Industry has a good line-of-sight on what connected car is today, which is centered on well-defined use cases like Vehicle Connectivity, Safety & Security, Infotainment Delivery, Electric Vehicle, and Fleet Management.The next phase will be what Airbiquity calls “Context Intelligent,” which is the delivery of driving centric services powered by analytics.
Scott Frank, Vice President-Marketing | Airbiquity
Telematics Wire got an opportunity to interview Scott Frank, VP-Marketing of Airbiquity, a Seattle-based intermediary software and cloud services provider for connected vehicle. Airbiquity is already powering over 6 million vehicles with its flagship Choreo connected car platform that largely includes eight leading automotive brands spanning 49 vehicle models. Recently, Airbiquity bagged the Best Telematics Service Provider award at TU-Automotive awards held at Detroit this year.
Do you think that the arrival of connected car has disrupted the traditional automotive value chain in a big way?
Absolutely. When technology enabled the connection of cars to the “off-board” world—and the 2-way transmission of data to power apps, content, and services—the traditional automotive ecosystem expanded to include new3rd party players like mobile network operators, call centers, and content and service providers. Along with this expansion came the need for automakers to outsource solution development to telematics service providers (like Airbiquity)to engineer and integrate the necessary hardware and software into vehicle systems and establish connections with the extended ecosystem. Compounding matters is the need for automaker IT, manufacturing, finance, and procurement organizations to learn how to work effectively with the new ecosystem on vehicle design and production processes to integrate connected car program software into the broader vehicle platform such as testing/QA, line-fit installation, and purchasing vehicle components that are not traditional car “parts.” It all adds up to an enormous amount of new activity and skills sets that need to be managed and developed for a part of the vehicle that used to be relatively contained and hardware focused: The “radio” with AM/FM and CD player.Going forward it’s going to get even more complex as the industry moves from the current phase of connected car—basic vehicle connectivity and service delivery—to future phases like V2X and autonomous vehicles without user controls like steering wheels, brakes, and gas pedals.
What will be the next-phase of maturity in connected cars?
The industry has a good line-of-sight on what connected car is today, which is centered on well-defined use cases like Vehicle Connectivity, Safety & Security, Infotainment Delivery, Electric Vehicle, and Fleet Management.The next phase will be what Airbiquity calls “Context Intelligent,” which is the delivery of driving centric services powered by analytics using multiple data sets like vehicle diagnostics, driving behavior, location information, and content and services from the cloud. Connected car service delivery platforms (like Airbiquity’s Choreo) will pull “on-board” vehicle data into the cloud where massive amounts of storage and processing power will aggregate it with “off-board” data and conduct sophisticated analytics. The outcome will be sent back to the vehicle in the form of actionable information that enhances the driver’s daily journey and vehicle ownership experience.Context Intelligent information will be highly relevant, timely, predictive – and very different from Infotainment Delivery which is app centric and not always directly relevant to driving and owning a vehicle.
What are the various connected vehicle services that are gaining traction among consumers?
The most widely adopted use cases are Vehicle Connectivity, Safety & Security, and Infotainment Delivery. However, only a low double-digit percentage of consumers owning connected cars have activated their systems and actively use them. This low activation rate is an industry-wide concern and due to a number of factors, the primary ones being 1) low consumer awareness of what the systems do and the value they provide, and 2) poor user interface and user experience design making them difficult to use. Based on recent consumer usability research from SBD, Strategy Analytics, and other research firms the best-designed system enables only 50% of consumers to successfully complete one or more basic tasks without seeking assistance. So clearly the connected car industry has a long way to go to make these systems more usable and fully realize the business benefits of customer satisfaction, loyalty, and incremental revenue.
Starting from GM’s deployment of data over voice to developing an intermediary software platform between the cloud and car used by a handful of car makers; how has the demands of OEMs evolved for Airbiquity, and in general?
Automaker demands can best be illustrated by the expansion of program use cases and related features. Initially there was Safety & Security providing vehicle connectivity and services automatic crash notification, roadside assistance, concierge, and remote features like door lock/unlock. Next came Infotainment Delivery with the integration of early mobile handsets using tethering. This was followed by the integration of more capable smartphones and the extension of apps and content from the mobile handset ecosystem into the vehicle. Simultaneously Fleet Management spooled up for commercial vehicles and now we’re rapidly increasing interest in the aforementioned Context Intelligent use case.
What is the general consensus of automotive telematics (including the consumers) fraternity about the data privacy issues? Optimistic, Pessimistic OR Cautiously optimistic?
To be honest it’s a mixed bag at the moment. A subset of consumers will fall into the pessimistic camp due to “big brother” concerns regarding data and privacy. Consumers in the optimist camp will be early adopters with existing “digital lifestyle” orientations and a familiarity and comfort with sharing utilization data and personal information based on their prior online and smartphone experiences. The balance of consumer will be in the middle and cautiously optimistic. Consumers with privacy concerns will need to hear assurances from automakers that connected car programs are safe from a data privacy perspective – as be informed about how automakers and 3rd parties will use their usage data and personal information. Industry wide awareness and standards efforts will play a key role, such as the Alliance of Automobile Manufacturers and Association of Global Automakers recent collaboration on data privacy principles for connected car technologies and services.
Besides the external challenges, what do you think are some of the ‘organizational’ impediments that OEMs face when development and deployment connected car services?
I mentioned several organizational impediments in the answer to Question #1. Expanding on that, there are two others which add incremental expense and delays to program deployments: Lack of clearly defined program strategies and goals with appropriately sized investments, and highly distributed accountability and decision making hampering internal and external parties ability to work effectively and efficiently. Airbiquity produced a webinar on this topic in Q115 featuring newly released SBD Research. You can check out it out at:http://www.airbiquity.com/news/webinars/webinar-series-part-one/.
It seems, amongst the 5 million Airbiquity-powered vehicles, that most of them belong to the luxury segment. When could we see mainstream adoption of ‘connected’ services in entry and mid-level cars?
Airbiquity’s Choreo platform recently surpassed 6 million vehicle subscriptions and supports 12 connected car programs across 8 automotive brands. The 6 million vehicles are comprised of 49 individual models – and a minority of them are in the luxury segment. So we’re actually not seeing the luxury segment skew you suggest for our program deployments. However, looking at the automotive industry as a whole, there was definitely a luxury segment skew for initial deployments of programs featuring premium services like satellite radio, emergency assistance, and concierge. But that skew has been countered by the rapid introduction of mainstream vehicles with basic Safety & Security features (like door lock/unlock, remote start, etc.) and smartphone based infotainment delivery. This trend will only continue as technology improves, prices decline, and connected car awareness and adoption moves from the early adoption to mainstream phase.
How do you see the future of connected cars shaping up in emerging markets (MEA, LATAM, ANZ, APAC)? Tell us something about your recent venture into the APAC market.
Emerging markets definitely represent a volume opportunity for connected car program deployments. But the program strategies, technology, and solutions will need to be “right sized” to the price sensitivity of emerging market consumers – which is typically lower out-of-pocket vehicle cost relative to more developed markets. For example, programs leveraging tethered smartphones to enable basic free services like hands free calling, texting, and streaming music will garner more vehicle production volume share due to automaker cost/price management. Right sized programs will also achieve higher consumer adoption versus programs with more expensive technology like touch screen head units, Bluetooth connectivity, and premium services. As far as APAC goes Airbiquity provides connected car service delivery in five countries, including China which has become the largest and fastest growing automotive market in the world: Australia, New Zealand, Korea, Japan, and China.We expect to see continued platform subscription growth in the APAC region, as well as the non-APAC BRIC countries.
Where does Airbiquity stand on the road to ‘autonomy’ of vehicles?
Airbiquity is not working on autonomous programs as defined by vehicles without traditional user controls such assteering wheels, brakes, or gas pedals.We are fully focused on customer program deployments for well-defined use cases (Vehicle Connectivity, Safety & Security, Infotainment Delivery, Electric Vehicle, and Fleet Management) and product development for the new “in close” Context Intelligent use case highlighted in Question #2.
How sustainable do you think are the new business models of connected vehicles like car-sharing/smart mobility?
Very sustainable once they come to market and achieve consumer adoption. It’s well documented that next generation consumers are increasingly less enamored with the concept of vehicle ownership and the costs that come along with it like insurance, parking, and maintenance. This trend is more pronounced in urban areas where the loss of productive time due to traffic congestion is increasing, and there are high incidents of vehicle crime like break-ins and theft. Car sharing and autonomous vehicle business models that will provide on-demand, pay for what you use transportation, will be definitely be increasingly attractive to like minded consumers going forward. The good news is these business models will rely on connected car technology and services, which bodes well for the continued growth and prosperity of the entire industry.