The future of smartphone integration

Vehicle manufacturers are still faced with a dizzying array of choices for integrating smartphones and the app experience into the car. But Nokia was able to provide the automotive industry with some peace-of-mind by announcing that Terminal Mode (an integration solution developed through a collaboration with CE4A) will be installed on up to 150 million handsets worldwide from next year. Such a quick ramp-up of Terminal Mode on smartphones is undoubtedly good news for those vehicle manufacturers that have already committed to deploying compatible solutions over the coming years.

But the question on everyone's mind was: will other handset suppliers also adopt the standard too? The key company to watch out for here is Google, which has a rapidly growing share of the smartphone OS market. Google could be crucial in deciding whether Terminal Mode becomes the de-facto standard for smartphone integration within the industry (excluding usual suspects such as Apple), or just a Nokia-specific approach. Google is still investigating Terminal Mode to see if it matches their vision of smartphone integration in the car, but did not rule out developing and promoting its own standard.

So it seems that for now vehicle manufacturers will have to hold their breath for a little longer to see if the momentum towards Terminal Mode continues, or if they will face more fragmentation and pain.

The future of the cloud and the implications for tier-one suppliers

Google also gave an interesting presentation on many of the new features it is integrating into its search engine, and that could play a big role in the car. The common theme across all of these ideas was the dominance of the "Cloud". Google has already launched its off-board smartphone navigation solution across many markets, and is aggressively looking for new ways to enhance the experience for their customers. One example of this is their development of a powerful cloud-based voice recognition and text-to-speech solution, capable of taking the in-car experience a step further towards a seamless integration with the Internet. When combined with their off-board routing solutions and other location-based services (such as traffic information and POI), this is raising more than a few eye-brows within the traditional automotive supplier base.

The concern amongst tier-one suppliers is that as a growing proportion of the intelligence shifts from being embedded towards being hosted on the Cloud, what role is left for them to fulfil? These suppliers remain experts in developing advanced automotive-specific navigation and infotainment solutions, but their business models revolve around unit-sales of embedded systems. Their expertise doesn't currently lie in developing cloud-based solutions, and many are now struggling to determine new strategies and new partnerships in order to adapt.

Embedded intelligence is likely to continue to dominate in the short and medium-term future, but Google’s presentation reinforced the fact that tier-one suppliers will need to start considering now what their long-term role will be within the connected car value chain in order to avoid any nasty surprises.

Andrew Hart, a Senior Telematics & ITS specialist within SBD’s Japan office, also presented at the conference. He explained to the audience why vehicle manufacturers are facing challenges in selling navigation and infotainment in China, and how they can resolve these through innovative features such as Apps in the car.

SBD has conducted two surveys into consumer attitudes towards Apps and smartphones in the car in China and Europe. If you would like to find out more about these surveys, please contact Juanita Appleby by email on jappleby@sbd.co.uk.