Vol. 28, No. 1 u hansenreport.com u February 2015

Auto Industry Looking Carmakers Pushing for Full Car for Defenses against OTA Software Updates by 2020 Cybersecurity Attacks Anyone who uses a computer or a smart- park assist view with reverse camera guides, phone is familiar with over-the-air software among other modifications. updates. I’ve gotten used to updates, which When an update is available, Model S The auto industry is very aware that to- come unbidden. My computer and my owners are notified on the central display day’s vehicles are not well defended against smartphone are better today than when I with an option to install immediately or cyberattacks. Tomorrow’s vehicles, with bought them. schedule the installation at a later time. multiple wireless connections to the cloud Years ahead of every other carmaker, They are further advised to connect the and the world outside the vehicle, will be Tesla, the Silicon Valley maker of electric vehicle to their home’s Wi-Fi network, for even more vulnerable. But carmakers are cars, has made OTA updates routine. Since the fastest update speed, and put the vehi- unsure what to do about the cybersecurity the first Model S was delivered in Septem- cle into park. The average software update threat and concerned about how much ber 2012, Tesla has made 28 software takes 45 minutes. their mitigation efforts will cost. The indus- changes, according to teslasmotorclub.com, try is scrambling to understand the threat and conducted at least 18 OTA software The World’s Carmakers Follow Tesla and find solutions. Any solutions involving updates, according to telarati.com. Major The case for over-the-air software up- onboard electronics will take decades to releases, which bring fundamental improve- dates is solid. For starters, carmakers can’t work their way into the total ments and changes to how the vehicle oper- defend against cyberattacks without the vehicle fleet. ates, happen about once a year, and minor ability to frequently update their vehicles Every day another major corporation releases about every 60 days. with the latest cybersecurity software. falls prey to a cyberattack. Yesterday it was The latest Model S software release, ver- Plus, the economic benefits are substan- Sony; today it is the U.S. health insurance sion 6.1, expands the driver assistance fea- tial. Take away the recalls involving Takata company, Anthem, where a customer data- tures with traffic-aware cruise control, airbags and GM ignition switches and base containing 80 million personal re- forward collision warning and an enhanced most recalls involve software. According to cords was breached. A cyberattack on a Red Bend Software executive vice presi- dent, Oren Bezaleli, half of all recalls are major carmaker or multiple vehicles made What’s Driving Over-the-Air Updates: by a major OEM is not altogether unlikely. because of bugs in the software, and tomor- u In the face of numerous reports of Software defines the car and software row’s cars will be even more reliant on soft- white-hat hackers gaining access to vehicle content is increasing ware. Red Bend, a specialist in mobile u networks and controls, no one in the in- More frequent map updates software management and over-the-air up- u dustry is suggesting that cars are well de- The need to fix problems with infotainment dates, was recently acquired by Harman. systems and update them with new fea- fended from cyberattacks. The industry has (See the company profile of Harman on tures accepted that vehicles are vulnerable and page 4.) u The need to tweak vehicle control sys- Ford spent more than $150 million in the potential for mayhem is real. The prob- tems, especially for highly automated warranty costs over a seven-year period just lem is what to do about it. driving to reflash powertrain controls. Depending According to cybersecurity expert Karl u OTA updates are significantly less expen- Heimer, founding partner at Autoimmune sive than updates done at the dealer on where in the U.S. they are performed, Inc., speaking at the panel discussion I u Software fixes account for more than half software updates at dealers cost OEMs be- moderated at the 2015 Consumer Elec- of all warranty costs tween $75 and $100 per hour. OTA up- tronics Show in January, “Carmakers un- u More frequent updates can solve even dates, especially those done via Wi-Fi, derstand the issue. There is a hiring frenzy minor problems before they lead to a re- would cost a small fraction of that. If done going on across the automotive manufac- call over a cellular network, data charges would turing community and probably also in the u Tesla has shown the world that OTA up- be higher. Additionally, a company han- tier-one supplier community. They are post- dates even to vehicle control systems can dling the update, such as Red Bend Soft- ing many, many jobs for cybersecurity ana- work ware, Arynga or Movimento, might charge lysts and people with cybersecurity u The promise of happier customers who a fee for each vehicle it updates. They expertise.” The CES panel on security experience new features and upgrades would also charge a price for any of their issues for connected cars was organized by after sale software embedded in the vehicle that u Genivi and the SAE. Software updates are an essential ingredi- manages the update. Turn to Cybersecurity, page 2 ent of cybersecurity Turn to OTA Updates, page 3

The Hansen Report on Automotive Electronics, www.hansenreport.com Page 1, February 2015 Cybersecurity… Continued from page 1 NHTSA’s Role the finance ISAC, are very successful be- more than one million modules. Mr. Presi- Mr. Heimer went on to introduce an cause the companies that participate are dio made a compelling case for Movi- idea that has been circulating. He suggested very cooperative and open to sharing. Oth- mento’s security gateway module. that the government needs to work with ers, such as the defense industry ISAC, “Anomaly detection is getting a lot of OEMs and tier ones to establish a base lev- haven’t been very effective, because the par- attention, but in my opinion that is a bit of el of cybersecurity hygiene for cars and im- ticipants tend to be secretive. He worries a red herring. They want to look at all the pel carmakers to adhere to it. David that given the importance to carmakers of CAN traffic, of which there is an enormous Strickland, former administrator of creating strong brand distinctions, carmak- amount. That requires an enormous NHTSA and now a partner at the legal ers will find it difficult to share critical in- amount of data handling, manipulation firm Venable LLC, also on the security formation, at least initially. and number crunching. Instead, we think panel at CES, spoke positively about the you should be worried about not letting concept. “NHTSA has been working very SAE anybody open the door to any of the hard to figure out what that baseline level The SAE Vehicle Electrical System Secu- ECUs, that is, put them into programming of hygiene is, and from there adapt their rity Committee has been officially active mode, which is when an ECU will accept defect authority to push carmakers to stay since May 2011, meeting monthly for a commands. As we do when we are reflash- above that level. Making that baseline flexi- couple of hours, primarily for information ing, we are only looking for somebody to ble and adaptable, but sufficiently hard- sharing. Balloting for its first publication, put the key in the door. That is a simple ened, will be really hard to do. Everything J3061, “Cybersecurity Guidebook for Cy- thing to detect and doesn’t require much with regard to automobile safety is based ber-Physical Automotive Systems,” will start overhead to monitor the bus traffic. When on a notion of unreasonable risk. What some weeks from now and take a few someone puts the key in the door it takes might be unreasonable risk in the eyes of months to be completed. The full commit- us about 10 milliseconds to respond, which the agency or in the eyes of a cyber-expert tee has 104 participants, 22 of whom are is faster than any of the ECUs could go or in the eyes of the consumer might be voting members. into programming mode.” wildly different. That will be another great Anyone thinking there are quick fixes to challenge.” Onboard Solutions automotive cybersecurity should listen to Given its limited resources, NHTSA will Carmakers worldwide are considering Karl Heimer: “Intrusion detection systems be hard pressed to meet the challenges it is how automotive hardware and software that are coming out will raise the bar. They facing. There are only about six or seven must change to harden connected vehicles are all very helpful, but cybersecurity is illu- electrical engineers at NHTSA who have against cyberattacks. “The solution starts sory. You never get secure, it is just not pos- been thinking about cybersecurity and with the software and hardware you sible. What you do is stay ahead of the u none has deep expertise in the subject. choose,” said Mark Zeinstra, a director at attackers in a perpetual arms race.” Visteon Electronics, one of my security Auto-ISAC panelists at CES. “You need to choose an The Association of Global Automakers SoC [system on chip] with the right securi- and the Alliance of Automobile Manufac- ty. You need a secure operating system and turers, which together represent the 28 ma- secure applications.” © 2015 Paul Hansen Associates, 150 jor carmakers operating in the United There will be no cybersecurity without Pinehurst Road, Portsmouth, NH 03801 States, hired the Booz Allen and Hamilton the ability to provide over-the-air software USA. Telephone: 603-431-5859; fax: 603- 431-5791; email: [email protected]. consulting company to help them set up an updates to vehicle control system ECUs. All rights reserved. automotive ISAC (Information Sharing Most carmakers won’t be able to make that Materials may not be reproduced in and Analysis Center). The initial work be- happen at least until 2020. (See our feature any form without written permission. on OTA software updates on page one.) gan in early 2014. The ISAC could be es- The Hansen Report on Automotive tablished by the fall of 2015 and will Multiple carmakers are evaluating intru- Electronics is published ten times a year at operate under the aegis of NHTSA. sion detection systems, such as those from www.hansenreport.com. July/August and In a July 2014 letter, David Friedman, the Israeli firms TowerSec, Arilou, Argus December/January are combined issues. acting administrator of NHTSA, expressed and Check Point Software Technologies. Back issues are available for $50 each. Sin- support: “An automotive ISAC will help IDSs look for anomalies or signatures in gle and multi-user electronic subscription the industry share information on threats, CAN network data traffic to determine if information and a searchable index are vulnerabilities and incidents specific to mo- there is a breech and take remedial action available at www.hansenreport.com. Paul tor vehicles and serve as a resource to ana- to keep vehicle systems safe. Hansen Associates is a strategy and market lyze potential impacts of such concerns.” I spoke about intrusion detection sys- research firm consulting to the electronics There are at least 19 other ISACs in the tems with Dan Presidio, director of engi- industry. , covering industry sectors neering for Movimento, a company based Publisher/Editor Paul Hansen from aviation to information technology. in Plymouth, Michigan, that provides soft- Managing Editor Brianne Wolfe According to one expert who did not want ware flash and reflash services to carmak- Director of Marketing Michelle Long to be quoted, some of the ISACs, such as ers. Thus far, the company has reflashed ISSN 1046-1105

Page 2, February 2015 The Hansen Report on Automotive Electronics, www.hansenreport.com Connected Vehicle (CV) Pilot Deployment Program

The U.S. Department of Transporta- builders, site operators and other interested finance an effort like this that will show tion’s ITS Joint Program Office (JPO) is parties to actually build out large scale com- measurable benefits,” Mr. Fehr said. The eager to get the word out about its work to ponents of complete, connected intelligent program expects the collaborators will also develop a standardized connected-vehicle transportation systems, run them for a year contribute funds to deploy their pilots. communications network. The agency is or so and gather real, measurable benefit The JPO is reaching out to prospects seeking participants to create pilot pro- data.” who haven’t engaged with DOT before, grams to test and evaluate connected vehi- Funding for the pilot program for all making contacts at venues such as the Con- cle data communications systems. participants will be approximately $165 sumer Electronics Show, with telecom and Walt Fehr, manager of systems engineer- million over the next five years, represent- data communications experts, data aggrega- ing for the ITS JPO, outlined the project ing roughly one-third of the ITS JPO annu- tors, call center operators, in-vehicle com- goals: “We are going to be providing signifi- al budget. “There usually aren’t enough ponent makers and mobile device makers. cant funding to enable practitioners, device resources available in the private sector to Continued on page 8

OTA Updates… Continued from page 1 A number of the world’s major carmak- differences between the original and up- embedding a cellular modem and adding ers, including BMW, Mercedes, Renault- dated versions of the software are sent. more memory, carmakers will consider Nissan, Volkswagen, Honda, Toyota and “We do that to minimize the cost of the moving some of the network traffic to GM, are developing highly-automated driv- data transmission and the time it takes to something that is faster and can provide ing features that will let drivers turn their do each update,” said Walter Buga, CEO security. “Nobody wants to wait hours to attention to things other than driving when of Arynga. Movimento works with Red update something in the car,” said Mar- they are on expressways. Highly automated Bend and others to take the differential tin Schleicher, vice president of strategy driving is slated for 2020 but must be ac- file, break it up in the cloud, and send the and key partnerships at Elektrobit. companied by the ability to do OTA up- fragments down to the vehicle where they “There is a clear need for greater band- dates. Control algorithms will need to be are stitched back together into a whole file width than CAN provides. Ethernet is frequently updated once the vehicles are on and flashed onto the ECU. being introduced and we already have the road and carmakers begin to collect In addition to reducing data transmis- FlexRay. Elektrobit is helping BMW and and analyze real-world performance data. sion costs, differential updates eliminate other carmakers apply Ethernet solutions the cost of doubling the memory on every in future vehicles. Ethernet also supports Cellular Connections ECU. “If you do a full-version update, then new security requirements.” Carmakers will rely on embedded mo- you need to keep another bank of memory John Ellis’s team at Ford developed dems for OTA updates to vehicle control in the controller,” explained Yoram Ber- and demonstrated at CES the ability to system software. They may also use holz, director and automotive business line update the head unit via a brought-in brought-in devices, but only for non-safety- manager at Red Bend Software. “If you device. Ford was also developing a pro- critical updates, for example maps or the have four gigabytes in the head unit and cess to push updates to other parts of the infotainment system. you want to replace the software without vehicle over the CAN network. “Just be- Vehicles capable of updates are on a fast doing any modification, then you need to cause you can do that doesn’t mean you growth track. By 2020 one-fifth of new pro- keep another four gigs of memory to take shouldn’t evaluate changing from the duction, or some 26 million vehicles pro- the full version and then make the switch.” CAN bus architecture to Ethernet,” he duced globally, will have the ability to Even with the differential update, John suggested. accept software updates over the air, ac- Ellis, formerly Global Technologist at Ford, Given the crucial role of software in cording to Egil Juliussen, automotive tech- thinks doubling the memory to accommo- creating vehicle value, Mr. Ellis is con- nology senior director and analyst at IHS. date OTA updates is good practice. “You vinced that carmakers need to fundamen- That’s 48% annual growth from 2014. In- do that if you truly want to maintain a re- tally change their DNA: “The ability to cluded in the numbers are updates via em- quirement of never failing. You always do over-the-air updates isn’t enough. bedded and brought-in cellular modems. want to have a clean load that is active and OEMs have to become software compa- running. If something is wrong with the nies. Whether they build the software Differential Updates update you want to be able to flip back to themselves or not, they have to become Red Bend Software and Arynga, devel- the good load.” cognizant of what software is, how it oper of CarSync, an end-to-end solution for works, how to test it, how to manage ver- remote software management, are two of Architectural Changes sions, and how to push versions to cus- the most prominent companies providing Updates can be done on today’s archi- tomers.” Mr. Ellis can be reached by OTA update technology. Both offer differ- tecture but changes will be required to pro- email at his consulting company: ential, or delta, updates, where only the duce optimal results. In addition to [email protected]. u The Hansen Report on Automotive Electronics, www.hansenreport.com Page 3, February 2015 The Company Profile…

Thumbnail Sketch Harman Sales by Fiscal Year Sales by Business Segment

Headquarters: Stamford, Connecticut, 2010 to 2014 CAGR: 12.3% FY 2014 Total: $5,348 million USA; www.harman.com FY 2014 Sales: $5,348 million Professional, Infotainment, R&D: 6.4% of sales 15.9% 53.1% Capital Expenditures: 2.9% of sales Net Interest Expense: $8.0 million Operating Margin: 6.2% $ millions Net Margin: 4.3% Lifestyle, Cash Flow from Operations: $592 million 3,364 3,772 4,364 4,298 5,348 31.0% Working Capital: $962 million, as of December 31, 2014 2010 2011 2012 2013 2014 Sales by Region Long-Term Debt: $199 million, as of December 31, 2014 Net Margin by Fiscal Year FY 2014 Total: $5,348 million Total Equity: $1,951 million, as of 2010 4.9% Rest of December 31, 2014 2011 3.6% World, 19.3% U.S., 30.4% Market Capitalization: $8.82 billion as of 2012 7.6% January 30, 2015 2013 3.3% Rest of Market: Carmakers accounted for 69% of 2014 4.3% Europe, Harman’s sales in FY 2014 18.1% Germany, 32.2% Automotive Products: Infotainment, audio and sound systems sition of Becker formed the basis of Largest Customers: BMW (16% of net Harman’s market-leading automotive info- was adopted by more than ten OEMs, sales), Fiat Chrysler Automobiles (13%), tainment business. In 2004 Harman pur- according to Harman. Today, Sachin La- Volkswagen/Audi (12%) and Toyota/Lexus chased QNX Software Systems, which it wande, president of Harman’s Infotain- (8%) ment division, sees what may prove to be a Employees: 14,202, as of June 30, 2014. sold to BlackBerry in 2010. Approximately 3,500 are software engi- Some of the company’s more recent ac- better way to monetize Aha technology, neers; 3,000 are hardware engineers. quisitions are detailed below. specifically its data analytics capability. “We Roughly 40% of Harman’s employees are now have online analytics capability that based in North America. iOnRoad Technologies can get information from the car onto the Sales per Employee: $376,567 Acquired: April 2013 cloud better than anyone else. We would Note: Fiscal year 2014 ended June 30, 2014. Base: Tel Aviv, not have this capability without the Aha Purchase Price: $8.5 million acquisition.” Background Employees: 12 Harman plans to leverage its analytics Harman International was founded by Organization: iOnRoad operates as a Har- capability to provide OEMs with a wide Dr. Sidney Harman in 1953, when he and man subsidiary company. range of information, for example vehicle Bernard Kardon formed a partnership, Products: iOnRoad developed a phone diagnostics and vehicle health, timely data , to produce the world’s app that uses the phone’s camera to pro- on exactly how features and functions are first monaural hi-fi receiver. A stereo receiv- vide collision warning and lane departure used by consumers, including the HMI. It er was launched five years later. Today, warning. It has been developing camera can report where GPS drop-outs occur. It Harman is widely recognized as the indus- image processing software. can also access information sent over the try’s leading infotainment supplier. It also CAN bus. “When you add this capability claims to be number one in professional Aha Radio to Red Bend’s capability, not only do you audio as well as automotive audio. More Acquired: 2010 have analytics that tell you what went than 25 million cars on the road today car- Base: Palo Alto, California wrong, you have the ability to fix it with an ry Harman audio or infotainment systems. Purchase Price: $1.8 million update to the car. This is where the solu- Harman International grew with a series Employees: 5 at the time of the acquisition tion becomes truly powerful,” Mr. Lawande of acquisitions, starting with JBL in 1969. Product: Aggregated Internet content de- advised. At least four OEMs will embed Over the next twenty years seven more livered to smartphone or head unit as Harman’s analytics technology, which has companies were added, including Infinity, audio not yet officially launched, and Harman , Madrigal, maker of Mark Aha has not been tremendously success- says it is seeing strong interest from the Levinson audio systems, and the German ful in automotive as an Internet radio and industry. radio company Becker, in 1995. The acqui- content provider, although the technology Continued on page 5 Page 4, February 2015 The Hansen Report on Automotive Electronics, www.hansenreport.com Harman International

Infotainment Sales and Operating Lifestyle Sales and Operating Harman R&D Expenses by Fiscal Year Margin by Fiscal Year Margin by Fiscal Year 2012 to 2014 CAGR: 8.7% 2012 to 2014 CAGR: 11.5% 2,839 1,656 2,402 2,283 1,331 1,338 $ millions

322.7 304.6 331.9 285.3 343.8 $ millions $ millions 2010 2011 2012 2013 2014 2012 2013 2014 2012 2013 2014 Operating Margin strategy with QNX, which became the de Operating Margin 2012 11.4% facto operating system for embedded info- 2012 7.5% 2013 10.3% tainment systems worldwide,” noted Mr. 2013 4.0% 2014 10.3% Paliwal in a conference call with market 2014 6.9% analysts. QNX’s infotainment system plat- form had a 64% share of the market in vehicle’s software after it leaves the factory 2014. Harman Total Equity by Fiscal Year to make improvements and, once over-the- Red Bend’s OTA update technology will air (OTA) updating capability is in place, 2010 to 2014 CAGR: 12.1% first be applied to infotainment systems, to add value to the vehicle over its lifetime. keep navigation map data current. Since Because dealer-installed updates are incon- infotainment systems are developed years venient for the customer and expensive for before they are deployed in new vehicles, $ millions the carmaker, the industry is gearing up to the ability to update their software will make cars updateable over-the-air (OTA). keep them more competitive with portable 1,135 1,424 1,530 1,645 1,793 A pioneer in providing firmware and soft- consumer electronics devices. According to ware update technology to portable device Harman, the 3D navigation system it devel- makers and carriers, Red Bend is already oped for BMW was the world’s first to re- 2010 2011 2012 2013 2014 working with seven U.S. and European ceive OTA updates. carmakers as they prepare to make over-the- Red Bend Software air updates routine. Symphony Teleca Acquired: January 2015 Providing diversification, the Red Bend Acquired: January 2015 Base: Hod Hasharon, Israel, and Waltham, acquisition positions Harman to compete Headquarters: Mountain View, California Massachusetts and add value beyond the infotainment Purchase Price: $780 million Purchase Price: $170 million, plus $30 and audio domains, where it is strong, to 2014 Revenue: $370 million, 80% of million potential earn out every other automotive electronics domain. which comes from North American and 2014 Revenue: Less than $50 million And further, Red Bend takes Harman into European customers Employees: 230 important mobility markets beyond auto- EBITA margin: 16% Revenue per Employee: Roughly $200,000 motive, namely, the mobile device and car- Employees: 8,000 Organization: Part of the Harman infotain- rier markets. Revenue per Employee: $462,500 ment business segment According to Harman CEO, Dinesh Products: Outsourced product develop- Locations: Israel, , U.S., U.K., Paliwal, by 2020 more than 90% of new ment, software and engineering services , , Korea and Germany cars will be connected. By then, Red Bend Major Customers: Google, Microsoft, In- Products: Mobile software management estimates the automotive market for OTA tel, Adobe, JLR, Verizon, Comcast and solutions, including technology for over- software and services updates will reach SiriusXM the-air firmware and software updates between $500 million and $1 billion. Markets Served: IoT, telecom, consumer Major Customers: Verizon, AT&T, LG, Along with providing Red Bend with electronics, independent software vendors, Samsung and Lenovo the resources it needs to address the fast healthcare and automotive Markets Served: Mobile, carrier and auto- growing OTA update market, Harman According to Mr. Paliwal, Harman’s ac- motive wants to make Red Bend software the de quisition of software and engineering ser- If there is one technology that distin- facto standard for mobile devices and auto- vices provider Symphony Teleca, “will guishes one car from another it is software; motive applications. Red Bend software has provide Harman immediate scale in engi- software content in vehicles increases every already been embedded in two billion mo- neering services to accelerate connected car year. Carmakers often need to modify the bile devices. “Harman followed a similar Continued on page 6 The Hansen Report on Automotive Electronics, www.hansenreport.com Page 5, February 2015 Harman International

Infotainment Customers in 2014 Competition According to Sachin Lawande, “Current penetration levels of infotainment systems Audi/Volkswagen Mazda Major Infotainment Market Competitors Aisin Seiki Denso are below 25% globally. We’d have to BMW PSA Peugeot reach penetration levels of at least 50% be- Daimler Citroën Alpine Mitsubishi Electronics fore you could truly say we are starting to Fiat Chrysler Porsche Bosch Panasonic reach saturation. In my opinion we are Geely Scion Continental Visteon four or five years away from that.” General Motors Ssangyong Delphi Harley-Davidson Suzuki Mr. Lawande believes Harman is “faster, Hyundai Toyota/Lexus Major Automotive Audio OE Market more nimble and farther ahead on technol- Jaguar Land Rover Yamaha Competitors ogy,” than any of its infotainment competi- Kia Bang & Olufsen Foster Electric tors, including those it considers the most Bose Panasonic formidable: Alpine, Mitsubishi Electric and innovations, a space we know well.” Seven Delphi Pioneer ASK Panasonic. thousand of Symphony Teleca’s eight thou- u sand employees are software developers, a “This acquisition broadens our reach Mid-to-High Scalable Platform resource in very short supply in the auto into new industries and markets,” said Mr. Introduced a year ago, Harman’s most industry. Its headquarters are in Silicon Paliwal in his conference call with analysts. promising new product is a mid-to-high Valley, the cradle of Internet and mobile “The services business is counter cyclical to scalable platform. Scalable means that the device innovation. normal industry trends. When capex cycles infotainment system platform can serve Symphony Teleca’s four major capabili- down, services do well.” Over the last cou- multiple price points. The hardware is up- ties—design, mobility applications, cloud ple of years, Symphony Teleca’s revenue gradable: the microprocessor module can services and analytics—are in demand in the has grown at percentages in the teens. Mr. be changed, even in the field, for one that auto industry, given OEM plans to connect Paliwal expects that growth to continue. is more capable, and the software is upgrad- a high percentage of new cars to the cloud Symphony Teleca will become Har- able via over-the-air firmware and software by 2020. man’s Software and Services Division un- updates. That is hugely important as car- Automotive is one of eleven industries der the company’s CEO, Sanjay Dhawan, makers strive to keep infotainment systems served by Symphony Teleca. The company who will report to Mr. Paliwal. more up-to-date in comparison to brought- has completed more than 800 Android in mobile devices. By having a single plat- projects, nearly all of which were in non- S1nn form that can be scaled up depending on automotive markets. As an infotainment Base: Stuttgart, Germany what features and applications are added, system integrator, Harman is developing Acquired: December 2014 more of the software that underpins the Android-based head units and could lever- Sales: About €100 million system can be reused. Harman expects to age that expertise in future systems develop- Products: Mobile device-to-vehicle connec- receive its first orders for the platform in ment. tivity ECUs, car audio and infotainment June or July of 2015, in time for produc- Symphony Teleca was an early member Employees: 100 tion in 2018. of Google’s Open Handset Alliance and Sales per Employee: About €1 million Probably the most compelling feature of Open Automotive Alliance. The company Customers: Volkswagen, Porsche, Audi, the platform is its hypervisor software. The is also a member of several technology de- Bentley and Tesla Motors hypervisor, which sits atop a multicore pro- velopment alliances important to the auto Market: German Automotive OEMs cessor, supports multiple operating system industry including the AVnu networking S1nn was founded in 2004 on the belief platforms while providing safe separation alliance involved with bringing Ethernet that it could fulfill a niche in the middle of between them. According to Mr. Lawande, AVB to the auto industry, Genivi, the Li- the audio market, below the premium the hypervisor is critical to security: “[With nux Foundation and Real VNC. It has a brands. Its four founders all were formerly hypervisor technology] you can have a strategic alliance with Movimento to work associated with Bose. S1nn outsources all CAN bus interface in one domain and the on secure and robust vehicle software up- of its manufacturing, which accounts for its infotainment system in another domain, dates. It also has experience doing HTML5- high ratio of sales per employee. both on the same chip. Software from the based development. infotainment side won’t be able to take According to Harman, some 50% of Infotainment over and masquerade as a legitimate CAN Symphony Teleca’s 2014 revenue came Harman’s Infotainment business seg- network device, which is how security is from telecom and automotive customers, ment is its largest, accounting for 53% of compromised.” 25% from independent service vendors for revenue in fiscal 2014. While the penetra- Because of the hypervisor, Harman can whom it provided cloud, mobility and ana- tion of infotainment in luxury cars is al- integrate other systems within the infotain- lytics work. Another 20% came from verti- ready high, Harman and other suppliers ment platform, such as the instrument clus- cal markets such as energy, consumer have at least a five-year window before the ter and advanced driving assistance electronics, healthcare, banking and retail. demand for embedded systems plateaus. Continued on page 7 Page 6, February 2015 The Hansen Report on Automotive Electronics, www.hansenreport.com Harman International

Major Audio System Customers scalable from entry level to lower-mid seg- Harman Audio Brands in Automotive Harman Kardon ment vehicles. BMW Hyundai Infinity The platform can project applications Brilliance Kia JBL from brought-in devices via Apple CarPlay, Chang’an Lincoln Lexicon Android Auto or MirrorLink or run appli- Daimler SAIC Mark Levinson cations such as 3D navigation and speech Dongfeng Subaru Revel recognition natively on the head unit. Fiat Chrysler Toyota/Lexus “Carmakers won’t just rely on the pro- Geely Volvo Harman Audio Technology Brands jected mode for all of the functionality,” Great Wall Clari-Fi cautioned Mr. Lawande. “Today you have HALOSonic Apple, Google and in China you have features, all running on the same high-func- Individual Sound Zones (ISZ) Baidu, whose user experience is ahead of tioning multicore processor. Integration Logic 7 even Google. Alibaba isn’t far behind. The enables cost savings for the carmaker and QuantumLogic Surround problem is, how many of these guys are car- higher average selling prices for Harman. makers going to support? Will they simply While the cluster’s electronics and soft- which operating system to use,” he said. defer to the device makers, or will they put ware can be integrated within Harman’s “What is more important now is the ecosys- in their own embedded applications as infotainment system, Harman will not pro- tem. That was the clear writing on the wall well, which is what GM, Toyota and Volk- duce the cluster itself or its display. The when we decided to divest QNX.” Harman swagen are doing.” same holds true for head-up displays. Har- recognizes the Android operating system as For now, navigation applications pro- man would handle the electronics and soft- one solution, a step along the way. “We jected from brought-in devices can’t com- ware that drives the display and a partner fully believe that ultimately the goal is pare to 3D navigation running on a head would produce the HUD’s optics including HTML5. … Today’s HMIs are static; unit. A difficulty for the device maker is combiner, projector and display compo- HTML5 will help us make the infotain- the Bluetooth link from the device to the nents. ment system more adaptable, able to self- head unit, which is too slow to transfer the While Harman does not want to com- learn. With HTML5 we can create a user large amount of data characteristic of 3D pete directly with the instrument cluster interface that allows us to customize mash- graphics. makers, “We definitely are going into ups of information on the fly.” ADAS, no question about it,” declared Mr. For example, with HTML5 Harman can Outsourcing Lawande. “I don’t want to compete with make recommendations that are intuitive— Within the next three years, Harman Mobileye head to head. Mobileye has fo- based for example on a mashup of the car’s plans to outsource 20% of the parts used to cused on image processing of monocular map position, an implied destination, an- manufacture the company’s infotainment cameras. Our point of view is different. We ticipated traffic and the driver’s calendar— systems. Harman will always do the final believe that no single sensor [type] is suffi- and ask the driver if he wants to take an assembly but would outsource some moth- cient to do everything. When you use just alternate route in order to reach his desti- er boards and daughter boards, taking ad- one sensor you have to add a huge amount nation on time. Harman sees HTML5 as vantage of outside manufacturing capacity of software and analytics to compensate for the way to customize information based on for common processes, such as surface what the sensor does not provide. We be- context and place it on the screen in a con- mount device assembly. lieve you need a combination of sensors. venient way. Driver distraction is reduced You need a camera, radar sensors, car-to-x, when the user isn’t forced to go through Automotive Audio (Part of the Lifestyle information from the cloud and electronic multiple menu steps to complete a task. Division) horizon,” he said. Using detailed maps The OEM market for audio equipment combined with data from on and off the u Scalable Entry-Level Platform has reached slightly under $4 billion. Har- vehicle, e-horizon systems preview the road Harman sees the era of basic man serves the premium segment of this ahead and warn the driver about obstacles AM/FM/CD radio as essentially dead as market, a segment the company estimates is and other hazards not seen by onboard sen- carmakers increasingly incorporate connec- growing at 8% or 9% per year. “The sors. Harman expects that its fused-sensor tivity solutions. As a replacement for the growth rate reflects the increasing demand approach will be less expensive than Mobil- traditional radio/CD player, Harman of- for branded audio beyond D-segment vehi- eye’s monocular-camera-only approach. fers its latest scalable entry-level platform, cles and SUVs into the C+ segment,” said According to Mr. Lawande, today’s info- which features a 6.5- or 7-inch WVGA Phil Eyler, Harman’s senior vice president tainment solutions are typically built using touch display with 800x480 resolution. Au- and general manager for global automotive the QNX operating system (and to a lesser dio support includes an integrated amplifi- audio. “People are coming to expect better degree, operating systems that are Linux er, AM/FM tuner and off-band traffic performing audio and branded audio in based). “In the past there was a battle about message channel capability. The platform is Continued on page 8

The Hansen Report on Automotive Electronics, www.hansenreport.com Page 7, February 2015 Harman International

u cars that haven’t had it in the past. This is 2016 Hyundai Aslan (Korea) and the 2015 HALOSonic Sound Management especially true in China and the emerging Lincoln MKX (N.A.). and Synthesis markets.” Harman serves twenty automak- Proponents of active noise cancellation u ers worldwide with its audio products. Individual Sound Zone (ISZ) technology have been targeting automotive Technology applications off and on for more than Promising Audio Technologies Harman demonstrated a vehicle at CES twenty years. “Now,” said Mr. Eyler, “we u Clari-Fi equipped with Individual Sound Zone tech- are really bullish on the growth of our Pandora streams music at 64 kbps, just nology that helps to reduce sound clutter noise management business.” The HALO- 5% of the data supplied by a CD track. for the driver and passengers. “The technol- Sonic technology suite was introduced Given the losses due to compression, low ogy manages the audio throughout the cab- nearly six years ago and finally, with car- fidelity has become the norm for most digi- in. You have navigation prompts and makers getting ever more serious about tal audio. If people are listening mostly to phone calls coming in, people in the back weight reduction, canceling the resultant Internet or satellite radio or MP3 files in wanting to listen to different things,” said cabin noise rather than adding heavy their cars, they have little need for expen- Mr. Eyler. “Individual Sound Zone technol- sound-deadening material has come up sive multi-speaker systems and expensive ogy is our solution to help customize the higher on their agenda. digital signal processors. experience for each passenger.” Road noise cancellation minimizes low Harman’s response to the proliferation Using the existing audio system speak- frequency broadband noise from the road of poor quality audio sources is Clari-Fi, ers, with the addition of headrest speakers surfaces carried into the vehicle cabin proprietary software that “reconstructs au- equipped with micro-speaker technology, through tires, suspension and vehicle body. dio signal elements lost in the compression along with flat Electrodynamic Planar Engine order cancellation uses active noise process,” according to Mr. Eyler. “Clari-Fi Loudspeakers in the headliner, ISZ can be cancellation to reduce the drone and rum- does this by analyzing for and reconstruct- integrated into any Harman car audio sys- ble of a car engine. Electric sound synthesis ing missing high frequency harmonics and tem via the amplifier. The digital signal generates authentic engine sounds in and lost reverb, sharpening dulled transients, processor tempers the signals from other out of the car. For hybrids and electric ve- and widening narrowed sound stages.” zones, regardless of whether they are music, hicles, sound synthesis ensures pedestrian Launched a year ago, Clari-Fi has al- voice or other sounds. safety. ready found application in Harman audio While the technology generated a lot of Harman is providing engine order can- systems installed in multiple vehicles in- interest at CES in January 2015, no orders cellation for several Fiat Chrysler vehicles. cluding the 2015 Lexus NX (Europe), 2015 had yet been signed as of early this month. It also partnered with Ford on electronic Lexus RC (N.A.), 2016 Kia Sorento (N.A.), sound synthesis for electric vehicles. u

CV Pilot… Continued from page 3 Mr. Fehr is hoping to avoid any kind of ened this stage of the CV Pilot Program to Test Beds for a list of participants, many of proprietary approach to communications the time before email became standardized, whom are interested in finding partners. by individual OEMs, where vehicles are when only subscribers on the same network Among the companies already partici- exchanging data only with identically could communicate, and cell phones could pating are Sirius XM, Ibiquity, Denso, Al- equipped vehicles and no carmaker’s solu- only connect with phones from the same pine, Renesas, Hyundai America Technical tion is compatible with any others. He is carrier. “Once a uniform data element defi- Center and Pravala Networks. looking for a standard way to allow collab- nition is accepted, anyone can create it and Phase 1 of the Connected Vehicle (CV) orative contributions from all vehicles. anyone can use it,” he said. The JPO has Pilot Deployment Program, first an- “One of the central points we are trying to been working on such a common defini- nounced in December 2014, is for concept emphasize is the development of uniform tion for years and will make that available development only. Proposals submitted do fundamental data from all contributors, to participants in the CV Pilot Program. not need to be fully fleshed out. “We just such as the location of moving vehicles on The JPO is looking for heavy participa- need to have a pretty good understanding the roadway, the location of stopped traffic, tion from global carmakers and automotive of their concept and how they hope to ac- black ice, fog, parking places, the funda- electronics suppliers to build a trial fleet. complish its design and deployment,” Mr. mental data that everyone should have the “A huge portion of this system is going to Fehr said. The deadline for responses is benefit of. All can contribute, all can bene- be built and operated by the people who March 16, 2015. fit in a commodity-style market.” build and operate vehicles,” according to For information, start by visiting Mr. Fehr observed that no one really Mr. Fehr. www.its.dot.gov/pilots or contact Sarah knows if new technology implementations Teams are forming to submit their joint Khan by email at [email protected] or by will have value to society until they are proposals. The DOT invites interested par- phone 202-366-0220. u built and become widely accessible. He lik- ties to view what it calls the Affiliation of Page 8, February 2015 The Hansen Report on Automotive Electronics, www.hansenreport.com