Cameras In, On, & Around the Car: Understanding & Sizing Market Opportunities

30 May 2014

Roger C. Lanctot – Associate Director, Global Automotive Practice rlanctot@strategyanalytics.com Strategy Analytics

Objectives

• Market Size and Segmentation

• Key Driving Applications

• Impact, Role of Connected Car

• Architecture Implications

Trends

• Commoditization of hardware

• Differentiation on HMI, software, services, content

• Changing ownership models

• Market maturity – volume from developing world

• Infotainment + Safety in developed markets

• Safety + Device integration in developing markets

• Modularity? Upgradability?

• On-board commerce

• Gesture-based, multimodal interfaces

• Thought control – biometrics

• Driver monitoring

Longer Term Outlook – Electronic System Demand

• Total demand to hit $288B by 2018. CAAGR of 7.3% over 2013 to 2018 (4.7% for vehicle production)

• Fastest growth in emerging regions, with India now showing the best prospects after poor 2013

4

Source: Strategy Analytics Apr 2014

Fragmentation vs. Convergence

• Multiple OSes Interoperability

• Multiple modules Single vehicle gateway

• Multiple handset connectivity propositions Proprietary platforms

• Multiple visions for monetization CRM/Safety grounded value proposition with all-purpose e-com platform

okay, okay – an in-vehicle app store

Enabling Technologies

• Split-SIM, carrier-agnostic telecom modules

• Virtual machines in head units and on processors – instrument cluster, infotainment system, safety systems – one processor

• Firmware over the air updates

• Hardware upgradability?

Give the People What They Want

Safety vs. Infotainment

Consumer Purchase Priorities

• 1200 consumers in US and 1200 in Western Europe rated importance of several factors in vehicle purchase.

• Safety features ranked higher on average than infotainment in both US and Western Europe

Consumer Interest in ADAS Compared to Connected Services (US)

• Both charts show % interested or very interested in feature.

• Interest in ADAS markedly higher than interest in connected services.

Coverage of ADAS

• Strategy Analytics’ Automotive Electronics Service provides regular system-level forecast updates for:

– Distance Warning / ACC

– Lane Departure Warning

– Blindspot Monitoring

– Park Assist

– Night Vision

– Head Up Displays

– Adaptive Front Lighting

– Driver Drowsiness

• Latest forecasts out to 2020 include – Unit & revenue forecasts

– Can split by region, vehicle type and automaker on request

• Data updated and re-published four times a year

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Coverage of ADAS

• Sensors covered in the analysis include: – Cameras

– LIDARs

– Ultrasonic

– Infra-red & Bolometers

– Short/Medium-range RADAR

– Long-range RADAR

• Semiconductors covered in the analysis include: – Processors (8, 16 and 32-bit)

– Power (Power ICs and audio amps)

– Memory (Flash, DRAM & Other)

– Linear (Op-Amp, ADC, DAC, Vreg, Bus Transceiver, Other Analog)

– ASIC (Analog, Digital & Mixed Signal)

– Opto (LEDs)

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Key Applications

• Self Parking

• Surround View

• Adaptive Cruise Control

• Lane Departure Warning

• Distance Alert

• Autonomous Driving

Why’s ADAS Growing so Fast?

• Governments continue to push for greater road safety – Strong push from EuroNCAP. Growing incentives from other NCAP authorities

• Automakers need new features

• Consumer interest is growing

• Prices are coming down – now typically in the $00s not $000s

Source: Volvo

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The “Ultimate” Question:

When will driverless cars be mainstream?

• Will a car that I can tell where to go and then snooze in the back seat to my destination have a significant market share by 2020?

NO! • Will the next car that I purchase offer a significantly greater

degree of autonomy than my current one?

YES!

Autonomous Vehicles: Move to Autonomy is Part of a Continuum

• Move to autonomous vehicles is already happening by continuous improvement, not a sudden jump 15

Auto Advance /Retard

Automatic Transmission

Auto-on Lamps

Rain Sensing Wipers

ACC

LDWS

Intelligent Park Assist

Blindspot Detection

Cyclist Detection

Night Vision

Brake Assist

Automatic Braking

Navigation

???

Adaptive High Beam

Traffic Jam Assist

Trend in Vehicle Segments and Sensors

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Assist Features

Full-size Mid-size Compact Small

ACC

AEB (Low-Speed)

AEB (Full-Speed)

Blind Spot Assist (rear, side)

Park Assist

Lane Control Assist/Warning

Pedestrian

Bird Surround View

Traffic Sign Rec

Auto High beam

Dynamic lighting

Night Vision

Sensors

RADAR/Lidar/Camera

Lidar/Camera

Lidar/Radar

Radar/Camera

Ultrasonic / Camera

Camera

Camera

Camera

Camera

Camera

Camera

Camera/Bolometer

Deployment Trend

ADAS Evolution Timeline

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Park Assist

Blind Spot

Brake Assist

ACC

Lane Assist

Pedestrian Det.

Bird/Surround View

Traffic Sign Rec.

Auto High Beam

Dynamic Lighting

Night Vision

Multifunction Camera

Sensor

Fusion

ECU

Highly Automated

Driving Assistance

based on fusion of

comprehensive environment

info

ADAS Domain Control

Collision Mitigation

2010 2015 2020

• Progression will be in incremental steps of automated assistance towards fully automated vehicles - e.g. emergency braking, automated parking …………..

Technologies:

Radar

Lidar

Ultrasonic

Camera:

- Mono

- Stereo

- ToF

- IR

Cameras Offer Best Growth Prospects of all ADAS Sensor Types

• Cameras offer best combination of growth and volume. Previous use of IR sensors for LDWS is dying out. Ultrasonic sensors not included in above charts: there is still growth here, reaching over 235 million sensors by 2017

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Source: Strategy Analytics Data Nov 2013

Parking Applications Largest for Automotive Cameras

• 100 million cameras forecast to be fitted to light vehicles in 2020

• Parking cameras dominate camera demand. These applications typically have the lowest requirements for camera spec and processing power

• Total camera market less than the sum of applications due to multiple applications running on cameras

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NAFTA-produced Vehicles Driving Camera Demand

• Legislation such as Cameron Gulbransen Kids and Cars Transportation Safety Act helping drive high penetration in NAFTA – but these are mainly reversing cameras

• Japanese penetration did lead market due to high prevalence of navigation, and thus screens in cars, giving a display for the camera data 20

Source: Strategy Analytics Data Nov 2013

European Market Shows Highest Relative Prevalence of High-Value Applications

• Current NCAP rules in Europe forecast to drive adoption of cameras for forward-looking, high-value applications

• Adoption of similar rules elsewhere will drive camera forecast even higher

• NAFTA market looks very different – with reversing aids more dominant on current model assumptions.

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73 Million “Camera ECUs” in 2020

• Complex relationship between # of cameras and the # of ECUs required to control them & process data. Forecast impacted by # applications per camera, and level of integration / sensor fusion

• Almost half of ECU market in 2020 will remain for relatively low-end reversing cameras with limited processing.

• Mono front camera ECU next largest application – much higher value potential 22

ADAS One of the Fastest Auto Electronics Growth Areas

• Growth outside of ADAS and HEV/EV is comparatively weak. These two systems areas are the major growth drivers. HEV/EV growth upgraded due to increase in Plug-In forecast. More risk to HEV/EV forecast than for ADAS. Most ADAS risk is on the upside, in the event of more legislation 23

Source: Strategy Analytics Apr 2014

Growth for All System Types…

• AFL and Park Assist seeing relatively weak growth – AFL threatened by LED lighting systems. Park assist fit rates already very high

• E-Call to be largest system type in revenue terms in 2018 24

Source: Strategy Analytics Data May 2014

Fastest Growth in the More Expensive Segments

• Premium (e.g. JLR, BMW, Audi) and Super-Premium (e.g. Aston Martin, Ferrari, Lamborghini) sectors seeing fastest forecast growth

• Low-cost (<$6000) sector struggling – e.g. Tata Nano

• Mainstream Non-Premium sector also below average growth

Growth Strong in Mainstream Vehicles

• Demand outside of Non-Premium (e.g. Ford, Toyota, Hyundai) and Premium (e.g. BMW, Mercedes) brands is negligible. Best growth/market size combination is for Non-Premium brands. 26

Source: Strategy Analytics Data May 2014

The 900lb. Gorilla

355 Systems

9 Tier 1 Partners

21 OEMs

150 Models

$3.5B

An Exploding Eco-system

• ADASENS Automotive GmbH: http://www.adasens.com/

• Claims to provide “customer tailored software solutions within the area of computer and machine vision algorithms with the possibility to embed on automotive ECU hardware”. Originally a 2009 JV between FICOSA & OMRON, with DENSO getting involved in 2013.

An Exploding Eco-system

• Baselabs: http://www.baselabs.de/

• Offers modules to ease ADAS software development, including the development of customer-specific ADAS software modules to save development time. Claims Bosch, Daimler and Scania amongst its customers.

An Exploding Eco-system

• Bosch SoftTec: http://www.bosch-softtec.com/driveassist.html

• Offers driver assistance SW modules. In collaboration with various Bosch divisions, it claims to be to integrate these functionalities flexibly to customer requests. Examples include Lane Assist System and Driver State Monitoring.

An Exploding Eco-system

• CogniVue: http://www.cognivue.com/automotive.php

• Slightly different to the others on this list. Primarily an IP company for computer vision hardware – but also developing software and algorithms to support its hardware IP. Freescale has licensed CogniVue Image Cognition Processing (ICP) intellectual property (IP) that will be incorporated into new processors for ADAS. Freescale will be the exclusive provider of this technology to the automotive market.

An Exploding Eco-system

• Elektrobit: http://automotive.elektrobit.com/home/driver-assistance.html

• Now publically acknowledged as the #1 go-to source for Daimler ADAS software

An Exploding Eco-system

• Jasmin Infotech: http://jasmin-infotech.com/domain-automotive-ADAS.html

• Embedded software solution provider, with stated expertise in porting various ADAS algorithms on different processors. Claims Analog Devices and Renesas amongst its customers – but not clear if this is for automotive work.

An Exploding Eco-system

• Navigon: http://www.navigon.com/portal/uk/uebernavigon/unternehmen/geschaeftsbereiche.html

• Has worked with Continental, Seat, BMW. Navigation software provider, but expanding into crossover ADAS areas which rely on positioning.

An Exploding Eco-system

• Nexyad: http://nexyad.net/Automotive-Transportation/

• Specialists with a range of ADAS-relevant building-block products to help develop ADAS products. Will also take on full projects. Claimed automotive customers include: PSA Peugeot Citroën, RENAULT (France), Robert BOSCH GmbH, TOYOTA & VALEO.

Competitive Landscape

• Also, many/most of the large engineering services providers are now active in this space, or are looking at moving into it, many spanning both software and hardware, e.g.

• On the hardware side, then the key automotive image chip companies (apart from Mobileye) are Omnivision and Aptina. There is a real fight taking place on the image processing side, with companies such as nVidia and Qualcomm positioning their consumer-oriented GPU parts at this application, and traditional auto suppliers such as Freescale starting to fight back.

More Players

• IAV: http://www.iav.com/en/engineering/vehicle-development/vehicle-electronics

• KPIT Cummins: http://www.kpit.com/engineering/automotive/chassis-safety-driver-assistance-systems

• Neusoft: http://www.neusoft.com/about/1231/index.html

• Ricardo: http://www.ricardo.com/en-GB/Our-Markets/Passenger-Car/Intelligent-Transportation-Systems/

• Tata Elxsi: http://www.tataelxsi.com/industries/automotive/automotive-electronics/advanced-driver-assistance.html

• Tata Consulting: http://www.tcs.com/SiteCollectionDocuments/Brochures/EIS-Brochure-Advanced-Driver-Assist-0113-2.pdf

• Wipro: http://www.wipro.com/industries/automotive-segments/automotive-electronics.aspx

Autonomous Adoption Scenarios

• “Building Blocks in Place” = vehicles with multiple cameras / RADARs / LIDARs / Comms technology etc .– but not fully autonomous under NHTSA level 4 definition

Source: Strategy Analytics Data May 2014

Be Careful what you Wish For!

• With the truly autonomous vehicle everything changes – Powertrain & chassis becomes far less relevant

– Comfort/convenience and infotainment features become far more important

– Need electronic steering, automatic transmission, driver monitor

Connectivity & Architecture

• Will the self-driving car be connected? Volvo says “Yes!” Google says “Maybe!” … doesn’t have to be.

• Displays coming in – resolution increasing – driving processing power demand – driving interest in Intel, Qualcomm, nVidia

• Multi-use displays contributing to convergence of multi-use cameras (safety) and infotainment applications = virtual machines

Headunit

Display

Connectivity ECU/

5th Generation 2018?

Display

Connectivity ECU

Head Unit

Telematics ECU

OR

Cloud

3G LTE

Smart Antenna

Telematics ECU

Smart Antenna

Source: Automotive Multimedia & Communications - AMCS

Infotainment Design Trends-Future Beyond

Conclusions

• Cameras are Driving Safety System Adoption

• Cameras Open Doors to Multiple/Connected Use/Re-Use Scenarios

• Driver Monitoring is an Emerging Opportunity

• Mobileye Dominates the Market but Doors/Minds are Open to Alternatives

• A Vast Eco-System is Emerging

Q&A

Ian Riches – Director Global Automotive Practice iriches@strategyanalytics.com Mark Holden - Director - Business Development - Northern Europe mholden@strategyanalytics.com