In the third of a three-part series, Susan Kuchinskas looks at the evolving paradigm for delivering apps to the connected car.
Betting across the board
While many automakers are placing their bets on one app delivery model or another, tier 1s and vendors are hedging theirs.
Continental recently announced a new, GENIVI-based infotainment platform that will support all three approaches (smartphone, OEM-run and hybrid), plus HTML5.
It uses MirrorLink technology to integrate mobile devices while connecting to Cloud-based apps and services through an embedded LTE modem. It also blocks phone-based apps or games from running while the car is moving.
Continental hasn't disclosed any customers for the new platform, but Lars Schultheiss, vice president of product management and sales in Continental's infotainment and connectivity business unit, says it already has one customer project running, and this will use the dedicated app store model.
In general, Schultheiss sees OEMs selecting either the dedicated app store or the smartphone approach, with it breaking down according to market position. "At least for the moment, the premium car manufacturers want to have much more control over how things look, how they are blended into the overall HMI, whereas the lower-priced cars are taking the other approach," he says.
Continental's support of HTML5 is noteworthy. The promise is that applications, services and websites can all be created once to run on any device with a supporting browser, including the automotive interface.
One of the roadblocks has been the relatively slow loading and rendering time of HTML5 pages. But Schultheiss points out that LTE coverage has become better in the United States, and Europe should have good coverage by the end of this year.
The role of iTunes App Store and Google Play
Apple and Google play a major role in the distribution of automotive apps. Their sophisticated app stores handle all of the back-office functions, things that most automakers simply do not have the capacity to do, according to Arturo Pereyra, senior director, marketing and business development, Oracle.
While OnStar and SiriusXM have created successful business models for sales and delivery over IP networks, he says, most OEMs' "business models, people, processes and technology are optimized around a model that in 90% of cases ends when the car is taken off the lot.”
“They would need different capabilities than they have today," he says. As a result, it could take years until OEMs have what it takes to grab a big piece of what Machina Research estimates will be a $422 billion digital marketplace inside the car by 2022.
Still, automakers should strive to create their own app stores for a couple of reasons, according to Pereyra.
"One, they need to be in the best position possible to own the customer over the lifetime ownership of the auto,” he says. “If you take a backseat approach, you could have Apple or Google own the relationship over that lifetime."
The second reason is the potential revenue from app sales. "If you look at the margins in the app space, they are in the double digits, up to 50% in the best cases,” Pereyra says. On the other hand, he notes, margins for the sale of actual vehicles are in the single digits.
In the meantime, Apple and Google continue to push their technology into cars. At the beginning of 2014, Google made a joint announcement of the Open Automotive Alliance (OAA) with four car companies and chipmaker Nvidia.
But Anna Buettner of IHS Automotive doesn't think the OAA means that Google will create its own full-blown infotainment operating system. "Google just has to stay with the times and make sure that Google users also know that, at some point, they will be able to integrate the content into the vehicle," she says.
She thinks this will be done in a MirrorLink way, rather than via an embedded OS.
Still, OEMs are facing some difficult choices. “They have to say they are willing to integrate Apple and Google content, but the danger is, you lose your identity,” Buettner says. “If I get in the car and just render what's on my phone, pretty soon I forget what car I'm driving."
Control of the HMI is another issue. While Google has been flexible about device interfaces, Apple controls the look and feel of its products with an iron hand. Whether Apple would be willing to let automakers determine the user interface for Apple apps in the car is still to be determined.
And then, there are safety issues. Says Ty Roberts, co-founder and CTO of Gracenote: "The iOS is quite reliable and moving further up the stack in the car. But you do reboot your phone sometimes, so it's not completely reliable. Reliability, threats, safety and security are issues that have to be worked out. Can those guys get there? Maybe."
But perhaps Apple and Google will be willing to cede some control in the car in order to get more eyeballs.
"Apple is interested in selling devices, content and user experience,” says Andy Gryc, automotive product marketing manager for QNX. “To the extent that they can do that without becoming a tier 1, they will do that. Google basically has a similar set of requirements: get more eyeballs on their served content. They have a lot of ways to do that, and all of them could be done with a good integration between car and phone."
Susan Kuchinskas is a regular contributor to TU.
For all the latest telematics trends, check out Telematics for Fleet Management Europe 2014 on March 12-13 in Amsterdam, The Netherlands, Content and Apps for Automotive Europe 2014 on April 8-9 in Munich, Germany, Insurance Telematics Europe 2014 on May 6-7 in London, Telematics India and South Asia 2014 on May 28-29 in Bangalore, India, Insurance Telematics Canada 2014 on May 28-29 in Toronto, Telematics Detroit 2014 on June 4-5 in Novi, Michigan, Advanced Automotive Safety USA 2014 on July 8-9 in Novi, Michigan, and Telematics Munich 2014 on Nov. 10-11 in Munich, Germany.
For exclusive telematics business analysis and insight, check out TU’s reports: Telematics Connectivity Strategies Report 2013, The Automotive HMI Report 2013, Insurance Telematics Report 2013 and Fleet & Asset Management Report 2012.