Frost & Sullivan CES 2019 Roundup – Automotive Industry Gets Pragmatic with C.A.S.E Use Cases while Alexa Emerges as the Clear Showstopper
Jan 14, 2019
CES 2019 wrapped up amidst an Alexa overhaul, a barrage of autonomous pods and shuttles, and a clear message that the automotive industry is finally looking to near term autonomous and connected solutions that can improve the customer experience and lend a hand in the monetization game. Among the key trends that the Frost & Sullivan team observed at this year’s show included:
Cellular or C-V2X – not 5G but LTE-based
While not a new concept, one of the more readily implementable CES displays this year was the C-V2X showcase by Qualcomm and Savari. The interesting part is the use cases highlighted by these suppliers which tackle current challenges in road safety and traffic management, with solutions based on LTE making it easier for OEMs to implement. Ford is committed to C-V2X on all its models by 2020 and even GM—with DSRC based V2V already on its Cadillac—is expected to pivot to C-V2X for its other models.
Use cases like intersection assist and pedestrian assist make this is a very usable technology and a key sensor input in the autonomous driving market, irrespective of the level, given sensor limitations. Qualcomm’s roster of partners, suppliers and customers for C-V2X is proof enough that theV2X market will finally start experiencing growth. While not really V2X, another interesting company we saw in the traffic management space was Traffic Technology Services (TTS), a company that specializes in acquiring connected traffic signal information and using its proprietary algorithms to provide this information in a usable way in cars. Audi is a key TTS customer and, interestingly, this technology can go beyond just an information display to be used in systems like Automatic Emergency Braking (AEB) and other safety oriented applications.
Blockchain in the data security space
A much discussed subject at the show was data being the next big currency for the automotive ecosystem. This is data about drivers, the vehicle and any other data, such as camera sensor data, that can be monetized under different applications. However, given increasing data privacy and security concerns and the push of regulations like GDPR, it is important that extreme security be applied across the breadth of this emerging opportunity. This is where Trillium Secure’s blockchain-based trusted data platform was interesting, representing an innovative use for Blockchain technology. While most other blockchain players are using it in the parts, warranty and after sales arenas, the use of the technology in data as a service is a novel and much needed innovation. While we did see several other cybersecurity companies cementing their approach—from Argus working with NVIDIA to Karamba, Arilou and Irdeto— it does still feel that the cybersecurity implementations will remain restricted to specific ECUs, domain controllers and high compute platforms to protect important advanced driver assistance systems (ADAS) or autonomous driving architectures.
Autonomous Shuttles – not fancy tier 1 pods but ones that are actually being tested
Through our discussions with Local Motors, we understand that Olli has been deployed at the University of Buffalo and in Australia and is expected to ramp up on the numbers deployed, essentially through targeting campus type applications. While FMVSS approval for the Olli has been a challenge, given its curb weight, what we understand is that the next generation is being designed closer to other competitors, such as May Mobility, who have gotten approval under the NEV category. The key objective for players in this market has been to arrive at a suitable business model that involves a number of key parameters such as number of trips needed to be completed per day, number of passengers needed in each trip or number of routes. Alternatively, it can be an all-inclusive fixed fee per year or month, covering fleet management and other downstream maintenance elements, paid by a main operator to these shuttle companies as is being done by a few companies. It is interesting to see that players in this market have started generating revenue and increasing the number of their trips. With Robotaxi implementations underway as well, this is the market where L5 will take off, providing limited volume opportunities to the LIDAR/sensor supply base and even AI developers.
VTOL – seems to be more hybrid than fully electric at the moment
Bell Helicopters was a show standout. The company displayed its vertical take-off and landing (VTOL) concept with a giant but actual prototype.Looking to launch services via Uber by the mid-2020s, the prototype is geared to transport four passengers and a driver, and has a 150 mile range. Although this market is largely targeted at transporting people, the hybrid approach makes it very evident that VTOL manufacturers want to address ROI concerns before tackling congestion issues. Hybrids will offer improved capacity in terms of weight carried and distance travelled. Hence, logistics services/military equipment transport are expected to be better bets, applications for which pure EV versions of VTOLs might prove inadequate. While virtual rides were being offered by Pal-V and Bell making it a game like experience, it will be interesting to see what actual customers think of it, with live rides much like the autonomous shuttle rides at CES. Hoversurf also had on display its flying bikes that it supplies to the Dubai police.
LIDAR Market – focused competition emerging in the solid state LIDAR market
Implementation and execution, rather than the technology itself, have posed difficulties for LIDAR companies. Innoviz, Cepton, and LeddarTech are among the companies pushing past this challenge. From Cepton’s unveiling of two new LIDAR solutions and announcing a partnership with Japanese automotive lighting supplier , Koito, it is very clear that LIDAR manufacturers, after finalizing their respective optical and associated technology, are moving into the business and execution phase and forging strategic partnerships. In addition, AEye showcased its iDAR sensor which brings about the fusion of a solid state LiDAR with a high resolution camera to create a new data type called Dynamic Vixels. This integration is done in real-time at the sensor level, rather than by camera and LiDAR data fusion after the scan. Another refreshing aspect this year was seeing many LIDAR suppliers with products ready for the ADAS and L2/2.5 market.
In-Car Commerce Marketplace – machine learning to the rescue
While the first generation of the in-car marketplace launched by Xevo for GM was interesting, the concept lacked proactiveness and contextuality – meaning most of the heavy lifting was left upto to the user for even applications like fueling. The second generation of that product showcased by Xevo at CES 2019 exhibits greater intelligence and is firmly hooked into the driver’s habits and schedules and is a much more intelligent and capable commerce assistant. With over 40 brands integrated, Xevo is increasingly creating an exciting commerce assistant – one that can actually place a Starbucks order if it can understand your favorite drink and other routines. Xevo is also bringing in a complementary phone app to complete some of the transactions as well and also showcased an Alexa integration to bring voice into the equation. Xevo is expected to announce a clutch of more OEMs as its customers in the next few months, making this a trend to watch out for in the market.
The other implementation that caught our attention is a product that Honda is working on out of its Silicon Valley unit, called Honda Dream Drive. One aspect of this is a marketplace that Honda is building in the car with a startup called ConnectedTravel. The interesting observation here was the placement of this solution purely as an app compatible with Android and Apple phones through Android Auto and Carplay. While the functionalities are very similar to the Xevo solution, Honda is currently managing this directly in terms of pulling the brands to the platform and even using its own voice solution to perform select tasks. With the ability to not just locate and identify but also to reserve and book with limited steps is a crucial move forward in the right direction. This is increasingly a very key data monetization avenue that most OEMs are expected to offer.
Self-healing Software- OTA done the right way!
As vehicle content becomes increasingly more software/electronics oriented, the fixes are also going to be primarily software driven, which can be done over the air (OTA). Vehicle architecture will be crucial to track the health of the components over their lifecycle and this data can be used to not only identify recalls earlier but also to design better components. The lack of familiarity with new components in vehicle architecture has resulted in many slips in QA processes during OEM manufacturing and has increased the total cost of recalls over the past decade. Not your usual OTA concept, Aurora Labs uses machine learning (ML) algorithms to address existing challenges in a unique way by detecting line-of-code faults and predicting downtime events with cost effective rollouts (only the delta line of code patch is transmitted) to all ECUs in the vehicle. Not to be confused with what Tesla has been able to achieve with OTA, the interesting spin to this could mean that the updates can be rolled out to adapt and better fit with any vehicle architecture and also be optimized for changing driving environments.
Apps through Aggregators – marketplace done a different way
Ford was one of the first OEMs in the US to embrace the concept of apps and, in fact, started offering a number of apps on its SYNC platform, later dubbing it SYNC Applink. The challenge, from a developer perspective, was the time and energy needed to work on a customized OEM solution making it a very low volume play with limited revenue potential. At the Ford booth this year was Autonomic, an investment and later an acquisition made by Ford, which launched the transportation mobility cloud last year at CES. This year the investment turned into action with several implementations showcased with partners such as Go Ride. The idea of Autonomic is a cloud platform that will ingest the telemetry data from Ford vehicles and provide a standardized format for developers to use and consume, and charge them based on volumes or typical API calls. Essentially the idea is for Autonomic to get other OEM customers and, based on the pace at which deployments have happened, this might not be out of the realm of possibility.
Alexa in the Car- will definitely go deeper than smart homes or vehicle controls
In many ways, CES 2019 will be recalled as the year “Alexa Exploded”. The sheer number of devices, including cars, into which Alexa now integrates and the skills that it is being given, is breathtaking. In terms of implementation into cars, the interesting aspect was not the pureplay Alexa offer but the showcases by automotive software integrators like Elektrobit who are integrating Alexa deep into the entire manual and automated driving experience. Here, Alexa is not just a commerce or search or music assistant; it can warn of dangers and be a safety assistant as well. While Google chose not to highlight its automotive aspirations or what it is up to on the Google Automotive Services side, Alexa was clearly a very dominant solution on display. Even Frost & Sullivan’s recent survey on connected car experiences among over 2000 consumers in the US and Europe reveals that Alexa is the personal assistant that over 50% of drivers in both regions want to use in the car. The other interesting personal assistant on display was the one at Intel’s booth that focused on a virtual assistant in a fully autonomous mode for passenger entertainment experience.
Satellite Connectivity - swarm intelligence for orchestrating ubiquitous connectivity
Ford seems to have taken its connectivity initiatives to the next level by offering not only MY 2019 models with embedded connectivity, but ubiquitous connectivity for its mobility services as well by acquiring Autonomic last year. Autonomic provides Transportation Mobility Cloud (TMC) which is an open, OEM-agnostic cloud-based platform that helps connect various mobility data sets such as city infrastructure data, transit data and vehicle data and presents it in a standardized format. To strengthen this mobility value proposition, Autonomic partnered with Swarm Technologies, a satellite IoT start-up that improves the ubiquitous connectivity of these services. Essentially, Swarm Technologies is a microsatellite network which is expected to offer low cost messaging for safety critical applications and mobility services where connectivity is unavailable. Among the more practical use cases coming out of this partnership are likely to be connected agriculture for rural areas or even car sharing services that are currently restricted to only urban areas.
Automated Driving –hold on, there is a Level 2.5 according to suppliers
A fascinating trend at CES this year was the focus of both small and big suppliers, chip vendors, and AI developers on solutions that can be deployed for achieving L2 automated driving. From TomTom’s partnerships with Denso and Delphi for L2 solutions, and NVIDIA’s platform for L2 and L2.5 that includes some form of HD Mapping and localization techniques for better awareness, several of the solutions on display are going into production very soon and will be where volumes reside. Intel’s Mobileye booth spotlighted its L4 vehicle with its EyeQ4 fully based on cameras and even the in-production 2019 BMW X5 with Mobileye’s Trifocal camera. We keenly observed how Mobileye is trying to provide mathematical rules based on its RSS framework for autonomous driving and how it is ramping up its REM efforts and including more partners like Autoliv. Several driver monitoring solutions, ranging from Mitsubishi Electric to others, were on also display reinforcing how L2 and 3 implementations are key market opportunities for the near future.
Vehicle Subscription – gets electrified with modular platform
Hyundai announced plans around its electric vehicle (EV) subscription service focused on miles, minutes and megawatts. These services are expected to stem from their new EV architecture called Electric - Global Modular Platform (E-GMP) to seed a range of EVs. The idea of this modular platform is to switch between different vehicle bodies for specific situations, which will make it a unique proposition for shared mobility services and emergency responders. Hyundai is also looking to personalize this experience through its style set free concept which, essentially, is a vehicle marketplace for lifestyle, in other words, digital retailing of vehicle configurations. This idea has had a long history with luxury car makers but for a mass market OEM to take this route could potentially mean new ways of dealership engagements.
Feature on Demand – Audi is joining the race
While traditional OEMs have blamed their vehicle architectures, dealership networks and many other issues for their being unable to emulate Tesla’s feature on demand (FOD) strategy, Audi is clearly venturing into this space with its eTRON EV. Audi will offer customers a choice of features that they can buy, after the vehicle is delivered, in multiple formats – free trial for a month, one month at $0.99 and monthly and annual subscription options. Interestingly, the feature is already built into the car and the FOD payment unlocks a key that makes the feature available. Audi will remind customers two weeks before their feature subscription expires to either renew or let it lapse. And all of this will be done through the Audi owner app and not on the dash. The current lineup of features available for this includes matrix LED, park assist, smartphone package (essentially Carplay) and a few others with the company expected to add to this list. Audi is restricting this to the eTron where the architecture has allowed them to do this. No word yet on which other models will get FOD.
Mobility Marketplace – HERE is targeting Uber and Lyft’s duopoly in many markets
One of the comments heard repeatedly, especially from European companies, was the need to break the stranglehold of companies that use the internet as a key technology – whether it is blockchain coming to the rescue of Monopoly in the search or social media market or HERE in its effort to democratize mobility options for customers who today rely solely on Uber, Lyft or other ride-hailing giants. HERE’s idea of assembling a marketplace is by bringing in the demand through partnerships with airlines and corporate companies, and the supply through local taxi companies, and micro transit solutions. While HERE is creating a solution where its commissions will come from supply partnerships, it is also not taking a city approach, unlike MaaS. It is focusing on making this solution more easily consumable by partnering, for example, with airlines looking to solve first and last mile transportation problems. The platform that has set a record performance with 1.4 million drivers in just one year is gaining increasing attention and might be the silver lining for HERE’s location assets in a new market. And it is interesting as a concept as taxi companies and other solutions that were previously ignored will now have new partners helping them generate interests. The SoMo part of HERE’s solution is also worth highlighting as it’s a good spin on the carpooling market that has failed to take off in any big way.
Passenger Experience – Warner Brothers, Disney, Lego and Atom are in the car
Honda’s Dream Drive team had a tablet-based passenger experience platform that integrates partners like Lego, Disney and other media platforms. The idea is to have an AR-enabled experience that allows users to play games, among other things, and earn points that can be used for buying gift cards through partners that Honda has assembled. This is an experimental form of brand loyalty. Intel had a partnership showcase with Warner Brothers that enables users to consume comic books, watch movie trailers and even book movie tickets (a feature that Honda had with partner company ATOM). It is reassuring to note that some of the focus is finally shifting to the passenger experience, whether in manual or autonomous mode, with automakers trying to tack on the loyalty angle.
Big Brother Issues in Data Privacy – neutral servers and anonymization to the rescue
In continuation of the real buzzwords from last year’s show, ‘data monetization’ has started to move away from questions such as who owns your data to a more friendly reception from OEMs who no longer feel threatened by the likes of data aggregators and seem to have found the common working ground. This could be due to the fact that data brokers and data platform providers have found ways to help OEMs with tools that support GDPR, data anonymization and data privacy. Otonomo’s partnership with Daimler is expected to be the first of many where data brokers aid OEMs in managing data privacy elements while protecting customers’ data anxiety. Neutral servers, meaning data made readily available to third party service providers with the consensus of the user, will be able to provide a host of exciting, value-added services to customers. Currently this is restricted to only private vehicle owners; such partnerships will make the data play even more exciting when OEM owned shared mobility initiatives begin using these data brokers to create valued-added services for the consumer.
Besides the key trends discussed above, several other showcases were worthy – Aurrigo and IBM Watson integration for last mile transportation option, the NXP and Kalray partnership solving the power hungry compute issues of L2/L3 platforms, several AI startups, autonomous vehicle robotics, and Hyundai Elevate and Honda Autonomous Work Vehicle concepts for first responders, emergency services and a host of other safety critical services. There were also the first timers -Toyota Boshoku exhibited interiors for L4/ L5 driving by creating an emotional connect for lighting, scent and sound, while presenting fully flexible seat arrangements for the home and office experience.
Overall, the show was a practical showcase of autonomous shuttles, in-vehicle personalization/marketplace, personal assistants and integrated mobility platforms, rather than a scene from a science fiction movie.
A shorter version of this article originally appeared in forbes.com. This article was authored with support from the Frost & Sullivan CES team comprising Niranjan Manohar, Franck Leveque, Praveen Chandrasekar, Ajit Chander and Mark Fitzgerald. Frost & Sullivan will soon be publishing an exhaustive report capturing the key trends and showcases emerging from CES 2019.