Precksha Saksena-Sood looks at what happens to product differentiation once OEMs begin to let go of their proprietary platforms and start going the way of smartphones.
It’s one of the biggest pickles in mobile telecommunications.
A device manufacturer’s proprietary platform gives a product a distinct feel, but only at the cost of forcing app developers to wrestle with a dizzying number of platform-specific modules and, in turn, a higher price for the consumer.
In mobile, this problem has been all but solved. Apple and Blackberry have their own branded platforms, and everyone else – for the most part – uses Android, with a smattering of Windows Mobile.
But what is now taken for granted by phone designers, is only beginning to be realized by vehicle OEMs.
“Right now, if you’re an app developer, you’re doing one app for GM and another for Ford,” says T.C. Wingrove, senior manager of global electronics innovation at Visteon. “And even within GM, you’re doing one for Chevrolet and another for Cadillac.”
As of this year, Linux-based platforms – the closest the automotive industry comes to having a unified platform – only accounted for roughly 2% of the market, according to IHS. That’s expected to grow to about 30% in 2018, by which time proprietary systems begin to fade into the background – or so it is hoped.
So if OEMs give up the keys to their platforms, how will they distinguish the in-vehicle infotainment of their products?
(For more on unified platforms, see Q&A: Potential and pitfalls of open source in automotive, Telematics and operating systems: The 'open' versus 'closed' debate, part I and Telematics and operating systems: The 'open' versus 'closed' debate, part II.)
Differentiating the product
“There’s not a single correct answer,” Wingrove says. And the problem is that so few automakers have adopted a uniform platform that, at this point, there is little more then conjecture.
Still, a consensus is beginning to emerge that innovation needs to pick up and that the best way to realize that is by standardizing some of the many components at the base of car makers’ elaborate infotainment systems. “The ones who will innovate the best will be the ones who can collaborate the best,” Wingrove says.
In other words, companies that can bring together the players in an increasingly complex supply chain and sacrifice their proprietary platforms in order to further actual innovation, instead of furthering mere branding illusions, will come out ahead.
In mobile, this has resulted in products that in many ways resemble their competitors. Still, the different brands manage to distinguish themselves. “Just like in the phone OS, where they make 80% to 90% of the platform identical and then the top 10% is the special stuff on their phones only, they could do that with the HMIs,” says Mark Boyadjis, senior analyst, IHS Automotive.
Still, not everyone agrees.
“The current automobile market has become too competitive with very few well-delineated areas of product differentiation,”says Frank Hirschenberger, senior director of product innovation at Agero. “Connected vehicles are viewed as one of the primary areas where OEMs can still substantially differentiate their product and also provide services for the life cycle of the vehicle. The acceptance of open source is typically reserved for non-differentiating functions, as opposed to differentiating features.”
HMI, services and performance
Boyadjis expects innovation to come in three areas: human-machine interface (HMI), services and performance of the actual product.
“Be it a Samsung, HTC, LG, Huawei or other brand of smartphone, they will all have Android, but have very different implementations at play,” he says. “These differences are the icing on the cake, which help sales of one phone separate from another. This would also happen in vehicles if a common platform emerged.”
For example, a proprietary voice recognition system similar to Samsung’s S Voice or vehicle-specific social linking tools like those found in some of HTC’s phones serve to differentiate phones that both operate in the familiar Android platform. And similar differentiators might be seen in cars.
“Innovation will come from the features, services, performances at the application level,” says Phillipe Gicquel, president of GENIVI, one of the industry’s biggest proponents of Linux-based systems. “Using GENIVI standards changes the supplier ecosystem because OEMs can more easily make their own choices for each software module, like navigation engine, voice recognition and so on.”
One of the biggest differentiators will be the services themselves, according to experts, and this is where the phone analogy begins to falter. Unlike phones, in which apps are universally available across all supported devices, there would still be a variety of different apps available for different vehicles.
“While a common app store is shared within all Android phones, this would be different in the vehicle,” Boyadjis says. “Many apps and services would be shared, but because some of them will be vehicle-centric applications, reading data from sensors and other connectivity platforms in the car, the total services and applications offered will be a point of differentiation for OEMs."
Then, of course, there’s the basic performance of the product itself – the parts and processes involved in making the HMI, apps and everything in between run at an optimum level. “Different processors, memory and other hardware-based solutions will differentiate across vehicle brands,” Boyadjis says. “The problem with this differentiation is it’s easy to replicate, and thus is no longer a differentiation.”
There’s another way to look at it, though, which is that the difference in performance will itself take the forefront in differentiation. Samsung may have used the branded S Voice feature, but it was the sheer firepower under the hood that made the Galaxy series a runaway success.
A similar process of differentiation might be seen in vehicles. In this case, the leaders of innovation would become the chipmakers and engineers, not the OEMs.
(For more on HMI design, see The smartphone as a model for telematics HMIs, part I and The smartphone as a model for telematics HMIs, part II.)
Precksha Saksena-Sood is the managing director of TU.
For all the latest telematics trends, check out Telematics Munich 2013 on Nov. 11-12 in Munich, Germany, Telematics for Fleet Management USA 2013 on Nov. 20-21 in Atlanta, Georgia, Content and Apps for Automotive USA 2013 on Dec. 11-12 in San Francisco, Consumer Telematics Show 2014 on Jan. 6 in Las Vegas, Telematics for Fleet Management Europe 2014 on March 12-13 in Amsterdam, The Netherlands, and Content and Apps for Automotive Europe 2014 on April 8-9 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.