockpits, which focuses on the next generation cockpit experience. Engineers are examining various types of user experiences as well as the kind of electronics behind that experience. “We are not satisfied with just controlling the centre stack display. We are getting into the cluster space, into the other areas within the cockpit that are going digital,” he said. “The value proposition we can offer to the OEMs and the end-customers is integrating all of these domains onto one single ECU to present a compelling and harmonious user experience. We believe this platform will be quite disruptive in the market. We intend to play a major role in driving next generation cockpit controller solutions.”

In all that it does, Harman engineers are always looking at how to differentiate between a high, premium and entry offering, and at how to maintain discipline accordingly. “We have to stay very disciplined within our requirements for the platform. We solicit input from the market. For example, we will establish that a display audio platform must adhere to a certain price point and must offer a certain set of features,” said Baalu. “For premium systems it will have more features, more CPU, it will integrate some features within the head unit.”

With the underlying software, the aim is to avoid unnecessary development work. “We don’t want to create a unique software for each of our platforms. We try to architect it by using software product lines,” he explained.

For instance, 40% of the software used on a display-level audio can be carried forward to a premium. These commonalities could include aspects such as the operating system, the middleware technology, the drivers and the infrastructure parts. The variability comes in with the user experience. “We try to apply software product line principles to create a set of core software assets and be smart in the way we handle variability,” he noted.

Overall, Harman is keen to develop multi-use platforms that can then be customised. The result is a shorter time to market, higher quality and lower cost.

“For us, it’s all about platforms. That’s something in which we take considerable pride now,” Baalu emphasised. “We are not really looking at each opportunity as a ground-up development. We are investing in developing production-grade platform solutions that we can then easily customise and offer as a product to the customer. This philosophy cuts across everything that we do within Connected Car. It’s all about platforms, platforms, platforms!”

 

This article appeared in the Q4 2016 issue of Automotive Megatrends Magazine. Follow this link to download the full issue.