Connected Cars: What is the Impact on Radio? · Insight: In terms of daily in-car use, streaming music services and portable owned music have overtaken AM/FM radio in China. In Western

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Connected Cars: What is the Impact on Radio?

Roger C. Lanctot Director, Automotive Connected Mobility

WHAT WE NEED TO KNOW

• State of automotive connectivity

• Value of automotive infotainment

• Impact of Google, Android, Apple (Amazon?)

• Emerging role of digital assistants

• Driver monitoring – potential game changer

• Audience measurement on steroids

• Car as browser

• Latest Strategy Analytics China in-vehicle listening research

2

OEM EMBEDDED TELEMATICS

CELLULAR MODEM SHIPMENTS - GLOBAL

August 28, 2019 Source: Infotainment & Telematics Service 3

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Un

its (

00

0's

)

2.5G 3G 4G/LTE 5G

Telematics Forecast 2017 vs. 2025 (31 Mil. units 84 Mil. units)

• 2.5G Network: 3.5 Mil units in 2017 to 0K units from 2020

• 3G Network: 18.8 Mil in 2017 units to 3.8 Mil units in 2025

• 4G/LTE Network: 9.6 Million units in 2017 to 67 Mil units in 2025

• 5G Network: 12.5 Million units in 2025

OEM EMBEDDED TELEMATICS

ACTIVE VEHICLE SUBSCRIPTIONS BY REGION


Leading Regions:

• North America: Market Driver - Single Market

• Europe: Market Driver – eCall

• China: Market Driver – Biggest Global Car market

Global Active Subscriptions Will Exceed 250 Million by 2022

Telematics 1.0

Telematics 2.0

OEM INFOTAINMENT:

REGIONAL SHIPMENT REVENUES


Tier 1 Revenue Growth: 2017 vs. 2025: +17.7% ($33.5 Bil. to $41.8 Bil.)

• China +42.6%: From $7.5 Billion in 2017 $10.8 Billion in 2025 (CAGR 4.5%)

• North America +4.4%: From $7.7 Billion in 2017 $8.1 Billion in 2025 (CAGR 0.5%)

• Europe +7.6%: From $10.1 Billion in 2017 $10.9 Billion in 2025 (CAGR 0.9%)

• Japan -2.1%: From $3.28 Billion in 2017 $3.21 Billion in 2025 (CAGR -0.3%)

• India: +75%: From $795 Million in 2017 to $1.4 Billion in 2025 (CAGR 7.3%)

• Brazil: +35.8%: From $1.1Billion in 2017 to $1.4 Billion in 2025 (CAGR 3.9%)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Reven

ues (

Mil

US

$)

North America Europe South Korea

Japan China India

Russia Brazil Rest Of the World

BEING CONNECTED….

SMARTPHONE/GATEWAY CONNECTIONS


* e.g. UVO, Entune, MyLink, etc.

…But…Limited Control of the IVI Environment!

*

Consumer Interest is High

0

20,000

40,000

60,000

80,000

100,000

120,000

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Un

its

(00

0’s

)

Carplay Android Auto MirrorLink Proprietary/Other Vehicle Sales

CARPLAY, ANDROID AUTO UX’S

7

Old Apple CarPlay New Apple CarPlay

Old Android Auto New Android Auto

CHANGING OF THE OS GUARD – PEAK QNX

8

DIGITAL ASSISTANTS FOR THE CAR - CHINA

Confidential and Proprietary 9

DIGITAL ASSISTANTS & AI

MARKET TRENDS


Source: Amazon

Voice-based digital assistants are rapidly bringing limited types of AI to our cars and our homes. • Amazon Alexa-enabled devices, such as the Echo smart speaker

(pictured at right) are selling in large volumes.

• Strategy Analytics’ Smart Speaker service estimates that full-year (2017) shipments reached 32 million units in the U.S., France, Germany, and China.

• That figure is up more than 300% year-on-year.

• Google and Amazon accounted for 9 out of every 10 smart speakers sold during that period.

OEMS’ INFOTAINMENT AI PARTNERSHIPS


OEM Digital Assistant Status

Audi Alibaba’s Tmall Genie, PIA Tmall Genie – Launch TBD PIA – Concept demonstration

BMW/MINI Amazon Alexa, Microsoft’s Cortana, BMW Intelligent Personal Assistant

Alexa – Launched (BMW Connected mobile app integration), launching in MINI cars, this year Cortana – Demonstrated BMW Intelligent Personal Assistant – To launch March, 2019

Ford Amazon Alexa Launched

Honda HANA, proprietary assistant developed in partnership with SoftBank

Concept demonstration

Hyundai Amazon Alexa, Google Assistant Both launched

Mercedes Google Assistant, Amazon Alexa, Tmall Genie, SoundHound

Google Assistant, Amazon Alexa launched April 2017 SoundHound to launch

Nissan Microsoft’s Cortana Planned, launch date not yet announced

PSA SoundHound Launch planned for 2020

SEAT Amazon Alexa Launched in select models in 2017, coming to more models this year

Toyota/Lexus Amazon Alexa, YUI Alexa coming to Entune 3.0 and Lexus Enform 2.0 App Suites this year YUI was a concept demonstration

Volkswagen Amazon Alexa Planned, launch date not yet announced

Volvo Alibaba’s Tmall Genie Planned, launch date not yet announced

DIGITAL ASSISTANTS

CHALLENGES

• Automakers must determine if and how users should manage multiple digital assistants accessible via the infotainment system

• Should users be able to choose a single assistant? • Should users be able to switch between

assistants?

• If switching is allowed, what HMI is used? Wake-up word? Via a menu accessible via touchscreen?

• Automakers will need to communicate which digital assistants can control which in-vehicle systems

• Can Alexa, for example, control HVAC functions, or is that the role of a proprietary assistant?

• Is there a seamless hand-off from one assistant to the other when the user makes a request that one assistant can’t handle?

• Are dealership salespeople trained to explain these features? If not, what does the OEM provide to new-car buyers to explain how these assistants work?


Source: Ford

What’s really at stake?

13

Sep 2018 Copyright© Strategy Analytics 2018 14

GUARDIAN OP-TECH

15

DRIVER MONITORING A US/EU FOCUS – ASIA?

• Driver attention

• Driver identity

• Vehicle occupancy

• Driver/passenger physical characteristics – airbag deployment protocols

• “Forgotten baby”

• Mood detection

• Audience measurement?

January 2019 Copyright© Strategy Analytics 2019 16

DRIVER MONITORING @ CES

• Many, many solutions on display… • Core function remains safety

• Range of additional functions ever-expanding:

• Biometrics

• Emotions (Affectiva solutions seen on many stands, e.g. Ambarella, Toyota Boshuku)

• Head/gaze-tracking for e-mirror

• Although in the short-term there are component opportunities in processing boxes for DMS, we believe in the med/long-term it will be up-integrated into another module, e.g. cockpit domain controller or ADAS domain controller


DRIVER MONITORING FORECAST

• Camera-based solutions forecast to deploy rapidly starting around now

• Legislative / NCAP interest in US and Europe • Europe NCAP for driver

monitoring

• US potential legislation for occupants left in hot vehicles


PEERING INTO THE BLACK HOLE OF IN-VEHICLE LISTENING

19

TUNERS HOLDING THEIR OWN IN THE U.S.

20

ANSWERING Q’S FOR CAR MAKERS, BROADCASTERS, ADV’RS

21

THE CAR IS A BROWSER

22

Intent Attribution

Audience Measurement

2019

INFOTAINMENT

REPORT:

NEW ADVANCES

FOR STREAMING

June 2019

Derek Viita

+1 617 614 0772

[email protected]

mailto:[email protected]

https://twitter.com/derekviita

https://www.linkedin.com/in/derek-viita-3246964

EXECUTIVE SUMMARY

• Strategy Analytics undertook a worldwide internet-based survey to investigate car owners’ usage of, and interest in, audio infotainment sources.

• A total of 4,790 car owners across the US, UK, France, Germany, Italy, and China were surveyed

• As AM/FM radio usage declines, streaming radio appears to be the heir apparent to owned and brought-in media in the car

• Streaming media usage has surpassed that of AM/FM radio usage in China, and has made remarkable gains in Western markets.

• In the US, an uptick in satellite radio usage was noted, especially among older demographics.

40%

7%

24%

29%

32%

33%

23%

31%

33%

25%

INFOTAINMENT SOURCE USAGE

STREAMING SOURCES SURPASS RADIO IN CHINA

Base US: 1517, Western Europe: 1721, China: 1552

AM/FM Radio

CD Player

Music from your own device

Streaming Music Service

Satellite Radio

Q: How often do you use each of the following features in your vehicle?

Daily Once/Twice Weekly

49%

15%

28%

30%

33%

37%

38%

37%

26%

12%

30%

30%

51%

47%

54%

52%

• At least 40% of car owners in Western

markets use AM/FM radio in the car daily,

with a further 33% using it once/twice weekly.

• Just 26% of car owners in China use

AM/FM radio in the car daily.

• At least 29% of car owners in each market

use streaming music services in the car daily.

• At least 24% of car owners in each market

listen to owned music from a portable device

in a car daily.

Insight: In terms of daily in-car use, streaming

music services and portable owned music have

overtaken AM/FM radio in China. In Western

markets, AM/FM radio is still the most-used in-car

source, though in the US, satellite radio and

streaming music are relatively close behind.


MORE GAINS FOR DIGITAL MEDIA IN CHINA

Base China: Overall (2019) – 1552


2014 2015 2016 2017 2018 2019

AM/FM Radio

CD Player



33%

20%

27%

13%

36%

34%

40%

21%

35%

22%

30%

20%

37%

35%

41%

27%

26%

15%

18%

14%

50%

50%

55%

46%

26%

12%

24%

18%

48%

44%

51%

45%

25%

10%

25%

19%

47%

40%

51%

44%

26%

12%

30%

30%

51%

47%

54%

52%

Over time


In China from 2018 to 2019…

• …daily usage of AM/FM radio rose 1

percentage point, and weekly usage rose 4

points.

• Both usage rates have largely held

steady since 2016.

• …daily usage of streaming music in the car

rose 11 percentage points, and weekly

usage rose 8 percentage points, both to 6-

year highs.

• …daily usage of owned music on a

portable device rose 5 percentage points,

and weekly usage rose 3 percentage

points.

Insight: Unlike Western markets, digital media

has fully saturated into regular use in the car in

China. Infotainment systems for China need to

be accordingly designed for these use cases.

27%

11%

30%

26%

54%

47%

56%

55%

25%

13%

21%

21%

52%

52%

56%

54%

26%

12%

30%

30%

51%

47%

54%

52%


ADOPTION OF STREAMING AND OWNED DIGITAL MEDIA IS MOSTLY AGE-AGNOSTIC IN CHINA

Base China: Overall – 1552, 18-24 – 254, 25-34 – 552, 35-44 – 518, 45-70 – 228

AM/FM Radio

CD Player



18 – 24 25 - 34 35 - 44 45 - 70 Overall

18%

12%

36%

32%

47%

37%

46%

48%

29%

14%

32%

35%

50%

50%

55%

51%



• In China, daily in-car usage of AM/FM radio is

highest in the 25-34 age group (29%).

• Daily usage of owned music on a portable

device peaks in the 18-24 age group (32%),

but is at least 30% among all age groups 44

and under.

• Daily usage of streaming music in the car peaks

in the 25-34 age group (35%), but is at least

26% for all age groups 44 and under.

• Weekly CD player usage is still relatively strong

in China, especially in the 25-70 age groups,

where it ranges from 47-52%.

Insight: Streaming and owned/brought-in media

for the car is now fully matured across age groups

in the China market. Daily use of those sources

exceeds that of AM/FM radio by 3-6 percentage

points in the 25-34 age group (prime car-buying

age in China), and by double-digit percentage

points in the 18-24 age group.


ROBUST WEEKLY USE OF DIGITAL MEDIA IN ALL TECH ADOPTION GROUPS IN CHINA

Base China: Overall – 1552, Early Adopter – 658, Early Majority – 692, Late Majority – 173, Laggard - *29

AM/FM Radio

CD Player



Overall Early Adopter

Early Majority

Late Majority


* Indicates low base <30

35%

19%

41%

42%

54%

56%

53%

50%

21%

7%

24%

20%

51%

41%

56%

58%

13%

6%

17%

15%

43%

33%

53%

38%

26%

12%

30%

30%

51%

47%

54%

52%

Tech Group

Note: Tech Group is based on selection of technology statement that best described them


• In China, Early Adopters are heavy “channel-flippers,”

reporting the highest daily usage of each

infotainment source. But the differences in daily

usage between Early Adopters and other tech

groups is most pronounced for digital media.

• Daily usage of owned portable media is 41%

for Early Adopters, and no more than 24% for

all others.

• Daily usage of streaming music is 42% for Early

Adopters, and no more than 20% for all

others.

Insight: As with respondents in Western markets, robust

weekly usage among all tech adoption groups in Europe

indicates that streaming media has appeal in all

demographics.

INTEREST IN INFOTAINMENT SOURCES

OWNED DIGITAL MUSIC AND AM/FM RADIO ARE NOW EQUALS IN CHINA

Base China (2019): CD Player, AM/FM Radio, Streaming Music Service, Hands-free calling, Music from own device, Smartphone App, Baidu CarLife – 1552 , Apple CarPlay – 405

AM/FM Radio

CD Player Music from Own Device


Apple CarPlay

Baidu CarLife

49%

51%

49%

53%

55%

62%

29%

32%

32%

41%

42%

51%

49%

46%

40%

42%

52%

57%

46%

40%

35%

33%

34%

32%

37%

39%

36%

35%

33%

28%

Hands Free Calling

61%

60%

2019

2018

2017

2016

2015

2014

Over time

Insight: In China, interest in streaming music as a “must-have” for the next vehicle purchase is about to overtake

AM/FM radio in importance, and owned digital music has now pulled even with AM/FM radio. Interest in

smartphone mirroring has levelled off, but remains robust. In the China market, given the strong usage and

interest in digital media as well as terrestrial radio, flat UI is imperative for the near future.

Q: “Must-have” features for next vehicle


AM/FM STILL A MUST-HAVE IN CHINA, BUT AGE TRENDS ARE MUTED

Base China: (Overall/18-24/25-34/35-44/45-70): CD Player, AM/FM Radio, Streaming Music Service, Hands-free calling, Baidu Carlife, Music from own device, Smartphone App – – (1552/254/552/518/228), Apple CarPlay – (405/94/164/105/42)

CD player

AM/FM Radio


Hands-free calling

Apple CarPlay

Baidu Carlife

Music from own device

29%

49%

46%

61%

37%

35%

49%

42%

42%

49%

36%

58%

59%

47%

29%

9%

5%

5%

6%

18 – 24 25 - 34 35 - 44 45 - 70 Overall

17%

36%

54%

65%

37%

36%

55%

47%

49%

41%

33%

59%

56%

40%

35%

15%

7%

5%

30%

51%

49%

65%

38%

39%

53%

44%

40%

47%

33%

55%

58%

44%

26%

9%

5%

6%

31%

50%

42%

57%

35%

33%

46%

39%

41%

54%

40%

62%

61%

50%

30%

8%

5%

6%

5%

35%

56%

40%

60%

36%

32%

44%

38%

37%

53%

37%

57%

58%

52%

27%

7%

7%

7%

10%

Must Have Interested Not Interested


• In China, interest in

AM/FM radio as a “must-

have” ranges from 36%

among 18-24 year-olds,

to 56% among 45-70

year-olds.

• Strong interest in access

to owned music peaks in

the 18-24 age group

(55%), but is at least 44%

among all age groups.

• Strong interest in

streaming music peaks in

the 18-24 age group

(54%), but is at least 40%

for all age group.

• 32-39% consider any

smartphone mirroring

system a “must-have,”

regardless of age group. Insight: In China, AM/FM radio remains a key “must-have,” though it does not have the same stranglehold on older

demographics as noted in Western markets.


STRONG INTEREST IN DIGITAL MEDIA ACROSS ALL TECH ADOPTION PROFILES IN CHINA

Base China: (Overall/ Early Adopter/Early Majority/Late Majority): CD Player, AM/FM Radio, Streaming Music Service, Hands-free calling, Baidu Carlife, Music from own device, Smartphone App – (1552/658/692/173), Apple CarPlay – (405/159/194/46)

Overall Early Adopter Early Majority Late Majority

29%

49%

46%

61%

37%

35%

49%

42%

42%

49%

36%

58%

59%

47%

29%

9%

5%

5%

6%

37%

56%

55%

69%

53%

42%

58%

46%

39%

43%

30%

43%

56%

40%

17%

5%

24%

47%

43%

59%

30%

32%

48%

36%

41%

52%

39%

64%

62%

49%

40%

12%

5%

5%

7%

17%

34%

25%

47%

13%

24%

28%

48%

51%

62%

45%

78%

60%

64%

35%

16%

13%

8%

9%

16%

9%

CD player

AM/FM Radio


Hands-free calling

Apple CarPlay

Baidu Carlife

Music from own device

Must Have Interested Not Interested

* Indicates low base <30

Tech Group

Note: Tech Group is based on selection of technology statement that best described them


• In China, Early Adopters show the

strongest interest in owned (58%) and

streaming (55%) music, though at least

25% of all other groups consider access to

owned or streaming music a “must-have.”

• Among Early Adopters, interest in CarPlay

is slightly higher than that of Baidu Carlife.

But in all other groups, interest in Carlife is

higher than that of CarPlay.

Insight: As with respondents in Western

markets, AM/FM radio remains a key “must-

have,” and interest in digital sources is robust

in all tech adoption groups (but especially

strong in Early Adopters).

IN-CAR VIDEO STREAMING

ANNOUNCEMENTS


• January 2016:

• FCA’s Uconnect Theater: Debuts in the 2017-MY Chrysler Pacifica. Alllows users to connect brought-in device to rear-seat, 10-inch displays.

• February 2017:

• Ford and SlingPlayer: Ford announces EVO in-vehicle SlingPlayer integration by VOXXHirschmann Corp. allowing viewing of home SlingBox content through mobile hotspot. Availability: 2018+ Ford Expedition/Lincoln Navigator full-size SUVs.

• August 2018:

• Tesla Video Streaming: Tesla CEO Elon Musk says in-vehicle video streaming coming in “Version 10” of car OS. No timeline given.

• January 2019:

• Audi Experience Ride: Audi showcases Audi Experience Ride augmented reality concept in collaboration with Disney, Holoride

• February 2019:

• Augmented Reality: AT&T, Ericsson, Intel & Warner Bros. showcase location-based 5G augmented reality concept at MWC19.

Source: Ford

Source: Audi


CURRENT SOLUTIONS


All current mainstream streaming solutions rely on brought-in devices:

Streaming Box + Mobile Data Plan

• Requirements:

o In-Vehicle AC inverter/outlet

o Data Connection (embedded or mobile hotspot)

o Data input (e.g. HDMI)

Data Usage

• Netflix: 300MB-4.7 GB/Hour (SD/HD)

• Hulu: 650 MB/Hour

• Amazon: 2GB/Hour (estimated)

“Unlimited” Car Data Plans

• Data Throttled after 22GB/Month

Source: Apple

Source: Netflix


FUTURE OUTLOOK


Front-Seat Video Streaming?

• Not likely until full regulatory approval of Level 4/5 autonomous vehicles. (Large-scale adoption not expected until 2030+. Source: Strategy Analytics)

Rear-Seat Video Streaming

• More an issue of software than hardware. Consumers more likely looking for brought-in projection solution than paying extra for integrated solution on up-front/ongoing basis.

• Challenges: Brought-in, downloaded videos on portable storage media (e.g. USB/SD)

5G as Enabling Technology

• Early 5G data plans significantly more expensive than 4G/LTE

• Hypothetical enablement of 4K, 8K video in vehicle

Source: Byton

Source: Porsche

VOLKSWAGEN

CONNECTIVITY


Vertical integration

• Cubic Telecom (Audi investment), WirelessCar (majority stake), Hybrid radio collaboration, Azure, Ford collaboration

Cross-brand strategy

• Porsche, Volkswagen, Audi, Seat, Skoda will all see vertical platform deployment

Infotainment emphasis

• Cubic – in-vehicle wireless connection management

• Radioplayer/Xperi etc. – hybrid radio will highlight cellular connectivity, digital radio metadata

• Azure – will focus on product life-cycle management, software updates

Google

• Implementation of Android coming soon – GAS a possibility

Source: Audi

Source: Porsche

CONCLUSIONS

• Infotainment systems in cars are big business

• Google wants a piece of the action

• Connectivity is all about customer retention

• Radio plays an essential role and remains dominant, though at risk

• We are on the cusp of realizing new audience measurement tools and tech

• Digital radio technology is the tool that is leveling the field of play – new content – new user experiences – more content

36

Documents

Connected Cars: What is the Impact on Radio? · Insight: In terms of daily in-car use, streaming music services and portable owned music have overtaken AM/FM radio in China. In Western