Industry Research. Cool Vendors in Automotive, 2011

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1 Industry Research Publication Date: 19 April 2011 ID Number: G Cool Vendors in Automotive, 2011 Thilo Koslowski Automotive companies must address sustainability, digital convergence and new mobility models to provide new and existing customers with differentiated customer experiences that go beyond traditional mechanical engineering excellence. The use and integration of consumers' mobile devices, as well as addressing the need to reduce emissions, are leading to innovation outside the traditional automotive value chain. The four vendors in this research offer new approaches to addressing key consumer and environmental requirements by leveraging mobile networks, electronic devices and new back-end system integrations. Key Findings Gartner studies have shown that driver assistance technologies focused on accident avoidance and device-to-vehicle integration solutions are the desired, in-vehicle technologies among consumers. Sustainable mobility is one of the key trends that will impact the automotive industry's future, as public demand for resourceful and responsible transportation solutions grow. Consumer demand for electric vehicles (EVs) may not be maturing as quickly as EV proponents have hoped. Gartner predicts that, by 2020, 5% to 7% of all new vehicles will be battery powered. Recommendations For automotive manufacturers, suppliers and consumer electronics companies: Expand connected-vehicle offerings to the automotive aftermarket to address the needs of your existing customers, in addition to offering these features in new vehicles. Especially for off-lease vehicles, these add-on and upgradable solutions can increase the attractiveness of used vehicles. For automotive manufacturers, infrastructure providers and telematics companies: Focus mobility and service efforts on the operational aspects of car ownership, especially to promote consumer interest in new mobility concepts, such as electric mobility Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This publication may not be reproduced or distributed in any form without Gartner's prior written permission. The information contained in this publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This publication consists of the opinions of Gartner's research organization and should not be construed as statements of fact. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner's Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see "Guiding Principles on Independence and Objectivity" on its website,

2 TABLE OF CONTENTS Strategic Planning Assumption... 3 Analysis... 3 What You Need to Know... 3 ASP Technology... 3 Oxygen Audio... 4 Streetline... 4 Ubitricity... 5 Recommended Reading... 6 Publication Date: 19 April 2011/ID Number: G Page 2 of 7

3 STRATEGIC PLANNING ASSUMPTION Gartner predicts that, by 2020, 5% to 8% of all new vehicle sales will be for battery-powered cars. This number will grow to 15% to 20% by ANALYSIS This research does not constitute an exhaustive list of vendors in any given technology area, but rather is designed to highlight interesting, new and innovative vendors, products and services. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. What You Need to Know This year's Cool Vendors in automotive exemplify technological innovation that spans across smartphones, services, sensors and wireless communication. The result is the "connected vehicle," which is the ultimate mobile device. ASP Technology Copenhagen, Denmark ( Why Cool: ASP Technology's Anti Sleep Pilot (ASP) offers the first automotive aftermarket solutions aimed at addressing driver alertness and preventing accidents caused by fatigue. The company is currently offering an Apple iphone-based application and a portable, active device that can be attached to a vehicle's dashboard. Both products continually monitor the conditions that affect a driver's individual fatigue levels in real time, using a patented algorithm based on 26 different input parameters, including reaction times from touch-tap tests and risk profiles (e.g., body mass index). ASP alerts drivers to take a preventive break before reaching critical fatigue levels. Driver fatigue is a leading cause of automobile accidents, but technology offerings addressing driver alertness are traditionally limited to commercial vehicles and new, premium-brand passenger cars (e.g., Mercedes-Benz' Attention Assist). Gartner studies have shown that, in some markets, consumers prefer driver assistance technologies that are focused on accident avoidance over connected-safety offerings that enable post-accident communication (see "German Consumer Demand for Vehicle ICT Recovers, but Shows a More-Pragmatic Approach"). Challenges: ASP's main challenge will be creating broad visibility for its solutions' benefits in targeted consumer markets and offering attractive product pricing in various distribution channels. Consumers view safety- and security-centered, in-vehicle technologies as must-have features, but often dislike the idea of having to pay for them because, in an ideal situation, they will never use them. Furthermore, automakers' increased efforts in offering new driver assistance systems will lead to the introduction of new driver attention technologies across all model and brand lines in the midterm. These embedded solutions will provide benefits over aftermarket solutions, such as better integration with vehicle-specific sensors (e.g., cameras that can analyze driver eye movements). Who Should Care: Senior product planners and driver assistance technologists at vehicle manufacturers, suppliers and consumer electronics organizations should consider offering aftermarket solutions targeted at addressing attention issues related to driver fatigue. These Publication Date: 19 April 2011/ID Number: G Page 3 of 7

4 companies could potentially partner with ASP Technology to license the vendor's products or algorithms. Oxygen Audio Rosny-sous-Bois, France ( Why Cool: Oxygen Audio has developed an innovative, automotive aftermarket head unit that centers on the concept of device-to-vehicle integration to enable the embedded use of a smartphone's user interface (UI) and content over the vehicle's audio system. The company's O Series will initially focus on enabling the integration of iphones to enable users to access their itunes music collection, perform hands-free calling and access any of their iphone applications, including Internet radio, navigation and automotive-specific applications, while charging the smartphone at the same time. In 2003, Gartner first advised automotive organizations to pursue a device-to-vehicle integration solution for connected-vehicle strategies. Today, automakers around the globe continue to introduce this feature in more of their vehicle models, while others have made this approach the center of their "infotainment" strategies (see "Ford Sync Raises the Bar for Device-to-Vehicle Integration Solutions for Infotainment Applications"). However, there haven't been many deviceto-vehicle integration solutions specifically offered for the automotive aftermarket that leverage not only the available content on the mobile device, but also the device's UI itself. Oxygen Audio's innovative offering demonstrates an approach that will likely be adopted by other companies leveraging a mobile device's UI to access content and applications where it makes sense (e.g., using a mobile device to access audio content with an intuitive menu structure right on the device), instead of solely decoupling the UI experience from the device (e.g., by offering separate buttons on the head unit). Recent Gartner studies show that consumers prefer this option over a vehicle-specific UI today (see "U.S. Consumers Put Vehicle ICT Back on Their Wish Lists, but Feature Priorities Are Changing"). Challenges: Because Oxygen Audio's offerings are currently targeted at the automotive aftermarket, the company must expand its resources to focus on marketing, sales and distribution to reach consumers and installers in key markets. It will also need to offer a sufficient number of physical and technology interfaces to enable the integration of its head unit into a critical number of existing automobile models. However, the company's biggest challenge lies in having to address the growing driver distraction concerns regarding connected-vehicle applications and content. Oxygen Audio must develop a consistent UI guideline for accessing applications while users are driving an automobile to minimize distraction and potential liability concerns. Who Should Care: Senior product planners, connected-vehicle strategists and infotainment designers at vehicle manufacturers, suppliers and consumer electronics organizations can benefit from Oxygen Audio's offerings or get inspiration for their own solution designs regarding deviceto-vehicle integration solutions. Streetline San Francisco, California ( Why Cool: Sustainable mobility is one of the key trends that will impact the automotive industry's future as public demands for resourceful, productive and responsible transportation solutions increase (see "Key Automotive Focus Areas for the Next Five Years"). Streetline's sensor and Publication Date: 19 April 2011/ID Number: G Page 4 of 7

5 software offerings address this trend by delivering simple, cost-effective technology solutions aimed at realizing smart city concepts, including mobility-centric objectives. Streetline's initial focus is centered on smart parking solutions. The company has developed a smart parking platform that detects the presence of vehicles through a network of ultra-low-power wireless sensors located in each parking space. This information is then transmitted back to Web applications and wireless devices to provide users with real-time parking availability information across a city. The company also recently launched Parker, the first sensor-based, parking finder consumer application for the iphone. Streetline's application, which launched in collaboration with Los Angeles, provides drivers with information about available parking spaces, parking space time limits, pricing and whether meters take credit cards or coins. The application will also direct drivers to the nearest parking garages as an alternative to street parking. The next version of Parker will include the ability to pay parking fees by phone and receive alerts when a meter is about to expire. Streetline's target customers are government/municipalities, universities, private sector (e.g., garage owners) and consumers. In addition to parking-related applications, the company is planning to expand into other areas, including public safety, and to offer its data services on various device platforms, including in-vehicle applications. Challenges: Streetline's focus on sensor-based information gathering and sharing necessitates a broader technology implementation and partnership approach to deliver the desired results for end users. This requires careful consideration of business models and revenue-sharing agreements, in addition to managing wireless communication and deployment cost aspects. Passing costs or fees on to consumers is likely going to be very limited, which means that municipalities or parking garage owners will view a parking finder application as a differentiator to attract more visitors, instead of a core revenue generator. Potential technological competition for Streetline's parking solutions is the emergence of connected vehicles and the increase of vehicle-embedded sensors (e.g., cameras and radar sensors) that could collect and transmit similar information without the need for deploying such sensors in the infrastructure itself. Crowdsource applications, such as Google's Open Spot, which rely on users to physically enter parking space information into their smartphone (e.g., after leaving a parking spot), are less likely to challenge Streetline's technology due to their manual data entry approaches. Who Should Care: CTOs, senior business leaders and product planners at automotive organizations, telematics service providers, municipalities, retailers and parking garage owners can benefit from Streetline's solutions by offering customers an improved driving and parking experience. Additional benefits lie in addressing traffic, productivity and emission requirements. Ubitricity Berlin, Germany ( Why Cool: To address environmental concerns, automotive companies are diversifying their powertrain technology options. EVs represent one of the options, especially once battery prices decline and infrastructure requirements mature (see "The Electric Vehicle's Value Chain and Technology Evolution"). One of the key challenges for EVs in becoming an alternative to traditional, internal-combustion engines is the lack of available charging options outside an owner's garage or dedicated charging Publication Date: 19 April 2011/ID Number: G Page 5 of 7

6 stations at an employer's office building. The installation and operation (e.g., metering charges regardless of utilization) of dedicated private and commercial charging spots are resource and time intensive, but ubitricity is introducing a new way to address this challenge. The company has developed a virtual charging network that can turn any electric socket into a charging point for EVs by supplying a specific socket system, mobile meter and wireless communication back-end system (the company estimates the per-unit cost for its specific sockets is about 50). Once a customer using the ubitricity network connects the vehicle's power plug into a specific ubitricity socket, a meter in the vehicle or built in to the cable measures how much electricity has been used to charge the car, wirelessly transmitting the information to the company's billing back end. After establishing the cost, the driver will be charged for the electricity use, and the infrastructure partner will be reimbursed. Challenges: Actual consumer demand for EVs (i.e., fully electric vehicles and plug-in hybrid vehicles) is still uncertain and may not be maturing as quickly as EV proponents have hoped (see "Gartner Study: Strategic Market Considerations for Electric Vehicle Adoption in the U.S."). Gartner predicts that, by 2020, 5% to 7% of all new vehicle sales will be for battery-powered cars. Most consumers may decide to use these vehicles as commuter cars, rather than having them become the only vehicle in a household. Users of electric cars for commuting purposes are likely going to adapt to the limited range of EVs and change their driving behaviors accordingly. This could mean that charging their vehicles at home and/or at the workplace will be sufficient, negating the need for additional private and public charging stations in the short term to midterm. Additionally, improvements in battery technologies will increase the driving range, further reducing the need for ubiquitous charging stations. Who Should Care: Senior business and technology leaders at automotive as well as energy and utility organizations could benefit from ubitricity's solution. Furthermore, municipalities, retailers and parking garage owners can leverage the company's offering to benefit from potential EV charging-related business opportunities. RECOMMENDED READING Some documents may not be available as part of your current Gartner subscription. "Predicts 2011: The Automotive Industry Accelerates Innovations" "Smart's Connected Vehicle Solution Combines Engineering Expertise With Mobile Device Ingenuity" "Hype Cycle for Vehicle-Centric Information and Communication Technologies (Vehicle ICT), 2010" "Automobile of the Future: The Ultimate Connected Mobile Device" "German Consumer Demand for Vehicle ICT Recovers, but Shows a More-Pragmatic Approach" "Ford Sync Raises the Bar for Device-to-Vehicle Integration Solutions for Infotainment Applications" "U.S. Consumers Put Vehicle ICT Back on Their Wish Lists, but Feature Priorities Are Changing" "Key Automotive Focus Areas for the Next Five Years" "The Electric Vehicle's Value Chain and Technology Evolution" "Gartner Study: Strategic Market Considerations for Electric Vehicle Adoption in the U.S." Publication Date: 19 April 2011/ID Number: G Page 6 of 7

7 This research is part of a set of related research pieces. See "Cool Vendors 2011: Delivery and Consumption of Services Is Empowering, and Cool" for an overview. REGIONAL HEADQUARTERS Corporate Headquarters 56 Top Gallant Road Stamford, CT U.S.A European Headquarters Tamesis The Glanty Egham Surrey, TW20 9AW UNITED KINGDOM Asia/Pacific Headquarters Gartner Australasia Pty. Ltd. Level 9, 141 Walker Street North Sydney New South Wales 2060 AUSTRALIA Japan Headquarters Gartner Japan Ltd. Aobadai Hills, 6F 7-7, Aobadai, 4-chome Meguro-ku, Tokyo JAPAN Latin America Headquarters Gartner do Brazil Av. das Nações Unidas, andar World Trade Center São Paulo SP BRAZIL Publication Date: 19 April 2011/ID Number: G Page 7 of 7