Editors Note: This article formed the basis of an interview with Forbes magazine, you can read the article here on Forbes.com.
Dropping the Bomb on Infotainment
Throughout the automotive industry, 2018 was a year of consolidation, assessment, and the taking of proactive steps to keep ahead of the big changes that are sweeping through the industry. This is especially true for those in the infotainment and navigation sectors.
In 2018 we have seen Google take a big step into the sector with its partnership with the Renault-Nissan-Mitsubishi alliance. The alliance will be putting the Android operating system to work in their next-gen infotainment systems in their high-end vehicles.
This has rocked the industry, and many suppliers feel that Google’s entry into the market place represents the beginning of the end for the infotainment sector. However, we see things differently. Google’s solution relies on consistent connectivity and we see hybrid solutions – those which provide both online and offline functionality – as still being the best option whilst 5G is still in its infancy.
The War for the Platform
Competition in the infotainment market place will be a war for the platform. The ecosystems these platforms supply will represent hundreds of millions of dollars in revenue, not just in apps and services, but also in data and analytics. As one of the world’s premier data brokers, it makes sense that Google would look to move into this space, but I think they underestimate the risk-averse nature of the automotive industry.
Automakers have traditionally been very defensive when it comes to their data. Proprietary systems are rife, and I think it is likely that many OEMs will remain resistant to handing over control of their vehicles and branding to 3rd parties. Branding and customization are key areas of concern for OEMs.
To reduce cost and increase efficiency your average brands might only differ in build and specification by a matter of inches, and it this space that the OEM lives in. They must find a marketable difference in this space and they guard it carefully. As a result – and considering how infotainment is becoming one of the key differentiation points – we have seen, and expect to see, a significant increase in demand for white-label solutions and integration expertise as the industry evolves.
Anticipating the Changing Terrain
NNG has built its business around its understanding of automotive navigation. We have seen it evolve from a product in the form of PNDs (portable navigation devices) to a service within infotainment platforms. This trend saw a lot of suppliers, including NNG, move their focus from navigation to infotainment.
Now with the rapid rise of connectivity, electric and automated vehicles, it’s important to again reassess. We will see many companies pivot from infotainment to location-based services. To some, this might seem like semantics, but I think it represents a fundamental shift in perspective.
Years of experience in automotive navigation and infotainment, along with the hard skills and expertise that come with it, allow you to spot opportunities in the changing landscape: To develop solutions that are relevant across future autonomous, connected, electric and shared vehicles. With that in mind here are the trends that we see as having the largest impact on location-based services in 2019:
Many OEMs have ramped up their spending in this area. Last year BMW alone raised its R&D spending in electric and autonomous vehicles to around 7 billion euros (approx. 8 billion USD). However, even with declining costs for the necessary electronics, it is unlikely we will see high-level autonomous vehicles enter the mainstream.
These vehicles are more likely to remain geo-fenced with MaaS (mobility as a service) providers offering tailored services. This is due to legal framework restrictions and the need for more time in private service to fine-tune the vehicles and their learning algorithms.
In the meantime, we expect to see improvements in advanced driver assistance systems (ADAS) and see these becoming more widespread across market segments. Driver distraction is still of key concern, especially as there is still a lot of indecision about what the inside of the vehicle should look like. Yes, there’s a push to big screens, but what that visual real estate is to be used for is still under discussion.
ADAS solutions will be of vital importance to help reduce the impact of driver distraction as connected and automated vehicles become more common. Location-based solutions such as HD-mapping, off-road navigation solutions, ADASIS eHorizon, and map streaming services will support these technologies, which will, in turn, serve to prepare vehicles, and their drivers, for future autonomy.
We expect to see integrated connectivity spreading to mid-range from high-end vehicles. Initially, 5G modems are likely to find applications in high-end vehicles. This is most likely to be in telematics for predictive maintenance, as well as in infotainment, providing opportunities for HD streaming and other services.
There is the chance we might see development in applications for V2X (vehicle-to-everything) take off, especially as now it appears that DSRC (dedicated short-range communication) V2X solutions are now dead in the water. The indecision amongst OEMs whether to pursue DSRC or C-V2X (cellular, based on 4G LTE or 5G), seems to have been put to rest by recent advance is C-V2X technologies.
We foresee, that with the ability to stream more data and remain connected in the vehicle, the rise of companion applications for personalization will become much more important. These are the kinds of areas that consumers expect to see improvement in, especially with the increase in the adoption of home assistants.
Almost every brand will have at least one EV model within the next year and a half. Location-based features are key to managing charging and avoiding range anxiety and we expect to see a number of innovations in this area.
It is also likely we will see large charging infrastructure deployment globally. This will raise the value of centralized authentication and payment services. Something infotainment players are keen to get involved in.
UX Design is essential to the future of the industry, both in differentiating different brands, but also in providing intuitive experience in connected and autonomous vehicles. As OEMs react to this fact we expect to see many innovations including the first HUD augmented reality systems appearing in high-end production vehicles.
In addition to this, and as an ongoing trend, we expect to see the consolidation of the head unit display and the cluster unit. Traditionally these two areas are developed individually which can lead to disjointed user experiences, even in some high-end cars. With the consolidation of these areas, you can expect to see new tools and more intuitive UX solutions hit the market.
Finally, probably the most interesting area to watch is the integration of natural voice assistants. Many OEMs are looking to bring these solutions into their vehicles and they want to find ways to integrate voice into their service ecosystems. In fact, at CES, with just a quick walk around the north hall, it was difficult to spot a vehicle without a sticker on it declaring Alexa and Google Assistant support. Although the integration level of these assistants was still low and in its early stages, expect variants to become available in mid-range vehicles this year.
Autonomous, connected, electric vehicles are the future of the industry, and it is no surprise that this trend will continue into 2019. But it is important that we take a moment to consider what these solutions are for.
In the rush to prove the technology it can be easy to forget what the car is really about: The experience. In 2019 it will be vital to revisit what user experience means in the car. How will people interact with the new technologies and solutions that arise? What can we do to overcome driver distraction? How will we make the vehicle environment a fit for the accelerating changes in our lifestyles? It’s an exciting time.