Building connected cars is no longer just an option for vehicle manufacturers, but with increasing technological demands from their consumers, it is difficult for OEMs to know which telematics solutions to adopt for their next generation platforms.
Although advantages of both built-in and brought-in systems are vast, there are some key disadvantages for OEMs to bear in mind as they battle to keep their vehicles up to date, maximise sales and minimise the risk of their brand becoming irrelevant.
The debate as it stands
Investment bank RBC Capital Markets believes connected vehicles will grow at a 25%+ CAGR through the end of the decade, by which time more than 75% of vehicles produced will have some level of connectivity to the Internet. But what form that integration will take is a source of great debate, essentially boiling down to embedded versus portable connectivity.
The main advantage of built-in systems is that they do not rely on external devices, eliminating compatibility or interoperability issues that can often be problematic when bringing devices into the car. This therefore allows greater flexibility for the OEM’s business model, providing strong connections to services demanded by consumers, such as navigation and on-board infotainment. The built-in system also provides the OEM with control over what content to provide to the driver, unlike brought-in systems where inevitably, the driver decides what they want to do and when.
Chris Schreiner, Director for the Automotive Consumer Insights service at Strategy Analytics, told Megatrends that “From a user experience perspective, the built-in and beamed-in options are best,” noting that with embedded solutions, each app or feature has been designed for the system, and is therefore well integrated, seamless and easy to use, and consumers have no issue with knowing what does and does not work. “The research we did on the Tesla Model S showed how easy a well designed embedded solution can be,” Schreiner continued. “All participants, young and old, tech savvy and not, were able to do everything easily, and scored highest on our usability ratings.”
Mark Rose is Head of Automotive M2M at Vodafone. Over the last few years, Vodafone has launched many M2M collaborations and strategies in an attempt to drive its automotive M2M business. Megatrends spoke to Rose, who described embedded connectivity as a key area for the communications provider. He said, “Our key area is looking at connecting cars through embedded connectivity within the car, and I think on the back of the eCall regulations and the way the whole industry is moving that we’ll see, over the next four or five years, probably upwards of 50% – 60% of cars using embedded systems.”
Embedded, or built-in systems do not provide all the answers, however, and a main consideration for OEMs using built-in devices is the high system costs involved, and of course the main risk of the embedded modem becoming obsolete. Allowing consumers to integrate their own usually current mobile devices overcomes the problems of long vehicle development cycles, allowing for the software to be easily adapted to customer preference.
Of course, there are ways around the risk of ageing embedded devices, and Tesla has shown the way forward for OEMs with its over the air software updates to quickly sort out the problems that often arise when bringing a new car to market, as well as update the software further down the line, similar to the capabilities of a smartphone.
New standards, new demands
Julie Mossler, Head of Global Communications & Creative Strategy at community smartphone navigation app, Waze, told Megatrends, “I think car manufacturers have no choice but to innovate. So, as it is today with the average vehicle, you can buy it new from the dealer, and the minute you drive it off the lot it’s not relevant any more, at least from the console and the user entertainment experience. So you’re seeing a trend in more customisable technology that doesn’t require you to buy a new vehicle.”
By 2016, most cars will have smartphone integration, according to a report from Juniper Research, entitled ‘Infotainment & Commercial Uses, Insurance & Vehicle Recovery 2012-2016.’ As a result, a new class of brought-in solutions is emerging, where the lion’s share of the application processing is done on the phone. For this, cloud connectivity comes via the 3G network and the phone and head unit communicate via Bluetooth, and consumers can tether their existing smartphone to the car via Bluetooth or USB cable, enabling full access to their personal contacts and playlists.
However, this is not to say that brought-in connectivity comes without its own downfalls, as this form of connectivity is reliant on the quality and performance of the mobile device, which may not always be adequate for enabling certain technologies, better handled by a car’s embedded device.
Eyes on the road
The increasing complexity of in-car infotainment systems of course runs a risk of driver distraction; controlling how much information drivers have access to while operating the vehicle becomes more difficult when smartphone integration is involved, as the OEM is less able to control the apps to which the driver has access.
Waze can be downloaded with Android, Apple or Windows to allow drivers to share real-time traffic and road information. Having a navigation app on a smartphone for use in a car rather than integrated in a dashboard may sound like an accident waiting to happen, but Waze’s Mossler said, “The greatest benefit is providing turn by turn navigation and direction. These are audio directions – you don’t have to look at your phone.”
Making sure that having a brought-in device, such as a mobile phone in a car isn’t going to contribute rather than decrease driver distraction is a huge consideration for mobile apps, and Mossler said, “All of the features that we add to the app have to pass the safe driving test. As a global driving society, GPS is largely excessive in the car, so much like a GPS, we recommend that docking your phone in a proper car dock and plugging it into a power outlet is going to give you the best results. With the normal GPS, you don’t encourage users to look at the screen. There is very minimal engagement with the screen, and we also were the first company to prohibit texting within the app while driving. So, if we can tell that your car is moving, we will pop up a blocker that requires you to call yourself a passenger before you’re able to type in any addresses or change anything on the map.”
The hybrid approach
Despite the ongoing built-in versus brought-in debate in the industry, OEMs are not necessarily wedded to one telematics solution, suggesting that there may in fact be very little to debate about. An example of this comes from GM, which offers the embedded OnStar solution, while also offering a tethered MyLink solution.
Despite Vodafone’s current focus on embedded solutions for the connected car, Rose was keen to point out the importance of acknowledging that any OEM will have a dual strategy of both embedded and tethered, and said “I think it is important for OEMs to adopt a joint approach and at Vodafone, we ensure that what we do with our phones works well with cars and anything we can do in that space, we do. The primary focus is on getting the connectivity actually embedded within the car, and I think there is ultimately more that you can do once you have that capability and it drives an enhanced experience for the end customer.”
Director of Automotive at NVIDIA, Danny Shapiro, also spoke to Megatrends regarding the telematics debate, stating that the implementation of such technology in the connected car is in fact going to be a mixture of all methods. Shapiro said, “I think we’re going to see hybrid offering the best experience. We’re not expecting people to get rid of their mobile devices, but I think what you’ll see is OEMs as well as the major OS companies trying to come up with better and safer integration.”
Ford has also demonstrated the importance of a multi-tiered approach to the connected car. Julius Marchwicki, SYNC Product Manager, told Megatrends that the built-in, brought-in and beamed-in connected strategies are a vital part of keeping cars up to date, and fulfilling consumers’ connected requirements. Marchwicki said, “Different connectivity approaches are not an ‘and/or’ thing, and we’re probably always going to deliver infotainment or information through a brought-in device, but for certain types of functions we’ll use more of an embedded or built-in type of strategy to deliver those features to our customers.”
The future debate
It seems as though the built-in versus brought-in debate will continue for some time to come, and as OEMs partner with consumer electronics suppliers more frequently, split decisions between built-in and brought-in will continue to arise. Ultimately, although the OEMs are the ones making the cars, the choice will be down to the consumer, and what they are willing to accept to make the car an extension of their increasingly connected world.