Several years ago, when speaking at a TU-Automotive conference, Andrew Poliak, Global Director Business Development(Automotive) of QNX Software Systems predicted that software would become more and more important to the automotive industry. There are tens of millions of lines of code in a car today, and a typical infotainment system comprises nearly 50 million lines. Moreover, software has become an important differentiator. Most Tier 1s still view themselves as hardware companies, but the successful ones will shift their focus, and their business, more towards software. This is where QNX Software Systems, as an operating system company, comes in to offer its expertise. There are many software companies, but very few OS companies.
Telematics Wire got a chance to interact with Andrew to discuss how QNX has been able to power more than 50M vehicles with its software and the roadmap ahead.
What connected car services are “beyond the hype” and influencing the purchase decision of a new vehicle buyer?
For years now, we have heard people say, “Just drop my smartphone in a dashboard.” Apple CarPlay and Android Auto are beyond the hype because people don’t want to pay for an additional data connection, and business models haven’t made it easy for car companies to connect their vehicles directly to wireless networks. But are CarPlay and Android Auto a big influence on purchasing decisions? That’s unclear. Over time, I believe the hype will be all about making the car a component of your digital, connected, life, but the experience can be brought in or delivered through a built-in connection.
Also, safety and advanced driver assistance systems (ADAS) features are giving people the ability to do more with infotainment during a long commute. We’re at a place where cars can pilot themselves in traffic and on the highway, and every year we’ll see more autonomous features.
How do you think would a consumer like to pay for connected car services in future?
- One-off payment at time of car purchase
- Basic services at no cost with the purchase of additional functionality (Freemium)
Consumers don’t want an extra bill to pay; they want the service included in what they are already paying for. That’s why Apple CarPlay and Android Auto are viewed positively; they offer a connected vehicle experience through existing smartphone data plans. Successful OEMs will find a way to allow for hardware and software upgrades in the cars people purchase, and this may create new opportunities for OEMs and carriers to make money. For example, OEMs may offer free connectivity for software updates and security, but charge for wireless hotspots and streaming internet radio. They could even provide customers built-in ways to shop and search, as a means of monetizing activities that people already do, but that, until now, couldn’t do in their car.
Who do you think will have the ultimate ownership of connected car data? OEMs, 3rd parties or consumers?
Increasingly, consumers will opt in to share connected car data with suppliers in exchange for free connectivity services. If the government blocks this approach, it will change who pays for services and how services are sold and purchased.
I think there will be more one-off payments for connected services at the time of vehicle purchase. Single SIM and split-billing, where the OEM pays for OTA car updates and the consumer pays for streaming of apps like Spotify and Pandora, will also grow. OEMs could absorb the cost of everything the way Tesla does, but many more will divide the cost burden with the consumers who want value-added services.
It seems the automotive dealerships are always missing from the connected car equation. How they are going to be benefitted by connectivity and telematics?
Many OEMs have great relationships with their dealers and want to continue to bring them value, so registrations, services, and oil changes will still tie customers to their local dealers. For example, an OEM could allow dealers to customize dashboards according to driver preferences —a driver who uses only three apps can have a dash that displays those three and hides the others. There will be risks to dealers as more updates are made over the air; nonetheless, dealers will continue to add value. We may see more of a Tesla dealership model, where two to three showroom cars are on site, and customers can customize their cars remotely. We will still need service centers, but a future trip to a dealership will be a different experience.
Since most of the OEMs are planning to roll out embedded telematics systems. Do you think that aftermarket industry will vanish in years to come?
The aftermarket industry won’t vanish any time soon. There are hundreds of millions of unconnected cars on the road, but relatively few aftermarket telematics products, so there is plenty of opportunity for aftermarket suppliers. There will still be some entry-level vehicles without connections in the next ten years, but we expect to see significant growth in connected cars by 2021.
The legislatures have raised concerns over remote hacking of vehicles and OEMs negligence towards this issue (consider the famous Ed Markey’s report). How big is this concern potentially?
From my experience, the automotive industry is treating security risks very carefully. QNX, for example, is working with another BlackBerry company, Certicom, to bring strong cryptography and entity authentication to in-vehicle software and electronic components. Together, we can provide a comprehensive framework for OEMs and Tier1s, with pre-integrations that simplify the manufacture of secure, connected vehicles. We also are working on security at every level — from boot security to encrypted storage to security in the communication from the cloud to the car.
Nowadays we see car makers connecting their in-vehicle systems with smart-watches, glasses. How do you see the intersection of car and wearables shaping up in days to come?
As wearables grow in popularity, we’ll start to see car makers do more with biometric information like heart rate and blood pressure. Integrated technologies will enable OEMs to adjust a vehicle’s behavior according to data from the driver’s wearable device. For example, a vehicle with autonomous capabilities could incorporate health monitoring for drivers prone to heart attack and pull over to the side of the road if the driver shows signs of cardiac arrest. OEMs may also take advantage of sensors in the car to customize and contextualize the driver experience. That said, just because we have a watch that can connect to a car to trigger an action doesn’t mean we should. Automakers must avoid gimmickry and proceed with caution as they integrate wearables into their vehicles.
What is the best way for car makers to future-proof their vehicles and keep their services up to date?
Car makers can future-proof their services by building a vehicle that supports remote updates, diagnostics, and servicing. For example, BlackBerry recently announced the BlackBerry IoT Platform, which provides an OTA update system designed to help automakers cut maintenance costs, reduce costly recalls, and keep vehicles up to date with new features. Automakers can also build a secure vehicle architecture that can be enhanced or updated with new hardware as well as new software. For instance, an OEM might offer software updates on a vehicle for five years, after which time a consumer can buy an upgraded hardware module to further expand the lifetime and functionality of their vehicle.
How sustainable do you think are new telematics-enabled business models like car-sharing, smart mobility etc?
OEMs are looking at fractional car ownership because younger drivers are less interested in owning a vehicle. Split ownership and car sharing are in OEMs’ plans, but, as vehicles become more autonomous, we will see a growing focus on transportation as a service. This will have a huge impact on the transportation industry, including long haul trucking, the taxi industry, and disruptive startups like Uber. This changeover will take time, but transportation will look very different ten years from now. Theoretically, in a world with fully autonomous vehicles, a car could become profitable by providing transportation services or even picking up groceries while its owner is at work.
Please see the Indian automotive telematics fraternity gathering @ Telematics India 2015