Consumers\' demand for more interactive services has increased the percentage of software used in cars. This presents an opportunity and a challenge to the automakers and their Tier 1 suppliers.
January 2008 is marked in the history of automotive industry, not for release of a new hybrid engine, crash avoidance system or other product innovation, but for the presence of an automotive manufacturer at CES, the world's premier consumer electronics tradeshow. Rick Wagner, the CEO of GM, told the CES crowd that "...if automobiles were invented today, I am pretty sure they would debut right here at CES... because more and more, that's exactly what today's cars and trucks are - highly sophisticated consumer electronics."
Given this statement, it's no surprise that developers of car infotainment and telematics systems face the same challenges as developers of other consumer devices. These challenges include shrinking development times, growing design complexity, and the need to accommodate modifications close to, or in some cases, after production. Case in point: When consumers buy a car today, they expect its infotainment system to work with the latest iPods, Bluetooth phones, or Internet services-even if the system was built before those devices or services appeared in the market. To satisfy these user expectations, many car stereos and infotainment systems must now support in-field upgrades.
To address these challenges, automakers and Tier 1 suppliers rely increasingly on software. In 2006, VDC senior analyst Matt Volckmann projected that "software alone will soon account for over 12 per cent of the value of a car." GM has long realised this fact. Back in 2004, Anthony Scott, the company's chief information technology officer, stated that many GM products "...have become reliant on software to the point that they could not be sold, used, or serviced without it." GM, isn't alone in its dependence on software; other automakers are also in the same boat.
The growing use of software in the vehicle interior can, in fact, be traced to several market requirements, including personalisation, brand differentiation, legislation and connectivity to off board devices and services. Each factor presents a challenge, as well as an opportunity, to automakers and their Tier 1 suppliers.
If the 1990s belonged to the "me" generation, the current decade belongs to the "my" generation. At every turn, consumers have the freedom to personalise their digital lifestyles, from customised faceplates for their Xboxes to personal web pages on My Space. In Europe, for example, sales of personalised ringtones are expected to hit US$ 1.1 billion in 2008. Capitalising on this trend, some car-infotainment systems already allow drivers to generate playlists of their favourite music and customise the in-dash display with personal photos. In short, automakers are using software to create the "My Car." The goal is to help consumers develop a more personal bond with their car and, not incidentally, the car's brand. In an industry where the volume of new cars sold per year is relatively flat, the ability to maintain loyalty of existing customers and to attract consumers from other brands is the key to success.
Citing safety concerns, many governments have passed laws that forbid the use of certain consumer electronic devices or services while driving. A case in point: In January 2008, Washington became the first US state to criminalise text messaging while driving. To automakers, this trend presents an opportunity. If they can somehow enable consumer electronics, content and services (often with location-aware features such as local traffic reports) to interact in a safe, reliable and legal way, then they can differentiate their brand and build greater customer loyalty. This is where software comes into play. Automakers are driving investments in software to enable safe, engaging and often multimodal interactions with mobile phones, portable navigation devices (PNDs), portable media players and so on. As connectivity to the vehicle becomes ubiquitous, off-board services and content are being specifically tailored for the challenging automotive environment (noise, distraction etc.), and are even being enhanced to form new automotive experiences for the consumer.
To address the challenges of personalisation and safe integration of consumer electronics, automakers are pursuing a range of strategies. At one end of the spectrum, some automakers are outsourcing software development to a vendor who specialises in consumer software technologies. At the other end, some automakers are building their own entire software stacks, all the way down to the underlying operating system-the "roll your own" approach. Ford is an example of first approach and Toyota, of the second.
Both these approaches have major implications for the automaker's business, as well for the entire supply chain, including traditional Tier 1 suppliers. With the first approach, the automaker can focus on its core competencies, while leveraging a vendor that has more experience in creating consumer-oriented software. The automaker may also benefit from the brand recognition and marketing know-how of the software vendor. But at the same time, the automaker must exercise firm control to ensure that the solution is of sufficient quality-a challenge if the vendor has little experience in addressing the reliability requirements of the automotive sector. Also, if the software vendor extends its offering to other car companies, the automaker loses its market differentiator.
This approach can also impact the Tier 1 supplier, who is now supplanted to some degree by the consumer software vendor. To counter this effect, Tier 1 suppliers must develop high levels of expertise in both software design and integration. In some infotainment systems, the software now comprises thousands of modules, creating an opportunity for any organisation capable of advanced software integration. The need to keep pace with consumer electronics and services will also grow unabated. The more the Tier 1 suppliers develop expertise in these roles, the more easily they can maintain their importance in the automotive supply chain.
Automakers who adopt the "roll your own" approach can also present challenges to the traditional Tier 1 supplier. In this approach, the automaker has chosen, with the possible help of third parties, to become a software company. The following are possible challenges for them. Can the automaker ship enough vehicles to sustain a thriving ecosystem around their infotainment operating system? Will there be enough cars using the automaker's proprietary platform to encourage third parties who specialise in speech technologies, multimedia and consumer-electronics integration to support the platfor m and to keep it at the forefront of innovation? Also, will the burden of constantly enhancing or growing this automotive software stack remain with the automaker or eventually fall to the automaker's Tier 1 supply chain? These questions may take a decade to be answered, but at the heart of this approach is the automaker's resistance to outsource a fundamental differentiator such as software.
Some automakers are taking a third, "middle ground" approach. They continue to source industry-standard, automotive-grade hardware and software components from their traditional Tier 1 supply channel. However, they also work with these suppliers to integrate consumer electronics, services and even automaker-specific technologies to create a unique brand value and intellectual property. This approach still impacts the supply chain. In particular, the Tier 1 supplier is expected to serve as a system integrator, built a base platform of hardware and software components and then work closely with the automaker to integrate the automaker's value-added intellectual property on top of these base platforms.
To address this challenge, some Tier 1 suppliers are building "open" software platforms that can accommodate a variety of requirements, without significant re-engineering. In most cases, these platforms combine a general-purpose 32-bit CPU with a standards-based realtime operating system (RTOS). The OS chosen typically provides virtual-mode architecture with support for memory protection, which enables greater fault resilience and software upgradeability. In some cases, the OS also offers time and space partitioning, which simplifies integration by providing a guaranteed budget of CPU time and memory for each software subsystem. For instance, the system designer can specify that the Human Machine Interface (HMI) always gets 10 per cent of CPU time, MP3 playback gets 20 per cent, navigation gets 30 per cent etc. This approach prevents task starvation problems, which often cause serious delays at the integration phrase.
Increasingly, car radios, infotainment systems and navigation units must interact with MP3 players, USB storage keys, DVD players, and digital media cards, not to mention future devices based on WiFi and Bluetooth data networking. To support this requirement, the OS must implement a modular and dynamic software architecture. For instance, a microkernel OS can mount and unmount file systems "on the fly" as consumer devices are plugged in or plugged out. The OS can also dynamically start and stop any hardware drivers that the devices may require. With this approach, an in-car system can support new media devices by simply downloading a small software "patch."
Coming back to General Motors, it is no accident that Rick Wagner spoke at CES. You can see that companies like GM are looking at the car interior much like consumer electronics manufacturers look at their products. And, like consumer device manufacturers, automakers are relying more and more on software to differentiate their products. The battle for the consumer is playing out in the interior of the vehicle and, increasingly, software is becoming the weapon of choice. The growing role of software in automobiles is reflected in the percentage of software-related recalls (Figure 1). Maintaining software reliability will be an ongoing challenge, especially since automakers and Tier 1 suppliers must accelerate their software development schedules to keep pace with ongoing changes in consumer electronics.
Andrew Poliak is automotive business manager at QNX Software Systems where he is responsible for the company's large automotive ecosystem. He has developed and is currently leading the QNX OEM Innovation Labs (OIL) Program. He is an avid speaker on the direction and future of telematics and in-car infotainment.
