Accenture Auto Infotainment Online Version

8/11/2019 Accenture Auto Infotainment Online Version

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Perspectives on In-VehicleInfotainment Systems andTelematics

How will they figure in consumersvehicle buying decisions?


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What are the most important trendsshaping mobility around the worldand in the automotive industry? Andhow can automotive manufacturers

position themselves now to profitfrom these trends, particularly aroundin-vehicle infotainment (IVI) systems,telematics, and embedded software?

Accenture recently concluded severalstudies to address these questionsand provide insights into how IVIand telematics systems can be usedto improve competitive positions inthe coming years. We define IVI as aset of solutions and applications forvehicles that address various customer

priorities, such as entertainment,safety, maintenance, communication,and navigation. This paper summarizeskey findings of the research.

The most important trends that willimpact automotive manufacturers inthe areas of IVI and telematics overthe next 20 years include these:

Urbanization:By 2015, 40 percentof the worlds people will live incities with populations of more than1 million and 17 percent will live in

megacities with more than 5 million.Drivers will need in-vehicle systemsto help them more readily navigatecongested roadways, and will usetheir cars as information centers thatcan recommend and direct them torestaurants and other destinations.

Climate impact and policy: Anadditional 1.9 million tons of carbondioxide will be emitted annually indeveloping countries thanks to therise in individual ownership, assuming

there are no changes in global policy.This trend will likely accelerate theadoption of electric vehicles, throughgovernment subsidies for the vehiclesthemselves and through developmentof charging infrastructure.

To be sure, cars will still be thedominant form of transportationfor individual passengers. Thestrongest regions for growth will

come from emerging markets,including China, India, and Russia.These regions will account for 50percent of new car sales, comparedwith todays 30 percent. Therewill also be growth in two- andthree-wheel vehicles, along with anincrease in bus and rail capacity.

Key trends shaping the automotivelandscape


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Revenuem/$

$70,000

60,000

50,000

40,000

30,000

20,000

10,000

Despite recent slowersales, growth is expectedto remain strong

2003 2004 2006 2008 2010 2012

0

$7,773

$24,862

$38,177+17%

Sources: Strategy Analytics, Frost & Sullivan, ABI Research, IDC, Telematics ResearchGroup: Chart created and compiled by Accenture, 2010.

Figure 1: US IVI/Telematics Systems Revenue Growth

PiecesMillions

45

40

35

25

20

15

10

OEM embedded solutionswill gain shares versusPN devices

2005 2006 2010 2011 2012 2013

0

30

5

200920082007

OEM In-Vehicle NavigationPortable Navigation Device (PND)

-3.1%CAGR

11.7%CAGR


Figure 2: Shift to Original Equipment Manufacturer (OEM)In-Vehicle Navigation Solutions

IVI/Telematics market is expected to exceed US$70 billion in 2012 globally and US$80billion in 2014

Revenuem/$

$70,000

60,000

50,000

40,000

30,000

20,000

10,000

Speed-up expectedin next years

2003 2004 2006 2008 2010 2012

0

$26,400+18%


Electronics will be main cost component of the vehicle (40%)

Other

Interior

Body &Exterior

Powertrain

Electronics &

In-VehicleServices

2000 2010 2020

22

32

20

15

11

3140


Figure 3: EU IVI/Telematics Systems Revenue Growth Figure 4: Electronics & In-Vehicle Service Share (in %)


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Accenture studies have found, IVIpenetration is very low in vehicles atmedium and low price points. Thesesystems will grow among all segments

in the near future, and will reachalmost complete penetration for luxuryand other high-priced vehicles.

The cost of IVI systems and theiravailability at the time of car purchaserepresent key concerns for buyers inGermany, Italy, and the United States.Few customers choose to add in-vehicle technologies to their currentvehicle. There were notable differencesamong the three countries as well.Italians have a stronger preferencethan Germans and Americans for info-mobility and communication services,and a weaker emphasis on safety.

Our study across countries foundthree main trends that will directlycontribute to the growth of IVI andtelematics systems: eco-efficiency,security and safety, and comfort.Demand for these characteristicswill spur innovation and growth ina number of automotive segments:

Energy-efficient drive trains:Alternative engines: Alternative fuels,electric, hybrids; optimization anddownsizing; vertical innovations.

Energy re-use: Brake-energy andexhaust gas/heat.

Eco-efficient bodies and chassis:Body: Improved aerodynamics, newmaterials (bionic, composite materials,self healing). Chassis design concepts,steering (x-by wire electronicsteering and suspension), braking(electromechanical brake).

Security and safety: Active driverassistance system, passive security,predictive and remote diagnostics.

Security: tracking, access control(keyless), predictive and remotefailure diagnostics.

Comfort: Connection: Vehicle tovehicle; vehicle to infrastructure;broadband, satellite, sensors.Hardware: Pods and plexes; newdisplay technologies, processingpower, bus system. Software: Interiorpersonalization, integrated trackingmanagement systems, automated

toll and payment, next-generationlocation-based service and navigation,Internet and multimedia.

Its not just IVI systems that will

improve through innovation; globalinfrastructure will also change in waysthat benefit IVI and telematics.

Traffic flow optimization and controlequipment: With rising ownership ofpersonal vehicles comes rising trafficdensity. More road systems will featureintelligent, connected traffic-flowand traffic-control systems tomitigate congestion.

Energy recharging and ref illinginfrastructure: As more cars runon energy sources other than fossilfuel, countries will need to developelectric recharging and range extenderstations. In addition, alternative fuelsources (synthetic, biomass, hydrogen,and so on) will need to be producedand distributed. Microsoft Hohm, forinstance, a new energy efficiencywebsite, could help owners determinewhen and how to most efficiently andaffordably recharge electric vehiclesand plug-in hybrid vehicles.

Key trends impacting IVI systems


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Over the next decade, our researchshows that the in-vehicle servicesthat will drive market growth includesecurity, multimedia, safety, and

navigation services.

It makes sense that these areas willdominate in the near future. After all,consumers have been exposed to thesetechnologies for only the past decade,yet they are increasingly connectedelectronically through email, socialnetworks, and smart phone messaging.Some forecasts call for one-quarterof the worlds population to beconnected to the Internet by 2012.The expectation of being connected

anywhere and anytime suggests strongdemand growth for IVI.

Although prices for both hardwareand software will decline withincreased competition in the area,massive unit growth will more thanmake up the difference.

The functionalities that will see thebiggest rise in uptake are:

Security: GMs OnStar is one such

roadside assistance service. In theEuropean Union countries, eCall isa project intended to provide rapidassistance to drivers involved in anaccident anywhere in that region.

Connected multimedia: Consumerswill demand in-car entertainment at arelatively low price, including mobilebroadband connectivity.

Safety: Consumer demand andregulations will promote active driver

security technology. As the use oftraditional methods of interacting withtheir mobile devices (keyboard, touchscreen), present a safety hazard, theadoption of hands-free communicationwill increase. Voice recognition, text-to-speech, and Bluetooth are someof the technologies that will continue

to be highly beneficial to IVI systems.These technologies will also need to berefined and improved for the consumerto have a truly connected experience

in the vehicle.

Navigation: The rapid spread ofsmart phones is already threateningthe market for navigation devices,and could encroach on in-vehiclenavigation. As a consequence, IVIsystems will need to add navigationenhancements such as live traffic andparking updates.

For the interior in-vehicle servicesegment, innovations in sensor

detection, interconnection, and driverinterface technology will enablegrowth opportunities.

Growth trends of in-vehicle services

2014 Scope: Globaldata in $ billions (**)

Key evolution points:

Core solutions, driven by OEMs, will increasedue technology evolution and will gain sharesversus portable devices (*)

Services area will be the one with higherCAGR (*) also driven by new segments asconnectivity (car to car and car toinfrastructure) and mobile marketing

Evolution at global level including APAC (*)

Market potential includes systems, solutionand services and does not include connectivity

Services Info-mobility services, navigation Communication /connectivity Back-end hardware /softwareinfrastructure

Accessories Portable devices(navigation, audio, etc.) Portable interfaces

Core solutions On-board units, embeddeddevices including mechanics,hardware and software

2012 Scope: Globaldata in $ billions (*)

80

20

22

38

(*) Sources: Strategy Analytics, Frost and Sullivan, TRG,Berg Insight

(**) Compiled by Accenture Analysis, 2010

70

17

23

30

Figure 5: Market potential analysisServices market will grow up to $20 billion in 2014


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In the near future, Accenture studiesfound, the next wave of enhancedand connected in-vehicle serviceswill not provide one killer application,

but multiple big-ticket services.In the future the open platformwill allow access to several newopportunities and consumers will beable to download the applicationsthey need and want directly from theirvehicle. We see major trends for bothembedded and standalone in-vehiclesolutions. Automotive manufacturerswill need to catch up with other typesof companies that compete in thesemarkets. Although most automotivemanufacturers have capabilities in

the area of info-mobility, such asnavigation, few have fully developedcommerce capabilities. And they havebeen slow to create new generationsof IVI applications in areas such assafety, commerce, communicationand entertainment.

In the European IVI marketplace,Accenture found that, BMW andMercedes represent the biggestplayers, while Toyota and Volkswagen

are expected to grow rapidly in thenext few years. In North America,Ford is viewed as a market leader,with the Ford Sync and Ford myTouchIVI devices generating a good deal offavorable buzz.

Demand for IVI and telematics isaccelerating, as the Accenture studiesmake clear. Car manufacturers havean opportunity now to ramp up theircapabilities in this area, in order toachieve competitive differentiation.

They and their suppliers need to startbuilding strategic partnerships thatwill lead to distinctive capabilities.To speed the process, some maywant to take a managed approachto IVI, allowing them fast entry intokey areas. The three areas that meritgreatest consideration are safety, eco-efficiency, and entertainment.

Positioning to capture IVI demand growth


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Accenture has deep experiencein the automotive industry and aproven track record in the area ofembedded software, combined withunparalleled expertise in systems

integration and technology consulting.This combination allows us to helpOEMs and Tier One suppliers betterunderstand customer requirementsand plan a program to release newtechnology as soon as possible withthe highest impact for the end-user.Accenture also serves the IVI andtelematics markets globally, as theyenter the next phase of growth.

Our global footprint provides bothscalability to meet any challenge and

proximity to clients in key geographies.And our flexible engagement modelsallow clients to structure risk andreward appropriately.

For automotive clients, the benefits ofworking with Accenture include:

Improved ROI on R&D spend

Increased revenue and margins

Faster and more predictable productlaunches and ramp up and increasedspeed to market

Product and application differentiation

Access to technology expertise

Accelerated global productdevelopment design efficiency andimproved product development processes

Global knowledge and experiencewith local presence

Reduction in time and costs in testing

End-to-end service

How Accenture can help


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To find out more about theimplications of Accentures studies onmobility in the automotive industryand perspectives on growth,please contact:

Accenture GlobalMarcello [email protected]

Accenture North AmericaSean M. [email protected]

Copyright 2012 AccentureAll rights reserved.

Accenture, its logo, andHigh Performance Deliveredare trademarks of Accenture.

About AccentureAccenture is a global managementconsulting, technology servicesand outsourcing company, withmore than 244,000 people servingclients in more than 120 countries.Combining unparalleled experience,comprehensive capabilities across allindustries and business functions,and extensive research on the worldsmost successful companies, Accenturecollaborates with clients to helpthem become high-performancebusinesses and governments. Thecompany generated net revenuesof US$25.5 billion for the fiscal

year ended Aug. 31, 2011. Its homepage is www.accenture.com.

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