Automotive M2M Now Insight Report

CONTENTS

18 ANALYST REPORT

26 AUTOMOTIVE GROWTH

28 CONNECTED CARS

30 NEW MOBILITY

INSIGHT REPORT M2M NOW INSIGHT REPORT Continuing our new series of specially commissioned Insight Reports, Greg Basich of Strategy Analytics Automotive Multimedia and Communications Services examines the many business challenges and technological opportunities in automotive M2M and internet-connected vehicles

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AUTOMOTIVE M2M Connected car technology is transforming our wireless lifestyles, says Lars Thyroff

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BIG DATA Yves de Montcheuil says the entire auto industry ecosystem is benefiting from the use of big data

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AUTOMOTIVE M2M Automotive promises to be a top M2M growth sector, says Dominikus Hierl

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CONNECTED CARS Michel Zwijnenberg talks to Saverio Romeo about a vital change in Dutch SIM regulations

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CONNECTED CARS AT MWC 2014 Interest in connected cars continues to grow at Mobile World Congress. Jeremy Cowan reports from Barcelona

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AUTOMOTIVE M2M Steve Millstein tells Jeremy Cowan there are issues in automotive M2M that “nobody wants to confront”

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The report’s author is Greg Basich, senior analyst, Strategy Analytics Automotive Multimedia and Communications Service

Snapshot Automotive infotainment and telematics are coming into their own.

Automakers are equipping their vehicles with advanced infotainment, safety and, for electric vehicles, powertrain management systems that make use of wired and wireless connectivity to enable connections to outside networks. In this new connected car environment, the entire industry value chain associated with the aforementioned technologies is growing and provides new opportunities. This report, prepared by Strategy Analytics exclusively for M2M Now magazine, provides a highlevel overview of different aspects of the connected car industry and its competitive environment.

Executive Summary Automotive Meets Wireless Shift

connectivity via mobile device tethering, enabling use of smartphone functions in vehicles.

Automakers are also in the process of rolling out embedded solutions. Over the long run, embedded connectivity, along with a range of other automotive sensor technologies, will be used to enable autonomous driving. This report examines the overall automotive M2M marketplace in this context.

One question many outside the industry pose is ‘Why connect vehicles at all?’ For consumers, the benefits include access to a range of services that enable more efficient, safer transportation. For automakers, connectivity and the functions and services enabled by it allow them to differentiate their brands, create new sources of revenue and find ways to mitigate handheld use of mobile devices in vehicles, making cars safer to drive in an era when ubiquitous connectivity is expected in the developed world.

The wireless and automotive industries are converging. This image shows some of the questions and considerations partners in the telematics value chain must evaluate in order to develop successful automotive connectivity platforms.

Embedded or tethered connections are enabling a host of new business models and opportunities in the global automotive industry. Today, nearly all automakers are focused on providing

In terms of implementing tethered connectivity, many original equipment manufacturers (OEMs) are looking to mobile device apps and operating systems for inspiration, developing and using platforms that enable the addition of, and updates to, infotainment features and content.

Beyond ubiquitous mobile device connectivity,

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more OEMs are beginning to embrace the idea of offering embedded connectivity across their vehicle line-ups.

Although General Motors and its OnStar subsidiary have been providing embedded connectivity for years, a mix of low consumer willingness to pay for connectivity, limited hardware capabilities and the long automotive production cycle have all been barriers to more widespread adoption. Today, though, at the start of the roll-out of embedded 4G LTE modems by a number of automakers globally, including General Motors, Tesla, Volkswagen and its luxury brand Audi, automakers are beginning to enable capabilities in cars that have long been taken for granted in the mobile device marketplace. Another example is Qoros in China, which is offering free lifetime 3G connectivity. BMW offers some of its connectivity services (BMW Assist) free for 10 years. One major example is the ability to provide over-the-air software and firmware updates, though this is just the tip of the iceberg.

New capabilities enabled by embedded connectivity include improved customer retention management (e.g. better vehicle diagnostics and service scheduling), new safety applications, video streaming and access to a high-bandwidth WiFi hotspot. Other examples include electric vehicle powertrain management, connecting wearable devices and eventually vehicle-to-vehicle communication.

In Europe, the European Union’s push to legislate connectivity through the “eCall” mandate that requires automakers to install devices that provide automatic crash notification via an embedded cellular modem, has held a great deal of promise for the telematics industry but due to the mandate’s continually delayed implementation, and the nature of the legislation itself, the mandate isn’t likely to bring about ubiquitous connectivity in the way many in the industry have wanted. Still, eCall represents an effort to improve post-crash response and will likely result in more lives saved.

In general, greater vehicle connectivity means access to realtime vehicle location and status information via mobile devices, the availability of new infotainment streams and services in the car, better customer relationship management (CRM) for OEMs, sending and receiving vehicle sensor data for safety purposes and eventually autonomous driving.

Brought-in Connectivity The vast majority of automakers have some kind of smartphone connectivity solution in the market today. They enable connectivity via a wired or wireless connection, for example USB and Bluetooth. OEM mobile device connectivity platforms offer some form of hands-free calling control as a basic feature.

The current ecosystem for mobile device connectivity and related applications is generally specific to each automaker and is composed of many disparate parts, including some kind of software integration solution and branded and white label applications that provide access to vehicle functions via a smartphone and the use of specific smartphone applications via the vehicle’s head unit.

Beyond a basic wired or wireless connection, smartphone connectivity in the vehicle relies on some kind of software

Forecast Connectivity ECU Units And Revenue (US $ Millions)

Although the number of ECUs outside the head unit is set to grow substantially, as more cars become connected with embedded modems, either via a telematics ECU or with the modem integrated into the head unit, the number of separate connectivity ECUs (ECUs that enable Bluetooth and WLAN connectivity but do not have a modem) shipped globally will peak and begin to fall.

integration solution that links the in-vehicle infotainment system to the smartphone. Solutions in the marketplace include the Car Connectivity Consortium’s MirrorLink standard and numerous proprietary offerings, including mySPIN by Bosch SoftTec, OpenCar, CloudCar, Airbiquity’s Choreo, Abalta’s Weblink, Ford and Luxoft’s Applink, and Obigo’s App Connector, among others.

One major recent source of competition for companies and organisations offering smartphone connectivity solutions is the entrance into the market of hardware and software companies that have traditionally operated outside the auto industry, with two of the largest players being Google and Apple.

Google announced its Open Automotive Alliance (OAA) at the 2014 International CES. The OAA, as described by Google, is designed to enable Android devices to connect to a vehicle and “enable the car itself to become a connected Android device.” Members of the OAA, in addition to Google, include Audi, General Motors, Honda, Hyundai and Nvidia.

Apple made its own announcement of a smartphone connectivity solution for its devices, which the company dubbed CarPlay, at the 2014 Geneva Motor Show. OEMs committed to supporting CarPlay in production models include Ferrari, Mercedes Benz and Volvo. Other OEMs, including BMW, GM, Ford, Jaguar Land Rover, Kia, Mitsubishi, Nissan, PSA Peugeot Citroen, Subaru, Suzuki and Toyota, have signed on but have not yet announced official in-production support for CarPlay.

Ford, having taken an early lead in providing mobile device connectivity with its SYNC platform, has taken a great deal of criticism over its latest SYNC with MyFord Touch system. At least partially as a result, the company is making major changes to its in-vehicle infotainment operating system, moving from primarily a touchscreen solution back to physical knobs and plans to improve its voice recognition technology.

Ford hasn’t yet announced specifics for embedded cellular connectivity, though the OEM’s CEO Alan Mulally has publicly stated that Ford has a goal to add embedded modems to its

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vehicles, starting with Ford EVs and Lincoln models and then implementing broader connectivity in Ford-brand models.

Today, Ford is focused on maintaining its lead in smartphone connectivity and is building its app development programme, integrating new apps and services into its AppLink platform, for example in the 2015 Mustang in the U.S. and bringing SYNC with AppLink to new regions, such as Europe. The automaker is also improving its outreach to developers in the form of a Ford developer conference.

General Motors provides mobile device connectivity, but the automaker is primarily focusing on embedded connectivity with its roll-out of 4G LTE via its OnStar subsidiary with carrier partner AT&T. GM’s approach to mobile device connectivity is to enable the use of smartphone apps that provide access to vehicle status information and control of certain vehicle systems (door lock/unlock, etc.) and tethered connectivity as an alternative to embedded connectivity.

Ford and General Motors are notable for investing in largescale app development and developer outreach programmes, though many OEMs have some kind of outreach to third-party developers to create either OEM-branded (white label) applications or integrate existing apps into an automaker’s mobile device connectivity platform. Ford and GM have created their own software development kits (SDKs) and application programming interfaces (APIs) for third-party developers to download, free of charge. Their goal is to foster a software ecosystem where developers with promising apps designed for the automotive environment can submit them to the OEMs for potential integration with current or future infotainment systems. Other OEMs are offering their own SDKs, and have internal groups dedicated to developer outreach, but are interested in establishing a dialogue and business relationship prior to providing the SDK or access to other OEM development tools.

Another OEM taking a more open approach to fostering a development community is Mazda, which has partnered with OpenCar, which provides an HTML5-based automotive app development platform, and has made a statement calling on developers to create apps for vehicles.

With respect to electrified vehicles, the OEMs that sell them, offer smartphone applications that allow for electric vehicle status monitoring, e.g. the state of charge, range left, charging station locations and control over various charging functions.

Examples include General Motors with its Volt, Spark EV and ELR, Nissan with its LEAF and Car Wings platform, Ford with its electrified models (e.g. the Focus Electric and MyFord Mobile app), BMW with its i sub-brand models (via the i-Remote app), and Kia with its electric Soul EV (via Kia’s UVO E Services).

Forecast Telematics ECU Units And Revenue (US $ Millions)

The number of separate embedded telematics modules (ECUs with a built-in modem) and revenue is set to grow significantly up through the end of the decade.

around their connected service offerings. The vehicle is a relatively new market for carriers and is growing because automotive OEMs are promoting their connected infotainment systems in order to differentiate their products.

One major issue is that of embedded connectivity being provided by a specific carrier, preventing OEMs, and consumers, from simply adding or sharing a mobile data plan with a vehicle’s. This situation could change with the advent of a re-provisionable SIM but this technology has yet to appear in specific OEM connectivity plans or in production vehicles.

In North America, AT&T has made a number of recent moves including the launch of its AT&T Drive programme and related partnerships. Automotive OEMs, including Volkswagen’s Audi brand and General Motors have committed to the roll-out of 4G LTE service, via embedded cellular modems, across their vehicle line-ups and both have selected AT&T as their respective carrier. Audi has announced pricing for the U.S. market and it remains to be seen whether Audi buyers will be willing to pay an ongoing fee for a vehicle-specific data plan.

General Motors has formally announced 4G LTE for its Chevrolet, Buick and Cadillac brands. In addition, the smallbut-dynamic Tesla Motors has also chosen AT&T as its carrier partner. Sprint provides connectivity to Chrysler’s Uconnect system in North America. Other OEM partners include BMW, Ford for its EVs and Nissan, for its Car Wings platform (on the electric LEAF).

Built-in Connectivity

Verizon has retrenched in the automotive telematics space after having lost business to AT&T, most notably with General Motors, but the company now has a deal with Hyundai Motors of America to provide connectivity for that automaker’s nextgeneration Blue Link system. Verizon also provides connectivity to Mercedes for its mbrace2 system and Volkswagen for its Car Net system.

Built-in automotive connectivity begins with wireless service availability. The role of telecommunications companies in the auto industry is growing as they strike new deals with automakers globally to provide embedded connectivity solutions. Not only are they providing connectivity, many are attempting to build new platforms and business models

In Europe Vodafone is currently ahead in the telematics space and recently signed on to provide Audi and its parent brand Volkswagen with 4G LTE connectivity in that region.

Vodafone also has relationships with Volvo for its aftermarket solution, with BMW in Europe, and others, including Fiat,

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Hyundai, Jaguar Land Rover, Porsche, Mahindra and Toyota.

French telco Orange is providing connectivity services to Renault for that automaker’s R-Link system.

Bouygues Telecom provides service to Peugeot Citroen for its in-vehicle telematics platforms. Deutsche Telekom has a deal with Daimler to provide connectivity for Mercedes-Benz vehicles, which is offered with the COMAND Online multimedia system. General Motors plans to introduce 4G LTE connectivity via its Opel brand in Europe. In addition, GM’s OnStar subsidiary reached an agreement with Spanish telecom network operator Telefonica for connectivity services outside the U.S. and Canada, including Europe (via Telefonica Europe), Latin America and elsewhere, with the most recent introduction of OnStar service in Mexico. Tesla is another recent Telefonica partner.

In China, major telecom carriers include state-owned companies China Unicom and China Mobile. China Unicom currently a carrier partner for a number of automotive OEMs and their telematics programmes in China. Partners include Audi (connect), BMW (Connected Drive), BYD (iSystem), Chang An Auto (In Call), Chery (M1EV), Hawtai, Quoros, and SAIC Roewe. China Mobile provides connectivity for GM’s eMotion platform, and Nissan’s Car Wings platform (for the LEAF) in China.

Revenue Challenge Although growing consumer interest in connectivity is of interest to many telecommunications companies, they face a number of challenges in getting vehicle owners to use their services, especially when they require an extra data plan or additional data plan fees.

OEMs are experimenting with different ways of paying for connectivity, including adding the cost of data to the up-front price of the vehicle, for example BMW offering 10 years of connectivity for free. Others charge subscriptions for access to specific services while simultaneously allowing free use of others, examples of this approach including General Motors (Onstar and MyLink). A third approach is to offer a long trial period for certain services but ultimately charge a subscription for all services. Hyundai’s Blue Link system takes this approach, with a three-year free trial period for the basic service, paid thereafter, and subscriptions required from the get-go for other specific services. A fourth example is Qoros, the ChineseIsraeli automaker that is selling its Qoros 3 sedan (saloon) in Europe and China, with its Qoros Cloud service. Qoros simply states that 3G connectivity and related services are free.

Cloud-based Telematics Platforms To enable the wide range of services available from different OEM solutions, automakers are increasingly turning to platforms that move services to the cloud rather than build them into the head unit’s software from the get-go. Some companies are using cloud services for their entire platform, moving the majority of infotainment features off-board, whereas others are simply using cloud-based applications to provide access to more content and services.

Cloud services provide a mix of benefits to automakers and Tier 1 and 2 suppliers. Some key benefits include the ability to easily offer new services and replace discontinued ones, the ability to use run analytics on data being sent to and from the system, off-board storage, an added layer that can be secured independently of the vehicle and the ability to provide thirdparty applications with access to various services.

BMW uses WirelessCar for its BMW Assist service roadside assistance and concierge service offering, which the automaker includes in its ConnectedDrive suite. Volvo’s Sensus Connect uses an HTML5-based platform and telecom services company Ericsson’s Connected Vehicle Cloud platform via a carrier partnership with AT&T. The aforementioned Tier 1 supplier Harman offers the Aha Platform, which provides audio content services to a number of OEMs, including Chrysler’s Unconnect IVI system, HondaLink’s and AcuraLink systems, Hyundai’s BlueLink system, Mazda’s MazdaConnect and MZD Connect, and Subaru’s StarLink. Acura’s and Honda’s telematics offerings use Microsoft’s Windows Azure cloud platform as well.

In addition, a number of telecom carriers are working with cloud service providers to offer end-to-end solutions that manage subscriptions and billing, user profiles, services and connectivity.

For example, Sprint is acting as a systems integrator with its Sprint Velocity cloud platform. Sprint Velocity incorporates a number of services into its cloud offering, including those from WirelessCar, which offers a range of services to automotive OEMs, though the solution, and related connectivity, it provides the back-end cloud service for Chrysler’s Uconnect system. Sprint works with a number of telematics service providers, including WirelessCar, Aeris and Airbiquity (for mobile device connectivity via Choreo).

AT&T has launched its Drive platform, which is designed to be an end-to-end telematics solution. Partners in AT&T’s initiative include Ericsson’s Connected Vehicle Cloud, which serves as a global application delivery framework; VoiceBox, for natural language voice recognition; Synchronoss, which provides a cloud platform for network activation; Accenture, for big data analytics and various connected vehicle services; Amdocs, which provides a billing solution; Jasper Wireless, which has its own global, cloud-based connected device platform; Qualcomm, for its Snapdragon Automotive Solutions processors; Red Bend Software, for managing over-the-air software updates to applications; and QuickPlay Media, which has a streaming video platform called OpenVideo.

Another example of a cloud service going into production is Covisint, which Hyundai is using to integrate Google Glass with the next generation of the automaker’s Blue Link platform that’s debuting on the 2015 Genesis sedan.

Pan-European eCall The European Union’s efforts to establish a pan-European emergency response system for vehicles has promised a major telematics market expansion in Europe for a number of years. The eCall system involves a device in vehicles that

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Inactive Telematics Subscriptions

including Jaguar Land Rover’s InControl Remote, BMW Assist, Mercedes-Benz emergency call, PSA’s Peugeot Connect and Volvo OnCall.

Beyond eCall, a number of other countries have emergency notification device mandates of some kind being implemented, including Russia with its ERA-GLONASS, and Brazil with its Contran SIMRAV mandate. In addition, the Transport Division of the United Nations Economic Commission for Europe is promoting a global framework for eCall systems, though the regions where this type of solution would have the most impact are developing countries with a combination of a growing number of vehicles on roads and a lack of infrastructure necessary to support such an initiative.

This effort is likely to focus on highlighting and sharing best practices and other relevant information for such types of emergency notification systems.

The large number of inactive telematics subscriptions globally is already an issue in the auto industry, as illustrated in this chart.

Inactive eCall devices will only make this situation, and the amount of revenue wasted, worse.

automatically calls 112 in the event of an accident to notify emergency responders and provide a ‘minimum data set’ (including GPS location, time, driving direction and vehicle description) via in-band modem signalling (the data is included in the voice call). The call can be initiated in the vehicle or on the network. The eCall device itself has an embedded 2G modem and SIM with a single mobile network operator (MNO) profile.

Despite the fact that legislation representing a compromise between the European Council and European Parliament was endorsed by the EU’s permanent members on March 19, the eCall mandate must still be approved by the Parliament (a vote was slated for April) and by the European Council (sometime after the vote in Parliament).

The recent EU member endorsement stated that “member states must have the infrastructure to handle eCalls in place at least six months before the type-approval requirements for the corresponding in-vehicle device start to apply and in any case no later than Oct. 1, 2017.” For automakers, however, the deadline to begin equipping vehicles with an eCall device is November 1, 2015, though the European Parliament left open the ability to postpone the deadline.

Recent revisions to the legislation’s text designed to protect vehicle owner privacy allow vehicle owners to turn off the eCall system. This revision and the unclear deadlines are limiting the mandate’s effect in the marketplace. The broader opportunity eCall represents, ubiquitous vehicle connectivity in Europe, could end up being squandered. The industry has long planned to use the eCall device to enable other locationbased services, such as electronic tolling, stolen vehicle tracking or usage-based insurance, but if consumers can simply turn the device off, neither these services, nor emergency notifications, will be possible.

It should be noted that automakers’ existing emergency notification services count as fulfilling the mandate, and a number of OEMs already have embedded systems in place,

Car Sharing ‘Car sharing’ refers to various forms of short-term rental and is a relatively new type of service initially enabled by smartphones but beginning to leverage connectivity. Some car-sharing programmes simply expedite short-term rental of vehicles by distributing vehicles across an urban area and allowing programme members to rent vehicles online and access them via a keypad or smartphone. Other programmes focus on peer-to-peer car sharing, where members can rent each other’s cars for short durations. Examples include Lyft and RelayRides. Zipcar, owned by Avis-Budget, and Hertz’s Hertz On Demand are examples of car-sharing programmes where the shared vehicles are part of a separate fleet owned and maintained by a larger company. ‘Short-term’ can be daily, hourly or by the minute, with charges accrued based on the company and model. In many cases, vehicles in carsharing programmes are equipped with aftermarket hardware (a GPS tracking device to determine the vehicle’s location when being picked up or dropped off) or leverage existing onboard telematics.

With respect to connectivity, RelayRides is working with GM’s OnStar to leverage GM vehicles’ embedded connections, specifically by allowing OnStar subscribers who have reserved a vehicle with RelayRides online to use their smartphone to gain keyless access to another participating RelayRides vehicle.

In Europe and North America, BMW’s DriveNow, operated with rental car partner Sixt, allows users to reserve a vehicle via smartphone and to check vehicle status, for example fuel or electric charge level, with the BMW ActiveE vehicles in the DriveNow fleet. Daimler has worked with Europcar to create the competing Car2Go programme, and a number of other OEMs have rolled out car-sharing programmes in Europe. Both Car2Go and DriveNow follow the pay-by-the minute approach.

As with any new business model in an established market, entrenched businesses, such as taxi fleet operators, are opposed to car sharing as they don’t face the same regulations and costs that other transportation companies do.

In addition, many U.S. states are seeking new regulations for car-sharing providers and programmes, for example California’s Public Utilities Commission, which has created a new definition for car-sharing providers, the ‘Transportation

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Network Company’. At this time government regulators, carsharing providers and various industry groups are developing the model under which these new businesses will operate.

Membership in car-sharing programmes is still small compared to the car-owning population in developed countries, but it is growing steadily.

V2X Technologies and Applications Advanced vehicle safety technologies, commonly described by the acronym ADAS (advanced driver assistance systems) are becoming more mainstream, with mass market vehicles (such as the Mazda3) featuring a range of safety systems, including rear cameras and sensors that enable driver alerts and semi-autonomous driving functions, for example adaptive cruise control and autonomous parking. V2X technologies today are being designed to extend the range of a vehicle’s sensors into the surrounding environment, providing non-lineof-sight awareness around the vehicle.

With connectivity becoming more available, there are opportunities to relay vehicle sensor information to other vehicles and surrounding infrastructure, though the auto industry is still a number of years from implementing V2X safety in any comprehensive manner.

Strategy Analytics has taken a scenario-based approach to determining revenues and shipments of V2X DSRC technologies. The first scenario, delayed implementation beginning in 2017, shows demand rising to only 760,000 units by 2010 (1% of global light vehicle production). A voluntary scenario, where OEMs decide to adopt these technologies on their own shows demand rising to 5.3 million units by 2020 (5% penetration), and a scenario where the U.S. government mandates some form of V2X technology with implementation beginning in 2017 points toward global demand rising to 18.8 million units by 2010 (16% penetration).

The Future: Driverless Cars Many OEMs are predicting the arrival of fully autonomous vehicles by some set date. General Motors has stated that autonomous vehicles “will become available” sometime this decade and Nissan has said it plans to sell autonomous vehicles by 2020. European marques, such as Audi and BMW, demonstrated more advanced autonomous parking at the 2014 International CES, and Volvo has successfully participated in a project that showed autonomous vehicle “platooning,” where a vehicle led a convoy of autonomous vehicles on public roads. More recently, Volvo used magnets embedded in a road surface to guide autonomous vehicles on its test grounds in Sweden.

Despite progress toward developing better autonomous vehicle systems, the auto industry must overcome major hurdles for autonomous vehicles to eventually see widespread adoption. Although various countries, such as the United States and Sweden, allow for autonomous vehicle testing, none currently have a regulatory framework in place that allows members of the general public to purchase an autonomous vehicle and operate it on public roads.

More autonomous vehicles on roads also raises numerous questions regarding liability (if an autonomous system leads to a collision, is the vehicle owner or automaker liable?), and challenges the notion of car ownership itself. When autonomous vehicles finally become prevalent, it may not make sense for individuals to own car cars and instead all autonomous vehicles will belong to companies that manage fleets of them. Over the long run, autonomous vehicle ubiquity will transform the entire auto industry, the businesses that support it and consumer relationships transportation in general. www.strategyanalytics.com

Strategy Analytics Strategy Analytics has been helping Global 500 companies chart prosperous routes through complex technology markets for over 40 years. We have built a singular reputation for providing timely, trusted deep dive market research based on subject expertise and proprietary analytics techniques. Our analysts specialise in tracking, analysing and forecasting markets that include: wireless devices, automotive electronics, consumer electronics, enterprise, entertainment and media, defence systems, telecommunications infrastructure, pricing and services.

Our focused M2M and Automotive teams are industry-recognised sources of global market infrastructure, device, competitive landscape and value chain insights. Our consulting group conducts custom research projects, applying the company's proprietary analytics and vast data resources to client engagements. We are the only analyst and research provider with an in-house user experience practice and digital home observatory.

Our clients include fixed and mobile operators, vehicle OEMs and their electronics suppliers, wireless device vendors, content providers, investment firms and regulatory authorities.

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COMPANY PROFILES

Company Summary

Key Differentiation

Gemalto is an international provider of digital security services for the telecommunications, banking and government markets as well as M2M connectivity hardware, software and services.

Gemalto offers ruggedised cellular connectivity modules for the automotive industry as well as an end-to-end platform for securely managing vehicle connectivity and related vehicle and owner information. The company views automotive connectivity as the mechanism for optimising the driver’s emotional connection to his or her vehicle, vehicle safety and vehicle operational efficiency rather than focusing on one aspect over another.

The company provides an end-to-end solution for automotive OEMs that want to provide connectivity services to their customers, enabled through Gemalto’s expertise in managing and securing digital connectivity in other major markets, including banking and government services. Overall, Gemalto provides automotive-grade modules that meet TS16949 quality standards, subscription management services, security consulting and analysis, service enablement and its Application Enablement Platform.

Company Credentials

Gemalto offers a broad portfolio of services, noting that although its competitors are specialists in different markets, none have the same type of end-to-end solution that the company offers. Despite this broad platform, Gemalto is focused on creating and securing all the elements in the connected automotive ecosystem, building what it calls a network of trusted partners. In addition, Gemalto wants to change the discussion of connectivity from that of providing access to infotainment content and services to that of enabling automotive OEMs to collect the data they need to make their vehicles more ecologically performant, improve safety and optimise their efficient use throughout the modern, increasingly multi-modal transportation system.

Gemalto recently announced its partnership with Volkswagen’s luxury brand, Audi, and is providing its Cinterion modules to the automaker as part of the roll-out of 4G LTE connectivity for its Audi connect platform. Gemalto is also providing digital security consulting to leading European OEMs.

Competitive Pressures

Company Summary

Key Differentiation

Telit offers an extensive portfolio of high quality cellular, shortrange, and positioning (GNSS) modules, available in over 80 countries. It also offers Software as a Service (SaaS)structured value added services from m2mAIR and comprehensive solutions for module, SIM (subscriber identity module), and subscription management. Telit provides customer support and design-in assistance from its sales and support offices, global distributor network of wireless experts and 30+ accredited Competence Centres.

Telit provides a comprehensive product portfolio, an excellent value proposition, commercial flexibility and great technical support. It also claims unrivalled continuity of business, focusing exclusively on M2M since 2002. Since then it has never been bankrupt or changed ownership and has maintained a constant offering with huge commitment on products and form factors. For example, it acquired Motorola’s M2M business three years ago and continues to offer their entire range of devices.

Company Credentials

Competitive Pressures

Telit provides a one-stop-shop for M2M. This encompasses all relevant device technologies including GSM through LTE, CDMA though EV-DO, Wireless M-Bus, ZigBee, proprietary mesh and many more. This is supported by the m2mAIR cloud platform (created from acquisitions of GlobalConnect, CrossBridge Solutions and ILS Technologies) and mobile connectivity through a strategic arrangement with Telefonica.

Telit has outpaced major competitors courtesy of technology and business innovations such as the ball-grid-array (BGA) module, backward compatibility through the “Family” and “Unified-Form-Factor” concepts, and superior technical support.

Telit sees the concept of IoE/IoT (Internet of Everything / Things) becoming much more universal, although it expects steady growth rather than revolutions and ‘killer apps’. Telit clearly sees a huge opportunity in automotive: In December 2013 it signed an agreement to acquire NXP’s automotive module business, pending regulatory approvals. Telit anticipates that a few of the laggards in the module industry will fall away, leaving a small number of expert firms plus the challenge from Asian vendors.

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Company Summary

Company Credentials

Wyless provides end-to-end secure global managed services to the auto industry. The company’s resilient network and management platform, Porthos, is delivered in partnership with over 19 of the world’s largest network operators, giving coverage in over 150 countries. Wyless builds products and provides professional services that enable auto industry customers to more easily deploy embedded cellular products and services across the globe. The company’s professional services include hardware procurement, supply chain management, logistics / lifecycle and asset management, as well as white-labeled customer support and billing solutions.

Wyless also provide API support that allows the data from the vehicle to be linked directly into back-end management systems. Wyless’ dedicated customer support teams are on hand to answer calls 24/7/365, with emergency technicians on call at all times too. If ever things should go wrong, Wyless works to have its customers back up and running as fast as possible. Wyless promises to continuously strive to stay the best at what it can do.

Wyless’ recent acquisition of ASPIDER has opened up a whole new business area, which you can read about in the expert interview by Michel Zwijnenberg, VP ASPIDER M2M, in this edition of M2M Now

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Key Differentiation Wyless believes that its complete global managed services offering is a significant differentiator to an automotive company that is shipping their products across the globe and wants to ensure that they have visibility and can collect data on the vehicles performance in real-time. Couple this with Wyless’ professional services and customer support around the clock and you have a market-leading proposition.

Competitive Pressures Wyless is seeing a continuing trend toward Usage Based Insurance (UBI), in-vehicle cameras and other in-vehicle, which use significant amounts of data. This means you need a multidomestic strategy to meet these requirements. That is where Wyless is focusing its attention.

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AUTOMOTIVE M2M

A typical OBU that incorporates the ATOP integrated component, which measures 33 x 33 x 3mm

COMPANY INSIGHT:

Automotive to be top M2M growth sector Recognising the great growth potential of automotive M2M, Telit has created a new business unit to better address connected vehicle business opportunities.

Dominikus Hierl describes the reasons for the change.

Dominikus Hierl, CEO, Telit Automotive Solutions

The recent acquisition of NXP’s Automotive Onboard Platform (ATOP) expands Telit’s OEM (original equipment manufacturer) offer. The new business unit (BU), Telit Automotive Solutions, PAYD: Pay-As-You-Drive unifies the resources of the two companies and SVT: Stolen Vehicle this will result in an accelerated drive towards Tracking market leadership in this segment.

ATOP is an integrated, certified component that has all the functionality needed to create standalone On-Board Units (OBUs) for road

pricing, eCall, and other certified or authenticated services and applications. On the software side there is an open, multi-application development environment based on IBM’s J9 virtual machine, which can execute JAVA code. In a nutshell, it's an impressive single-component turnkey solution having tight hardware and software integration.

Easy in-car integration is enabled by a broad range of interfaces, which include CAN and USB, multiple serial inter-processor buses, A/D and

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D/A converters, and analogue in and outputs for audio signals.

In addition, ATOP can be employed as a front-end to more advanced, open-service telematics platforms. These are key features, particularly for up-market brands including German premium car OEMs. Automotive is one of Telit’s key markets. We not only develop modules specifically for this industry, but the company also ensures the highest quality standards are observed from research and development (R&D) to manufacturing and logistics. To guarantee total adherence to these quality standards we have a dedicated team spanning R&D, sales and support.

This dedicated team focuses on different phases of development. One group is focused on field testing and software validation. Another handles ‘Reliability Validation’; a third group offers first and second level technical support; and a fourth group has the sole responsibility of ensuring that all ‘interactions’ among different functions inside our company including R&D, purchasing, quality, test engineering, and others take place efficiently and expeditiously.

Complementary capabilities Solutions based on dedicated automotive modules will continue to be the preferred option for many vehicle manufacturers and we shall continue to develop the existing product line, for example the GE910-AUTO, HE920, LE920 and UE910-AUTO. The responsibility for these products will be moved into the new company and additional R&D resources will be assigned to future automotive products. The acquisition of ATOP should, therefore, be seen as a complementary addition to our comprehensive product portfolio.

can also access the laboratories in order to obtain additional help with technical issues and compliance testing.

A huge market with enormous potential It is hard to exaggerate the potential of vehicle telematics: over 60 million vehicles were manufactured in 2012. Take-up of telematics solutions is very low, which means that there is a huge untapped market. This situation will change and government legislation is a key motivator. There is the ERAGLONASS initiative in Russia, Contran 245 in Brazil and e-Call in Europe, which should be mandatory in most countries by 2015. These are positive developments that Telit has tracked and, as indicated earlier, we already have the requisite products. Moreover, our portfolio has been extended and expanded via the acquisition of NXP’s ATOP platform.

The word ‘expanded’ was italicised to emphasise the fact that this next-generation platform enables the development of consolidated solutions. This topic was considered in the 2013 edition of our telit2market magazine. The article anticipated the emergence of low-cost but more sophisticated platforms that will allow the hardware and the related data plans to be shared with the various telematics solutions. ATOP has the requisite functionality.

The open, multi-application software environment ensures interoperability and secure co-existence in systems that run multiple telematics applications in parallel. The ARM7 environment, which uses C/C++, complements the IBM J9 environment with low-level, true real-time capabilities for application integration.

Synergistic relationships

A powerful package

Telit has been active in the automotive market for several years and in that time we have acquired a vast knowledge base as well as a considerable amount of operational experience of this industry. In addition, we have the global reach as well as the various support services needed to facilitate the marketing and deployment of ATOP-centric solutions.

The ATOP platform packs all the functionality needed to create standalone On-Board Units. Key features include: GNSS (GPS) and GSM / GPRS communication; device and vehicle connectivity via CAN, USB, and NFC; transaction security and authentication mechanisms; secure, over-the-air software and applications upgrades; and multi-service capable and multi-App concept.

Back in 2009 Telit created dedicated sales and support teams that could function locally and at the same time be managed on a regional and global basis by senior Telit specialists. I was responsible for automotive. Telit Automotive Solutions employs the same model. It operates in a global ecosystem comprising a direct sales force that operates out of 35 offices around the world plus a distribution channel that has 60 specialists in more than 80 countries. These value-added distributors have detailed local knowledge and expertise.

Everything is aggregated. In this way Telit is not only close to its customers, it becomes an integral part of their marketing operation.

Key benefits include: single-component, turnkey telematics solution with reference design; optimised cost, form-factor, incar connectivity, and power consumption; three-processor architecture for compliance with automotive standards, GSM, security, and service certifications; open, flexible framework based on standard software; built-in, banking-grade security functions and ultra-small footprint.

Research and development Market leadership cannot be realised without making significant investments, but more is needed in today’s ultracompetitive market. Application Engineers are also involved.

Different technical representatives are assigned to ensure that projects are completed quickly, efficiently, and successfully with the shortest time-to-market. This is also the group within Telit serving as the interface between customers and R&D. They co-ordinate activities with hardware and software engineers to speed up the integration process, and customers

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There is a lot to like about this package and it is set to play a pivotal role in the open, multi-service telematics solutions that will provide us with applications such as eCall, SVT, PAYD, and fleet management. ATOP can also function as an in-car client for smart grid based e-cars and pooled car applications.

Conclusions Telit is an established supplier of automotive-grade modules, but given the size of the market and its potential, Telit decided that a dedicated business unit would allow the company to better address all those opportunities. This focused approach would also facilitate the execution of our strategy, which is to become the market leader in the automotive segment by 2015. The acquisition of ATOP should therefore be seen as a significant step towards the realisation of that objective.

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AUTOMOTIVE M2M

CONNECTED CARS AT MWC 2014:

Making M2M a servant not a spy Up to 15,000 delegates at Mobile World Congress visited the GSMA’s largest ever Connected City in 2014, up from 8,000 delegates in 2013. Visitor growth even out-stripped expansion of the Congress as a whole – itself up to 75,000 visitors from 72,000 last year. As Jeremy Cowan found, connected vehicles were again of particular interest.

Carlos Morales, Telefonica

Jeff Chu, ARM

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On the subject of connected cars, Parker pointed to the transfer to automotive of technologies from seemingly unrelated industries. There was a demonstration by a team of basketball players wearing washable sensors sewn into their shirt collars to monitor their heart rates and stress levels. “It starts with professionals,” said Parker, “then develops for enthusiasts’ smartphones, but the same monitoring technology can be put in a steering wheel to collect data on drivers’ wellbeing.”

In-vehicle connectivity in the much-praised Tesla Model S electric car is provided by Telefonica Digital. During a guided tour of its offering, the

Carlos Morales Paulin, Telefonica Digital’s Global M2M, Cloud and Apps director said: “The Tesla that a customer buys is different from their car in three to four months’ time. For example, until recently Tesla’s automatic gearboxes had no ‘creep’ mode.” If you left them in ‘Drive’ they were stationary, unlike traditional automatic gearboxes which creep forwards unless the driver applied the brake.

Tesla vehicles have now been automatically updated over-the-air (OTA), and the cars alerted their drivers to this new function. Other OTA upgrades have included satellite navigation in additional languages and an Rdio media browser.

A new version is released every two months.

The connectivity package is bundled with the car, and four years of Telefonica service is included in the vehicle price. “We’re in 23 countries directly today and more through our connection partners.

Our devices will soon connect to any car made since 2004, plugging into the OBD2 port in your car (Telefonica Digital’s new service launches in Germany in Q2 2014. Ed), and our app will give you all the data on your car when you leave it, including location. You can set up ‘geofencing’ ▼

The GSMA’s Andrew Parker, project marketing director for Connected Living, was able to quantify the spread of connected devices. He said that a Machina Research study commissioned by the GSMA showed there were 195 million connected M2M devices worldwide in 2013. This total, he said, would rise to 250 million in 2014, a compound annual growth rate of 38%.

Questioned by M2M Now on revenues, he said the GSMA will add ARPUs (average revenues per user) to their study next year.

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“IoT can be scary for people when they think that there will be sensors monitoring them. So privacy issues are huge.”

Jeff Chu, ARM with an alert if your car leaves the area, and it gives you full diagnosis of your car’s health, or data on your trips,” said Paulin.

“This is the first M2M business-to-consumer (B2C) product from Telefonica. We started with a pure connectivity offer, then we built platforms where clients can manage their own devices in real time, changing tariff, and also offering a data analysis package. We call it Horizontal Play, and it doesn’t matter which industry we’re talking about. We’re capturing end-to-end services. Connectivity has a low ARPU, but with in-car video downloads the ARPU will go up. But it also impacts on our network.”

The automotive market is being spurred on by numerous applications; emergency calls, navigation, entertainment, driver communications, and dealer support for the vehicle. A key technology here is MirrorLink. Japanese mobile network operators are among the first to launch MirrorLink-certified handsets for fast, secure in-car smartphone access. RealVNC's MirrorLink™ certified technology, VNC® Automotive, has been used by Japanese IT equipment manufacturer, Fujitsu, to launch its first MirrorLink-certified Android mobile devices.

On its stand, RealVNC demonstrated how multiple devices could be connected – any device to any device – in a single vehicle, which MirrorLink itself does not do. This Sony phone uses ML1.0 based on RealVNC and Sony licenses it from us. “On the car’s built-in screen I can play movies,” said Tom Blackie, VP Mobile of RealVNC, “or using the touch screen bring up maps.

I can also send different videos to both rear screens. It’s full frame rate, or they can play games with no latency.

Crowd-sourced data

Product Management Automotive & M2M/IoE. We’ve modified Android to create two zones, for the driver and the back seats. The system enables navigation in the front with a directional overlay on a forward-looking video, while the kids watch a movie in the rear.

How close is this system to market? Aside from Qualcomm and QNX’s development speed, said Duggal, “different phone manufacturers react at different speeds. It could be in vehicles in early 2016; we’re helping auto makers to bring down development cycles to five years. Automotive is good business already, it’s not just projects.”

The automotive sector is already good business for RacoWireless. John Horn, its president told M2M Now that is company has been chosen to support the new line-up of 4G LTE connected vehicles in the Audi connect® programme.

Audi and AT&T are to provide the first-to-market 4G LTE connected car in the US with the new Audi A3, coming to market this spring.

A global provider of wireless data solutions to the M2M industry, RacoWireless will provide connectivity management, including 24/7/365 call centre support.

“The momentum that we have been able to build with RacoWireless as a partner has been tremendous,” said Anupam Malhotra, senior manager, Connected Vehicles, Audi of America.

The new Audi A3 models will feature an advanced platform and suite of services allowing motorists and passengers access to real-time information, voice navigation, and WiFi connectivity for up to eight devices using 4G LTE technology.

“We’re unique in being able to connect multiple phones or streaming three or four videos simultaneously. And if a driver warning light comes on it connects automatically through the cloud to the dealership, who may see what the problem is. Or crowd-sourced data of ice being experienced by cars ahead can be sent to other users of that app,” Blackie explained.

“We are thrilled to continue our relationship with Audi of America,” said Horn. “Working with AT&T to bring this solution to market will only augment Audi’s position as the clear leader in the connected car space.”

Fujitsu is the latest mobile phone vendor to utilise VNC Automotive technology to offer its mobile network operator customers car-ready technology. Six MirrorLink-certified handsets are now available on major Japanese mobile networks. "The release of these devices heralds the start of a flood of MirrorLink certified, production-ready technology, particularly in Asia and the Far East," said Blackie.

While many in the automotive M2M space are rightly concerned with connectivity and services, one person M2M Now spoke to is looking slightly further down the road, at managing the data generated in these services and ensuring user privacy. Jeff Chu, ARM’s director of Segment Marketing, Client Computing, said: “IoT can be scary for people when they think that there will be sensors measuring and monitoring them. So privacy issues are huge – it’s about who can access the data.

VNC Automotive is said to allow safe and secure control of a mobile device from a vehicle head unit or infotainment system. This gives drivers in-car access to their smartphone content, including GPS navigation, music libraries and internet radio. These mobile devices can be directly and safely controlled from a vehicle’s touch screen infotainment system, from dashboard control buttons, steering wheel-mounted controls, or even by voice command.

RealVNC licenses out the technology and then earns a longterm royalty per head unit. They supply it as a software development kit to in-car head unit makers such as Clarion, Denzo, HTC, Sony, Panasonic and now Fujitsu. The company expects up to 3 million vehicles globally to use their technology in 2014, with 5-10 million users in 2015.

Qualcomm is partnering with QNX for GNSS navigation and an LTE modem supported by its Snapdragon 602A applications processor. From switch-on the system takes 0.5 seconds to enable, full audio is in 2 seconds and the full bootup for gaming and movies in the rear takes 8 seconds. “We’re looking to get that lower,” said Nakul Duggal, Qualcomm’s VP,

M2M Now

‘M2M can be scary’

“Take UBI (usage-based insurance), for example, the data can lower your insurance premium. But the same data can be passed to the city to manage traffic flows, or the authorities can know where you’ve been. We need, as an industry, not to over-regulate but to put guidelines around how data should be used. A step beyond that is defining how a service can access data so that it’s common to all data providers for maximum value,” he added.

“At ARM we want to be open and let everyone play. We’ve been working with the US Federal Trade Commission to set data privacy rules, and in Brussels (at the EU) it’s happening too. We need to define (usage) so that we can secure people’s data. Here at MWC 2014 we have a demo on how we access data over a 3G network using protocols based on Open Standards to drive packet sizes down. You don’t want a $100 board at every node,” said Chu. For more on connected vehicles see our Insight Report on Automotive M2M (pages 15-35).

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AUTOMOTIVE M2M

COMPANY INSIGHT:

Driverless cars are among the possibilities for the car of the future

Driving the connected car to a world of new mobility Connected car technology is revolutionising the automotive industry and transforming our wireless lifestyles into a world of new mobility. From four-wheeled mobile offices to driverless cars and even windshields with integrated Google Glass, the possibilities to enhance transportation and improve our way of life are endless.

The author is Lars Thyroff, VP Automotive Segment, Global Head of Automotive Line of Business at Gemalto M2M

The Magic Triangle: Zero emissions, zero fatalities and enhanced driving pleasure!

Global automakers are focused on eliminating emissions and reducing crash fatalities while enhancing driving pleasure. Sometimes referred to as the ‘magic triangle’ of automotive innovation, carmakers carefully consider three core topics when making design and engineering updates: • Ecology – reducing carbon emissions that can negatively impact the environment • Safety – producing safer vehicles that protect against crash fatalities • Emotion – providing drivers with a 1

sophisticated vehicle that is fun to drive To meet the demands of today’s savvy car buyers as well as regulatory benchmarks for safety and emission control, automakers continuously strive to reach ever higher goals in these three critical areas. For instance, manufacturers are constantly utilising stronger and more lightweight components to increase passenger safety and vehicle durability with decreased weight to improve fuel efficiency and battery consumption economy. In addition, secure embedded connectivity is at the heart of a new breed of connected car applications that are helping carmakers meet their ambitious goals of enhancing the emotional connection to the vehicle while achieving zero emissions and zero fatalities.

A valued partner in automotive connectivity As the global leader in digital security and automotive M2M technology, Gemalto has long been a valued partner to tier one car manufacturers and OEMs, service providers, governments as well as road and transportation operators. In addition, the company’s participation in creating industry standards ▼

Industry experts and analysts agree that the industry’s growth potential is enormous with estimates reaching as high as 90% of all vehicles being connected by 20201. Along with the exciting opportunity to expand our mobility comes new challenges, including security concerns and the risk of increased distracted driving that have some people wondering, “Why connect vehicles at all?” A deeper delve into motivators in the automotive industry provides some answers.

Telefonica, https://m2m.telefonica.com/m2m-media/m2m-downloads/detail/doc_details/530-connected-car-report-2013

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M2M Now

and its membership in standardisation bodies including ETSI (the European Telecommunications Standards Institute), VDA (Germany’s leading European automotive standards organisation), ERTICO (Europe's Intelligent Transportation System (ITS) organisation) and many more, delivers unrivalled insight and marketplace intelligence to get connected car projects off the ground.

Gemalto’s market-proven technology provides a ‘virtuous circle’ of competence around next generation connected vehicle applications, delivering innovative solutions across the entire automotive M2M ecosystem. Carmakers, MNOs and integrators leverage Gemalto’s portfolio of award-winning Cinterion® Automotive M2M Modules to provide a variety of global connectivity solutions while embedded auto-grade MIM and related services authenticate, encrypt and safeguard connectivity and communications. Gemalto’s array of solutions, platforms and services completes this circle of positive feedback and comprises secure authentication technology, security consulting, payment systems, trusted infrastructure and On-Demand Provisioning services help to enable reliable connectivity for automotive applications and the connected mobility world of tomorrow.

Infotainment Infotainment solutions, such as the Gemalto-powered, first to market embedded LTE Audi connect infotainment solution introduced last year, have captured the public’s imagination and attention for their ability to add convenience and improved communications to our daily lives. But 3D navigation, WiFi hotspot capabilities and mobile movie screening are only the tip of the iceberg in terms of the value of connected car technology.

Intelligent powertrain and navigation Telematics applications that manage engine operations and service updates are not new to the automotive industry.

However, next generation connected powertrain solutions take this technology a step further by leveraging data in real time from a multitude of embedded sensors to automatically control and optimise engine efficiency, energy usage and fuel economy while reducing CO2 emissions.

Advanced connected car applications combine data from the intelligent powertrain, navigation systems, car cameras, smart road applications and even other cars through upcoming carto-car (C2C) and vehicle-to-x (V2X) communication to alert drivers in advance when hazardous road conditions or traffic congestion is expected. Gemalto-enabled systems can automatically provide optimised trip management to avoid hazards and delays; and in some cases, they may even suggest public transportation as the best option.

Advanced driver assistance services and autonomous driving Recent tradeshows put a spotlight on futuristic self-driving and self-parking vehicles leaving some people feeling skeptical about turning over control to a machine. In reality, these solutions are used more like an advanced cruise control system versus a replacement for a driver. For instance, when traffic jams are unavoidable, drivers won’t have to endure hours of stressful stop and go traffic because autonomous driving systems will take over and navigate through the worst of it. The solutions improve the driving experience as well as

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fuel economy and they can help navigate through potential crash scenarios and even improve outcomes when accidents occur.

Car sharing and fleet management: an integral part of the intermodal transportation of the future Flexible car sharing services are growing in popularity, especially in urban areas where owning your own vehicle provides more obstacles than solutions. In a next generation car sharing scenario, a person looking for a car initiates the process by opening a smartphone app and requesting a vehicle. The driver selects a car from a list provided and immediately receives walking or public transportation directions to the vehicle. As he makes his way, he receives a text message indicating that a digital car key has been securely sent to his phone. When he arrives at the vehicle, he simply taps the smartphone near the windshield to authenticate identity and open the doors. Another tap authorises ignition.

In route to his destination, the driver receives an audio alert that a recent accident has caused a road closure. The smart car recommends an adjusted route, which includes taking public transportation to an alternate shared vehicle parked on the other side of town. The driver accepts the new route and when leaving the vehicle, the smart key is disabled. He then receives a text message and an electronic ticket code for his train trip. Simultaneously, the smart car solution sends car sharing data including distance travelled, driver ID and billing information to the car sharing enterprise. Gemalto technology can simplify and enhance the customer experience all along the way and, most importantly, enable trust.

Facilitating a network of trusted partners New mobility services, from car sharing to autonomous driving solutions, are providing flexibility to meet individual transportation needs while overcoming the challenges presented by quick growing urban environments and environmental pressures. These systems require close collaboration from a wide range of diverse players including public and private transportation providers, car makers and car sharing service providers. This complex ecosystem can only operate successfully within a network of trusted partners that can deliver a seamless experience for the end user.

Gemalto’s Trusted Service Management platform and Near Field Communications (NFC) technology provides the elements required to integrate all the partners and components together for a seamlessly connected whole experience. Trusted Service Manager provides a secure digital environment where relevant data from all ecosystem players is handled securely and stored in a secure element, e.g. on the end user’s mobile phone.

Today, we are only scratching the surface of the power of the connected car revolution to improve our way of living, expand our safety and security, enhance our driving experience, and provide new revenue streams. Gemalto’s wide range of connectivity solutions and services supports a trusted network of partners that does more than just enable connected car technology – it delivers increased safety, improved ecological performance and a more enjoyable driving experience in the smart mobility world of tomorrow.

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BIG DATA

Driving toward the near future with Big Data The entire ecosystem of the automobile industry – from manufacturers to drivers, including dealers, service centres and mobile content providers – are benefiting from big data. Here, Yves de Montcheuil of Talend invites us to go for a ride toward the (very) near future.

The author is Yves de Montcheuil, VP of Marketing at Talend, specialists in open source integration. Yves holds a master’s degree in electrical engineering and computer science and has 20 years of experience in software product management, product marketing and corporate marketing. @ydemontcheuil

There are several goals to these programmes: usage analysis, fuel efficiency and carbon emissions, safety, vehicle performance and maintenance management. These programmes are shaping the new reality of the automobile of the 21st century, as a new car buyer (let’s call him William), will experience in his day-to-day life – maybe as soon as tomorrow.

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New car search William just decided to get a new car. He begins his search on the web, chatting with friends on social networks, reading comparisons and reviews published online by the trade press and clicking on targeted banner ads. Before long, his Inbox begins to fill with messages inviting him to test out the latest models from different manufacturers.

At the dealer As William pulls into his chosen dealership, he gets a text message offering a promotional discount on the model that caught his attention the day before. He has barely set a foot outside

▼

Whether in the design and construction processes, in use or maintenance, big data has crept into the lifecycle of the automobile. Several manufacturers, including Ford and Volvo, have launched large scale analytical programmes to leverage the millions of data points generated by multiple sensors now integrated in their vehicles.

May 2014

BIG DATA William’s driving preferences can be sent to the cloud and used in loan or rental vehicles

his car when a salesman comes to greet him: not only does he already know that William is coming in today, he knows what model he is interested in and has several offers lined up for him.

William doesn’t need long to make his decision. Along the way, let’s note that this model was designed based on user feedback, data collected by the sensors of previous generation vehicles, as well as feedback from dealers (What is popular or unappealing? What is needed and expected?).

Changing patterns of use were also taken into account and the findings were refined based on the analysis of several different types of data, including performance data from Grand Prix races and test benches published by trade journals.

William is particularly interested by the latest navigation system included in the car, which not only tracks the travel time of other motorists to avoid traffic jams, but also to avoid accident-prone areas, and optimise fuel consumption (and therefore carbon emissions). William’s decision is further helped by the custom financing terms, including insurance, offered by the dealer.

On delivery Once the vehicle is delivered, William’s first impulse is to programme his driver preferences: adjustment and programming of the mirrors, height of the seat and steering wheel, temperature and favourite radio stations. This data is transmitted to the cloud instantly and can be used in other vehicles (loan or rental).

He also configures his mailbox (to check messages in voice mode) and his favourite routes on the navigation system. This also enables him to locate the cheapest petrol station on his route, based on his destination and actual fuel efficiency.

In the car William decides to take a road-trip, but at times it is a bit long and monotonous. He did not sleep much the night before. His eyes begin to close intermittently and as time goes on he becomes careless in maintaining safe distances from the vehicles ahead. An alarm sounds and a friendly voice advises him to take a break.

His driving behaviour is being analysed in real time and compared with the average behaviour of motorists. Eyes that close, a body that is slouching in the seat, and swaying or rocking movements of the head are all warning signs of drowsiness.

William decides to stop for a coffee. If he had not, the car could replace him in the event of imminent danger, or simply stop at the next parking lot or rest stop.

Leafing through the preventive maintenance manual of his vehicle, William learns that maintenance, previously based on the distance travelled, is now personalised based on the information collected by multiple sensors (brake wear and tear, engine speed, fluid pressures, etc.). A detailed analysis of this data (compared to data from other drivers and the

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description of breakdowns or repairs handled by dealers examed by the manufacturer’s data scientists) establishes the best timing for maintenance.

As the car is connected, all this data is sent to the cloud to feed statistical models and send alerts to the driver if a potential anomaly is detected. In addition, data links now allow vehicles to communicate with each other to detect any possible problems in advance (safe driving distance, car breakdown around a bend, traffic jam ahead, etc.).

These are some examples of the value-added benefits William enjoys due to data analysis. By studying the driving style and taking into account the entire lifecycle of the vehicle, manufacturers are able to send useful information that will improve the driving experience. In turn, they can maintain privileged relationships with the customer that foster brand loyalty.

Future services Many other services are currently under development: Ultrafast repairs and maintenance, biometric door lock control, tracking in the event of theft (and immobilisation of the vehicle), sending targeted and location-based promotional messages via the radio, weather and natural disaster alerts, adaptation of insurance rates based on driver behaviour, autopilot, custom music programmes, tour guides, mobile payment, and so on.

Beyond their business core, manufacturers today are forming a true network of service providers, for which data is the fuel.

Aside from the goal of preserving their sales and margins, some car manufacturers are completely reinventing their business thanks to big data.

Each and every customer will benefit from increased security, improved maintenance, enhanced driving comfort and ultimately will enjoy an innovative and ground-breaking user experience.

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BIG DATA

COMPANY INSIGHT:

Welcome the global connected car with a networkagnostic SIM Michel Zwijnenberg, ASPIDER’s vice-president M2M

Michel Zwijnenberg, ASPIDER’s vice-president M2M, talks to Saverio Romeo, principal analyst at Beecham Research about the future of connected cars.

ASPIDER M2M believes that this is a radical move that will enable new business models and innovation in the Internet of Things (IoT).

ASPIDER M2M also believes that the connected car market and automatic meter reading market will be the first segments to benefit from this change.

M2M Now asked Saverio Romeo of Beecham Research to talk to Michel Zwijnenberg, ASPIDER vice-president M2M, about the evolution of the connected car market, the impact of the new Dutch regulation, and the role of ASPIDER M2M in the market.

Saverio Romeo: Can you provide an overview on ASPIDER M2M and its offering?

Michel Zwijnenberg: Since 1st April, 2014, ASPIDER M2M is part of Wyless. Before that date ASPIDER M2M was part of ASPIDER Solutions.

ASPIDER Solutions, with headquarters in The Netherlands, is a well known international MVNE. ASPIDER M2M operates 550,000 active M2M SIMs with local partnerships with large international mobile operators. ASPIDER M2M is legally considered a mobile network operator, in fact, the company has its own MNC, a core mobile network and OSS/BSS system. The company also has roaming agreements with 400 operators in almost all the countries in the world.

All this gives ASPIDER M2M a strong degree of flexibility and enables the Dutch company to customise network-agnostic solutions based on the customer needs. The combination of the ASPIDER roaming SIM and Wyless Local SIMS in 19 countries has further increased the global coverage and the flexibility of the offer. ▼

The author is Saverio Romeo of Beecham Research

The Netherlands is among the most advanced and dynamic M2M markets globally. Recently, the Dutch telecommunications regulatory authorities issued a directive that will animate the debate in the M2M and the IoT industry. Two shared MNCs for private usage are now available in the Netherlands. Therefore, groups of companies and organisations can use those MNCs independently from mobile network operators.

IN ASSOCIATION WITH ASPIDER 34

March 2014

BIG DATA

Key ASPIDER M2M customers are in control of their own connectivity through solutions such as Multi IMSI, owned MNC, or subscription management.

Romeo: Which are the most active sectors for ASPIDER? Zwijnenberg: Our customer base is diverse in size and vertical areas of operations. Large Dutch multinational companies use our solutions. Philips is one of those using our solution for lighting solutions, and Stedin for smart metering projects. We collaborate with OEMs and international companies.

At the end of 2013, we also launched a solution specifically tailored for small and medium enterprises. In terms of sectors, we have several projects in energy, security, retail, healthcare and transport. We strongly believe that transport, and in particular, connected cars is an area with great opportunities.

Romeo: What is your opinion of the current status of the connected car market?

Zwijnenberg: Innovative legislation such as the eCall, and the increasing diffusion of broadband technologies and digital culture among drivers, have opened the doors of cars to the M2M/IoT industry. Today, there is a new range of service and applications opportunities such as remote maintenance, preventive call-back to the dealer, usage based insurance, incar internet services and information and analytics for car manufacturers to improve their products. In order to fully exploit the benefits of all these, the car manufacturers need to be in control and this control has to be at multi-country level because of production locations, and the user using the car in multiple countries.

Romeo: How do car manufacturers take that control?

Zwijnenberg: ASPIDER M2M believes that car manufacturers need to: • control the gateway into the car, similarly with the residential gateway into smart home environments; • bill the customer or user; • be able to set which party can offer which services through this gateway; • be in control of the security, uptime and pricing of the connectivity; • be in control of which operator is used and when; • be in control of the SIM and its specification and • be able to control the SIM supply chain.

This ensemble of activities can be quite complex for car manufacturers. However, being in control of the connectivity is a strong starting point.

Romeo: Which is the best approach for car manufacturers for being in control of the connectivity?

Zwijnenberg: For a car manufacturer, using an operator SIM with a bundle is not the right approach. An alternative to that is subscription management. This solution has its value, but it is not scalable for mass deployments. Instead, ASPIDER M2M believes that having its own MNC is the right approach for gaining full control on the connectivity and, consequently, a strong degree of flexibility.

ASPIDER M2M believes that car manufacturers should control the SIM and its specification

Romeo: The newly issued Dutch regulation could be a good answer. What do you think?

Zwijnenberg: We believe that making an MNC code available for private use is a significant step in the right direction.

ASPIDER M2M proposes to fully exploit the new Dutch regulation. A possible approach could look like: • A neutral party hosts the MNC that has been made available for private company use.

• Private companies can become members (e.g. the whole set-up could be in a charity).

• Participating companies get the ownership of a sub-range of this MNC. However, the SIM has an application that enables them to move to their own MNC, if they are able to have one in the future.

• Each private company gets their own HLR. • The neutral host proxies the HLR messaging to the private company HLR. • Close collaboration with some existing roaming hubs would be required.

Romeo: How can ASPIDER M2M benefit from the new regulation?

Zwijnenberg: ASPIDER M2M is perfectly in line with the new Dutch regulation. We want to give to our customers control of their machine-to-machine connectivity and we already have experience of that in the utility and public lighting sector.

Generally, we believe that we are very well suited to exploit the Dutch regulation regarding the assignments of MNCs, but also the recently approved regulations at EU level on roaming charges and net neutrality.

“We want to give to our customers control of their M2M connectivity.”

Michel Zwijnenberg, ASPIDER

M2M Now

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OPINION SPONSORED COLUMN

CIOs and CMOs get intimate At a recent international conference for Global CMOs, much was debated about the increasing interdependence between chief marketing and information officers (CMOs and CIOs). Nobody was ready to say that the two functions would merge, or hazard a guess at which would survive if they did merge, but the one thing all agreed on was that these functions will continue raising their intimacy levels in several dimensions with the rapid rise of big data analysis and marketing automation for the enterprise.

The author is Alexander Bufalino, chief marketing officer, Telit Wireless Solutions

The C-Suite of the new enterprise is abuzz with new management possibilities afforded by big data.

CMOs can now stand in boardrooms the world over and show results from campaigns updating in real time on the screen as the presentation unfolds. Similarly, they can demonstrate real and present threats from competitors and play ‘what if’ scenarios with senior management, tapping into real-time data and analysis tools not available as little as a year ago.

data elements to repositories of the massive M2M cloud building the Internet of Things (IoT).

The playbook for the new C-Suite is now rewritten in real time. And with every iteration more variables are taken into account both from structured and unstructured data. At the edge, there is a network of devices charged with gathering, pre-processing, and delivering different

The race is on for system integrators and original equipment manufacturers (OEMs) to connect everything to the cloud. Telit’s ONE STOP. ONE SHOP. is and will remain the model delivery system in this race, simplifying the connection between the edge and the IoT.

The real business value of the IoT is quickly becoming tangible and measurable. Many of the product and service brands we are buying today come from companies who confessed to relying irreversibly on big data and marketing automation and have, in fact, already built these new processes into their management procedures.

AUTOMOTIVE M2M

“These are the two areas in the auto industry that have not changed in 100 years.”

Steve Millstein, Aeris

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Aeris’ automotive M2M team says it is tackling ‘areas nobody wants to confront’ According to Aeris Communications’ Steve Millstein there are automotive M2M issues that ‘nobody wants to confront’, nobody except Aeris it seems.

Jeremy Cowan gets the lowdown.

M2M Now: Steve, how successful is the connected auto segment today? Is it delivering value to all of the constituents?

Steve Millstein, Aeris: No, the success is marginal and the present value it delivers to the automobile industry is virtually non-existent.

I have been working at Aeris for the past couple of years developing our connected vehicle strategy and implementation in areas I call the ‘dirty little secrets’, areas that everybody in the industry knows, but nobody wants to confront. I mean, look at it. Car companies put hardware in cars and after the free period, let’s say that’s one year, the renewal rates are somewhere between single digits and 30% if they’re lucky.

That clearly shows the consumers are voting with their dollars and the business model doesn’t make sense, either to drivers, or to the car companies.

M2M Now: What is it about the offering that doesn’t make sense?

SM: To illustrate it, a vending machine for Coca-Cola® may be connected but it’s not connected to become a profit centre, it’s connected to do what they do better. To manage the temperature of the sodas in the machine, and so that the types of sodas are what the consumers expect.

This even benefits on the expense side. Perhaps you can repair the machine over-the-air, without sending a technician out, which is cheaper and faster.

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We are bringing that same approach to the connected vehicle space. In our business model, we have eliminated the need for consumer subscriptions. We can keep a car ‘lighted’ from the time it is built, even

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What that means is that now the car companies are able to unleash the true value of vehicle connectivity, just as that Coca-Cola® machine did. That is, fundamentally changing the way you sell and you service cars.

These are the two areas in the auto industry that have not changed in a hundred years. They changed the composites in the car, the manufacturing, the electronics, but they haven’t changed the way they sell and service.

You still have to bring a car back into the dealership when you shouldn’t have to. And the industry still don’t know who buys their cars; not only the first owner, but the second owner. We change all that. A car staying lighted forever gives them the ability to stay in touch with their product and with their consumer, for the life of the vehicle.

Our platform allows for that uniformity globally. And if Acura wants to know the performance of an Acura anywhere in the world, they can just put some parameters in like, ‘Give me a 2012 Acura, one that is between 10,000 and 15,000 miles and show me all of them that have engine control failures.’ That’s something GM could have used in their recent problems.

We have the software on the device, we have our purposebuilt network, our global services platform, and then we have our cloud technology. It does two things. It allows for the applications for automotive to be built, or in whatever vertical.

For example, we have built and are operating the ability for a car to connect directly to 112 – as required in Europe – or in our case to 911 without going through a costly third party call centre.

Those applications along with the remote services, the door unlock, the theft recovery, they all reside and were built costeffectively and rapidly on our cloud technology.

M2M Now: What experience does Aeris bring to the connected auto space?

M2M Now: Are there any other trends that might change the connected auto landscape?

SM: We have an engineering team that looks at problems creatively and develops solutions. The car companies that we provide services to today represent 25% of the car sales in North America; including brands like Honda, Acura, and Hyundai to name a few.

SM: Not many. The real interest in vehicle connectivity – except for BMW who I think understands it – comes from government mandates; the eCall initiative in Europe; a similar one in Russia; stolen vehicle requirements in Brazil. Even in North America, where it’s not a government mandate, there’s a belief that (auto makers) have to have it to be competitive.

We have four elements of technology that make machines work better. Those are some software that goes into the device, to make it programmable and mitigates the risk that it will be obsolete. You can’t have devices that need people going to them all to time. If that machine is part of the power grid out in the hinterland you can’t send somebody out there.

If it’s a car, you don’t want to recall it and replace the hardware.

So part of our technology starts with the device itself.

Then we combine that device with our network which is made for machines. We ‘lease spectrum’ from MNOs. We connect to their towers and base stations and then it’s our network.

It’s built for machines under that same theory that a machine has to get an SMS message at noon, if it’s expecting that. The service has to be the best available.

It has to be more secure, as ours is, because it’s built just for machines, so that they can’t talk to each other. Machines just talk to who they’re supposed to.

The third thing we add is our global services platform that we use to manage devices. Carriers struggle with that in their networks today, because they are focused on consumer handsets.

Aeris GSP, our global services platform allows you to connect with your devices or your cars wherever they are in the world.

Turn them on or off, irrespective of what country they’re in.

We provide services in 190 countries. Think about it, if a car company had to negotiate with all those carriers, then have a different way of activating each car, a different way of reporting and billing.

Nobody says that the consumers are demanding it. Say, for arguments sake, that of all the vehicles that are equipped, 25% stay lighted after the free period. Of that 25%, no more than 20% will subscribe to the back seat services, the infotainment, the streaming audio, the things that car companies are spending a lot of money on. So only 5% of consumers, best case, are buying the infotainment services. They’re voting with their dollar.

I don’t see a lot of plans that are really changing the face of vehicle connectivity. We will.

M2M Now: When consumers are making this choice, how should they be enticed?

SM: We believe it should be turned from revenue generating to a way of doing business, going back to the Coke® machine.

I believe that the car companies should keep their cars lighted forever; no subscription from the driver, for the diagnostic data about the car. That database is used in their ecosystem and it will have a big impact. It’s knowledge they’ve never had before.

The front seat services – the safety and security, the door unlock, the theft recovery – could be priced on a pay per use or with our technology and business model, they could be provided at no additional charge. Services should just be made available because the consumer gave you US$30,000 for a car. The car should alert the appropriate authorities when there has been an accident. I don’t believe there should be a charge for that. In our business model it comes free.

The back seat services are part of the consumer’s lifestyle and

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before it leaves the factory, to the time it is crushed, with no fixed monthly costs to the OEM, the automobile manufacturer, or to the consumer.

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Steve Millstein is responsible for directing and managing the Aeris automotive practice. He led ATX Group from 1996 until its acquisition by Cross Country Automotive Services in 2008. Steve has also held numerous positions at Southwestern Bell and AT&T, including vicepresident of their wireless subsidiary. He holds a Bachelor of Arts and Sciences degree in political science from the University of Kansas and a J.D. from Washburn University.

the job of the car companies is to seamlessly and at no cost, use the smartphone that the driver brought into the car. If you wanted to have a concierge service you could add one on top, at a subscription of so much per year. But we have Yelp on our phone and apps that allow us to find that nearby restaurant.

world. That may not be possible today; it will be soon. But even when you have a global piece of hardware, you still need a services platform like ours, or you’re activating it differently in every country. Your reports are different, your billing is different. By definition that means the big boys are going to have a competitive advantage.

People may say, ‘Well wait a minute, how do I make money doing that?’ One, we have a way you can make money, but even if consumers don’t buy everything we’re saying, when we modelled it you lose less money doing what I’ve just said than they’re losing today.

M2M Now: And what about the rest?

M2M Now: Is your business model entirely focused on the car companies?

SM: My group is focused on the automotive side, but the greater Aeris offering is for horizontal M2M services. We just work with a device that is embedded in the car, to deliver services to the car companies and the drivers.

M2M Now: Industry hype seems to be focusing on the value being in delivering entertainment.

SM: There are industry players that are hyping that, and it ignores the market realities. In my unscientific survey of my three children they’ve said, “No, I don’t have that (entertainment package) on my car. I want to use the speakers to play my own music, but I don’t need somebody telling me where to go eat.”

The closest company to our business model is BMW. In North America at least, BMW keeps the car lighted for 10 years, and they are connecting for getting data out. They do provide a suite of services to the consumers for that period of time.

The car companies need to build back office infrastructure to use this data. It’s kind of a hen and an egg; the car companies don’t have systems and applications waiting to connect to the cars, to make value and use of this data, because they’ve never had the data.

If vehicle connectivity is only available on the top brands and only 10% keep it lighted because of the subscription model, you’re not going to change the way you sell and service cars. You have to have all cars available to send that before it’s going to be worth changing. That’s the problem.

M2M Now: Steve, only the largest mobile network operators are talking publicly about connected auto. Why is that?

SM: Well, you have to have a global reach, as we do. The car companies are looking at it, primarily because of government mandates. Should they expand their connected vehicle strategies? Car companies would love to have a device that has one SIM card in it that works anywhere in the

SM: The rest will have to be comfortable having a car roaming permanently on their network, making money for doing nothing. The MNO in France may not be the one negotiating with the car company. But if you think about it, the car company isn’t going to want to negotiate with 190 wireless carriers – or more than that, because you want to have more than one in every market.

You have to rely on somebody to do that heavy lifting for you. That French carrier is going to be happy just having cars using data on their network. That’s where they make their money anyway. You need to have a global reach. You have to understand lead times in the automotive industry. It’s much different than consumer electronics; what consumer electronics companies do in three months it takes a car company three years.

The consumers will stand for re-booting a tablet, they won’t stand for re-booting their car.

Consumer expectations are different. The economics are different.

That’s one of the good things about Aeris. Since we were built for machines, our entire network and back office infrastructure was built for an ARPU (average revenue per user) of a couple of dollars, not a hundred dollars. Our economics are so much superior to MNOs’ because ours was built with the understanding that we’re not going to be getting $100 a month, we’re going to get $1 a month for a device.

M2M Now: And how long has Aeris been in the automotive space?

SM: We have been doing this for about 20 years, and in the last year we doubled the number of subscribers. We launched billing for three automotive programmes last year. We completed our automotive vertical applications, the theft recovery, the door unlock, the automatic collision notification going directly to the government’s emergency centres.

We’ve rolled out GSM and LTE, in addition to the CDMA services. We’ve expanded our footprint to global from just the North American market.

We’ve opened up additional data centres globally, and sales and engineering offices in India and Europe. It’s a testament to the growth in M2M, and a recognition of Aeris as a player.

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