The Connected Car: In-Vehicle Apps for the Future

IHS iSuppli Topical Report | Automotive Research The Connected Car—In-Vehicle Apps for the Future

Report Author Egil Juliussen, PhD, Principal Analyst & Fellow; with Stacey Oh Analyst & Regional Manager, and Dmytro Koshevy Researcher, Automotive Research © 2011 iSuppli Corporation, a Company which was acquired by IHS Inc. All Worldwide Rights Reserved. Confidential, Patents Pending. 1700 E. Walnut Avenue El Segundo, CA 90245 Telephone: + 1.310.524.4007 Email: [email protected] Automotive Research The Connected Car—In-Vehicle Apps for the Future

Table of Contents Executive Summary...... 1

Introduction...... 1

Findings ...... 2

The Apps Landscape ...... 2

Categorization of Vehicle-Centric Mobile Apps...... 4

CRM Apps...... 4

Vehicle Location & Telemetry Apps...... 4

Traffic/Navigation/LBS Apps...... 6

Eco/Diagnostics Apps...... 7

Entertainment Apps...... 8

Internet Radio...... 8

OEM Smartphone Apps ...... 9

BMW...... 9

Ford ...... 9

GM...... 10

Mercedes-Benz...... 10

Nissan...... 11

Toyota...... 12

Volvo...... 13

OEM Integration of Mobile Apps into the Head Unit...... 13

SYNC AppLink...... 13

Toyota Entune...... 14

Auto Infotainment Content Overview ...... 16

Local Search...... 17

Send to Car...... 17

What Is Mobile App Integration...... 18

Content Integration Examples...... 18

OS and Middleware...... 21

Middleware Categories...... 21

Head Unit Integration Process & HMI...... 22

OEM HMI Take-Up Rates...... 23

HMI Trends for Mobile Apps...... 23

Apple iPod Out...... 24

RealVNC's VNC Mobile Solution for Automotive...... 24

Terminal Mode...... 24

DirectVoxx...... 25

The Role of Media Tablets...... 26

Apps Integration Forecasts...... 28

Smartphone-Based Remote Control...... 28

Internet Radio Apps Integration...... 28

Social Network Apps Integration...... 29

Head Units with Apps Integration...... 30

Conclusion...... 31

Figures Figure 1: Transition from Fixed Function Head Units to Apps-Based Head Units...... 1

Figure 2: Daimler Smart Drive App...... 3

Figure 3: Customer Relations Management (CRM) Apps...... 4

Figure 4: Vehicle Location and Telemetry Apps...... 5

Figure 5: Traffic/Navigation/LBS Apps...... 6

Figure 6: AVIC FEEDS App...... 7

Figure 7: Eco/Diagnostics Apps ...... 7

Figure 8: Entertainment Apps...... 8

Figure 9: My BMW Remote App...... 9 Companies Mentioned Acer Apple Asus Figure 10: OnStar RemoteLink App...... 10 Dell Hewlett-Packard Intel Figure 11: Mercedes-Benz mbrace Mobile App...... 11 Lenovo Research In Motion Toshiba Figure 12: Nissan Leaf App...... 11

Figure 13: Citroen eTouch App...... 12

Figure 14: Lexus Enform Mobile App...... 12

Figure 15: Volvo On Call App...... 13

Figure 16: Toyota Entune...... 14

Figure 17: BMW Connected...... 15

Figure 18: Mini Connected...... 15

Figure 19: Aha Mobile...... 19

Figure 20: Pioneer Zypr...... 20

Figure 21: OEM HMI Take-Up Rates...... 23

Figure 22: HMI Trends for Mobile Device Integration...... 23

Figure 23: Terminal Mode...... 24

Figure 24: DroidBuzz...... 26

Figure 25: DroidBuzz UI Profiles...... 27

Figure 26: Regional Internet Radio Users...... 29

Figure 27: Regional Social Network Users...... 30

Figure 28: Cumulative Smartphone Apps Integration Sales...... 31

Figure 29: Auto Apps Integration - Big Picture...... 31

Tables Table 1: Auto Infotainment Content Overview �� 16

Table 2: Examples of Content Integrators �� 18

Table 3: HMI Trends �� 22

Table 4: Table 5: Smartphone-Based Remote Control Auto Integration Sales �� 28

Table 5: Internet Radio Auto Integration Sales �� 29

Table 6: Social Network Auto Apps Integration Sales �� 30

Table 7: Head Units With Apps Integration Sales �� 30

Companies Mentioned AccuWeather Alarm.com Alpine Apple Audi BMW Buick Cadillac Chevrolet Chrysler Citroen Clear Channel Daimler Denso Directed Electronics DirectVoxx Elektrobit Facebook Ford Motor Company Funkwerk Dabendorf General Motors GMC Google Gracenote Harman Honda Hummer Hyundai iheartradio INRIX Traffic! Jeep Johnson Controls Jungo Kia Motors Last.fm Lexus LG Electronics Lincoln Live365 Luxoft Mazda Mercedes-Benz Mercury Microsoft Mini Movietickets.com Nissan Nokia Nomadic Solutions Octo Telematics OnStar OpenTable.com Panasonic Pandora Peugeot Pioneer Pontiac RealVNC RIM Rovi Saab Samsung Saturn Slacker Sony Spotify SVOX TomTom Toyota TuneIn Tuner2 Tweddle Group Twitter Viper Volkswagen Wcities Yahoo Yelp

Executive Summary Handheld devices such as mobile phones and smartphones will play a key role as an integrated part of in-vehicle infotainment systems. Smartphones hold a leading position among devices brought into the car with their high integration of multi-function capabilities, such as GPS and media players. Consumers are attracted to smartphones for easier and faster communication, as well as the real-time information available through applications. Smartphone applications are a special type of a software program used on a smartphone, mobile and a handheld device running on an iPhone, Android, BlackBerry, Windows Mobile Phone 7 and other smartphone platforms. Some vehicle apps are branded by automakers and some cover the full gamut of an infotainment system. As the complexity of apps increases with additional content, features, accessibility, and user interface, in-vehicle human machine interface (HMI) tools will allow for more complex content to operate without additional distraction. Meanwhile, the functionalities, choices, and variety of apps will only increase with time. Apps will continue to grow in importance as communication and content channels, as well as conduits for users to access their vehicles and assimilate brand loyalty.

Introduction With consumer electronics, especially smartphones, influencing the in-vehicle electronics landscape, OEMs are looking to revolutionize the in-vehicle experience through connected devices and so‑called cloud-based content. The key to this emerging connectivity is applications that provide infotainment, entertainment, remote diagnostics and navigation solutions complete with real-time traffic and weather information. Some of these apps will be built into the head unit, but most will be smartphone-based apps that are integrated with the head unit and/or telematics system. The result is that in-vehicle infotainment systems are in the middle of a major transition from fixed function head units to what IHS iSuppli calls apps-based head units. Figure 1 illustrates the transition from fixed-function head units to apps-based head units.

Figure 1: Transition from Fixed Function Head Units to Apps-Based Head Units

Source: IHS iSuppli | August 2011

In the past, the typical head unit was primarily focused on providing entertainment from broadcast radio, cassettes, and compact discs. Later, the addition of optional navigation systems increased the importance of the head unit. In the future, the head unit architecture will see a dramatic change and the design will be similar to the way PCs are designed. The so-called apps-based head unit will be based on a software and hardware platform that will provide functionality via custom applications (apps). These apps will run on the head unit operating system (OS) through a human machine interface (HMI).

OEMs will include several standard apps to provide key vehicle functionality such as navigation, audio entertainment from a digital music broadcast and from MP3 players or memory cards such USB or SD cards and climate controls. The driver will also have the option of selecting additional apps that can be downloaded and stored on the head unit. Another key feature of an apps-based head unit is smartphone integration; this will enable the driver to tap into the vast amount of auto-related smartphones apps and download them onto the head unit. The smartphone will also provide a crucial function—a data plan for covering the cost of wireless communication to receive content and services. Most drivers will resist using a separate data plan for their car and will insist on using their smartphone data plan for cost saving. Some of today’s head units already have some of these features, but many more will emerge in the next few years. The main object of this report is to review what is happening in the growing and important apps integration segment. Several key topics will be covered: • Overview of auto-related smartphone apps • Review of the leading OEM apps and their integration efforts • Apps integration alternatives and trends • HMI trends that impact apps integration • Market forecast of key apps • Potential impact of media tablets and their apps

Findings • Smartphones have a large number of auto-related apps that are very useful to the driver and passengers. A variety of apps categories have emerged ranging from navigation and location based services (LBS), to entertainment and vehicle centric apps. • These smartphone apps will be used in the car, but many have significant driver distraction issues. Driver distraction problems need to be solved by integrating the apps through existing and emerging car HMI technologies. In-vehicle infotainment systems need to add apps integration features. • Head unit apps integration to smartphone apps is a key trend that leading auto OEMs are starting to deploy. • Four specific apps categories are emerging and are receiving strong attention from the auto OEMs: general smartphone apps integration, remote control of specific vehicle functions, Internet radio apps, and social networking apps. This report includes market forecasts for these four categories. • A general purpose approach for smartphone apps integration that can manage many apps and services is emerging —for example, Terminal Mode, Aha Radio and Pioneer Zypr.

The Apps Landscape To the attraction of smartphones by users for easier and faster communication, as well as the information available through apps, has led to an increased relevance of smartphones and apps in the car, and IHS iSuppli has categorized vehicle-centric apps into five categories: • Customer Relations Management (CRM) • Vehicle Location & Telemetry • Traffic/Navigation/LBS • Eco/Diagnostics • Entertainment

Vehicle-centric apps can be focused on one function, or include many. Some appear to cover the full gamut of an infotainment system; some are branded by an automaker. An example in this space Figure 2: isDaimler the smart Smart drive app Drive from App Daimler. This app literally gives the user all the necessary functions for connected travel, and it has full device integration for phone and media playback. Developed by the Mercedes-Benz R&D team in Palo Alto, California, the app is designed to give smart drivers with an iPhone the capability of an infotainment system without the cost. Users pay $9.99 for the initial app download—which comes will all of the features except the full turn-by-turn navigation (which is an additional $49.99 annual subscription for the upgrade).

Figure 2: Daimler Smart Drive App

Source: Daimler| August 2011

According to IHS iSuppli estimates, the average MSRP for infotainment systems today is roughly $1,500 —this is equivalent to approximately 30 years of subscription fees for the Smart Drive app. As well, in two years or so, users are likely to upgrade their device or get a free update to the app, which is an option not available in most head units today. Daimler officials even mentioned that non-smart brand drivers could download and use the app. For the OEM, it's a chance to improve brand recognition, as well as earn a little bit of revenue in the process. AtCopyright the  end2011 iSuppli of Corporation,the day, a Company Daimler which was is acquirednot bankingby IHS Inc. All Rightson Reserved.revenue Confidential from – Patents the Pendingapp, but is more concerned with selling vehicles. IHS iSuppli believes that in the near future, these all-in-one infotainment apps could see some growth as smaller OEMs recognize the importance of the connected car, but do not have the capital to implement a full telematics and infotainment system. Furthermore, IHS iSuppli has recognized that automakers have begun to brand and market their own apps and distribute them via online app stores.

Categorization of Vehicle-Centric Mobile Apps The following sections focus on the five categories mentioned previously as well as Internet radio, which will each be explained with accompanying smartphone screen shots.

CRM Apps As seen in Figure 3, many of the early OEM apps have been focused on customer relationship Figuremanagement 3: Customer (CRM). Relations Acting Managementas an owner's manual (CRM) for Apps the user, CRM apps are designed to create a new communication channel between customers and OEMs, and create a foundation to enhance vehicle connectivity. Examples of this include the Hyundai Equus iPad Owner's Manual and appointment setting app, as well as some roadside assistance apps from BMW, Mini, and Mazda.

Figure 3: Customer Relations Management (CRM) Apps

Source: IHS iSuppli | August 2011

Chrysler, in collaboration with Tweddle Group, launched owner information apps for the Jeep Compass, Patriot, Wrangler, and Liberty vehicles, among others. Available as free downloads from iTunes, Android Market, and BlackBerry App World; these vehicle info apps combine owner manual information withCopyright product  2011 iSuppli features Corporation, aand Company benefits. which was acquired Key by IHS featureInc. All Rights Reserved.categories Confidential include – Patents Pending vehicle highlights, operating instructions, dealer locator, inspection and maintenance schedules, warning lights and controls, warranty information, and customer assistance. Other features and benefits include links to Mopar parts and accessories, Jeep gear and merchandise, and Jeep social media sites. The apps contain media content such as photos and videos, as well as a search utility that allows for vehicle information search.

Vehicle Location & Telemetry Apps Vehicle location & telemetry apps are generalized as those that can remotely communicate with the vehicle from an extended range for the purpose of location or remote control. Developers have created a range of apps in this category that span from complex to simple, and connected to non- connected.

Copyright © 2011 iSuppli Corporation, a Company which was acquired by IHS Inc. Topical Report 4 Figure 4: Vehicle Location and Telemetry Apps Automotive Research The Connected Car—In-Vehicle Apps for the Future

Figure 4: Vehicle Location and Telemetry Apps

Source: IHS iSuppli | August 2011

One app, Find Your Car with AR: Augmented Car Finder features a car finder with augmented reality (AR) from Augmented Works. Compatible with both the iOS and Android OS, the app simply records the GPS location of the car. Later, when the user needs to get back to their vehicle, the app uses a magnetic compassCopyright to show2011 iSuppli the Corporation, AR view. a Company This which was is acquiredan example by IHS Inc. All Rightsof an Reserved. app Confidential that needs – Patents Pending no communication with the vehicle. It simply uses geo-tags to guide the user back to their vehicle. Where most apps can function without any hardware interaction in the car, some require hardware add-ons for operation. Often these apps will cost more than their software-only counterparts. Yet, in many cases, they will also enable more services and features than those without a connection into the car. One vehicle finder app, Viper SmartStart, launched in July 2010, also enables remote start, door locking and even alerts the user in the event of an intrusion. Viper launched its SmartStart app as a service that is added onto existing Viper hardware systems. With a minimum hardware cost of $249.99 plus installation, the Viper SmartStart app enables access to features such as lock/arm, unlock/disarm, remote car start, trunk release, panic or car finder, multiple vehicle controls, parking finder, SmartAlert, SmartPark, confirmation prompts, Viper Motor Club, and account access on the user’s iPhone, BlackBerry, or Android devices. At CES 2011, Viper announced the Viper SmartStart GPS solution that adds in asset tracking, social networking through Facebook, and geofencing to the Viper SmartStart solution. Specific features included with the SmartStart GPS Secure Service plan ($5/month) are vehicle locator, social check- in, speed alert, and lockdown alert. Upgrade to the Premium Secure Service Plan (under $6/month) and users get smart geofencing, hotspot zones for arrival or departure, and notification and curfew scheduling. SmartPark vehicle finder and Viper Motor Club roadside assistance are also included with the Secure Service Plan. Furthermore, the updated app also incorporates control of Alarm.com- enabled home security systems to arm and disarm the system. Although Viper is just a singular example, IHS iSuppli believes that majority of apps will come from third-party developers—every day, more and more apps get released on the iTunes store, Android Market, BlackBerry World, Windows Marketplace, and others. The growing app trend is led by its companion growth in smartphone devices—automotive is just one of the markets fueling the growth in this application space. Interestingly, Directed Electronics has announced a partnership with Octo Telematics in the U.S. for a separate program, and will likely utilize them as a TSP backend. Additional servers will likely be added in the future as Viper’s services expand into vehicle tracking. IHS iSuppli expects that revenues will increase for aftermarket telematics suppliers, although not confirmed with practical figures. This is due to the growth and proliferation of smartphone devices as well as added consumer awareness of vehicle tracking, telematics, and location-based services.

Automotive OEM players have a unique proposition in the app world, as both vehicles and smartphones are (by nature) mobile and the combination of the connected mobile device and the vehicle can be very powerful. Whether completely software based or hardware-required, vehicle- centric apps are poised for major growth. OEMs, suppliers, and other automotive value-chain players will likely get involved and reap the rewards of mobile connectivity, with the users experiencing an automotive eco-system like never before.

Traffic/Navigation/LBS Apps This category of apps generally includes location-based services, navigation, traffic monitoring, and Figure 5: Traffic/Navigation/LBS Apps even weather reporting. As shown in Figure 5, other apps in this category could help the user with local search, fuel prices, movie listings, parking availability, and more. With all of the mapping and navigation apps, plus specific traffic and LBS apps, this category represents a large majority of the vehicle-centric app market.

Figure 5: Traffic/Navigation/LBS Apps

Source: IHS iSuppli | August 2011

INRIX Traffic! is one of the more comprehensive apps. Following an introduction on the iOS, the now Android-compatible free app partners with Clear Channel's Total Traffic Network to deliver up-to-the-minute traffic incident and road condition updates (including construction, accidents and other on-road events).Copyright  2011 iSuppli Corporation, a Company which was acquired by IHS Inc. All Rights Reserved. Confidential – Patents Pending The comprehensiveness factor is increased as INRIX includes other traffic-influencing events, which offers users predictive traffic as well. These events range from sporting events and concerts to items like the legislative calendar in Washington, D.C. These events can significantly affect drive times, and knowing when and where these events happen will help users better plan their routes. In terms of user-interface (UI), the app is simple, but it is also one of the most complex traffic apps on the market. Another example, the AVIC FEEDS App from Pioneer, enables a user to find a destination and then transfer it to a Pioneer navigation system for turn-by-turn directions. Compatible with Pioneer AVIC- X920BT and AVIC-Z120BT modules, the user is also able to search through surrounding POIs and even save geo-tagged photos as POIs for later use.

Automotive Research The Connected Car—In-Vehicle Apps for the Future

Figure 6: AVIC FEEDS App

Source: Pioneer | August 2011

Eco/Diagnostics Apps Figure 7 shows a list of Eco/Diagnostics apps, which are gaining momentum with the proliferation Figure 7: Eco/Diagnostics Apps of electric vehicles (EVs). This category of apps is a bit more limited than others for the aftermarket, as it generally requires a hardware connection into the vehicle. This can range from a $500 data communications module to a $20 OBD II plug-in dongle. Other apps in this category can display performance ratings, critical system diagnostics, and more.

Figure 7: Eco/Diagnostics Apps

Source: IHS iSuppli | August 2011

One example is the Ecogyzer app from Nomadic Solutions. This app is mainly software driven, offering a solution for the monitoring of eco-driving behavior without a direct vehicle connection. It relies on the device's 3G connectivity and GPS using Windows Mobile 6.X. With only this, the Copyright  2011 iSuppli Corporation, a Company which was acquired by IHS Inc. All Rights Reserved. Confidential – Patents Pending Ecogyzer app can inform the user of driving behavior, mileage, estimate of fuel consumption, speed, and amount of acceleration and braking.

FigureEntertainment 8: Entertainment Apps Apps While this section is easily the largest app category on most app stores (due to the popularity of games), it is not as large when considering the in-vehicle environment. Free application games are fun, but not nearly as relevant for the driver, not to mention being a major distraction.

Figure 8: Entertainment Apps

Source: IHS iSuppli | August 2011

Within entertainment apps, Internet Radio is the most relevant for in-vehicle use. In the U.S., Internet radio like Pandora, iheartradio, Slacker, and Spotify are in direct competition to standard broadcast radio and subscription-based satellite radio. Only now with the growing wireless bandwidth have these Internet radioCopyright stations  2011 iSuppli seen Corporation, this a Company type whichof wasattention acquired by IHS in Inc. the All Rights vehicle. Reserved. ConfidentialPlus, the – Patents audio Pending can be rendered in the vehicle with only a 3.5 mm auxiliary input or Bluetooth A2DP.

Internet Radio Pandora may as well be the de facto cloud-based application with most OEMs and aftermarket head unit suppliers trying to integrate it first. Like many aftermarket and OEM suppliers, Pioneer made available a free PandoraLink app which requires an appropriate aftermarket infotainment head unit to enable a wireless link between the head unit and the phone for Pandora radio integration. Pandora makes its service available through a variety of distribution channels. In addition to streaming its service to PCs, Pandora has developed applications for smartphones and has partnered with the makers of over 200 consumer electronics devices, including Alpine, Panasonic, Pioneer, Samsung, and Sony. Pandora has also developed relationships with major automobile manufacturers, including Ford Motor Company, Mercedes-Benz, and Mini (BMW Group), and with suppliers to major automobile manufacturers to integrate the Pandora service into current and future automotive sound systems. In addition, General Motors, Hyundai, and Toyota have publicly announced their plans for future Pandora integrations. In terms of cloud-based entertainment services (via smartphone entertainment apps), automotive OEM requests are heavily centered on Internet radio apps such as Pandora. IHS iSuppli believes that the emerging mobile OS vendor-initiated cloud-based music services will not be a standard feature in vehicles anytime soon. However, when demand increases in the mobile space for such major OS vendor cloud-based music services, OEMs will start asking for integration of those cloud-based apps in the head unit platform sooner rather than later. Apple’s iCloud will most likely be the first requested service from OEMs, due to its higher anticipation of ecosystem growth from the mobile consumer side, while Amazon will be the easiest service to integrate in terms of openness of the API and its historical success in deploying many cloud-based APIs. On the other hand, Google's Music service faces difficulties in making automotive-grade HMI, as Android APIs heavily rely on web-based UI instead of app-based UI. Also, it is highly likely for BMW to be the first OEM to integrate an iCloud music service into its head unit due to its historical ties with iOS APIs (i.e., iPod Out).

OEM Smartphone Apps Automotive OEM-branded apps encompass a host of functions including remote telemetry, remote vehicle control, owner profile information, and vehicle finder solutions. Examples of OEM- branded telematics apps include the Mercedes-Benz mbrace, OnStar RemoteLink (previously OnStar MyLink), Lexus Enform Mobile, BMW My BMW Remote, and others. For those telematics solutions like OnStar and mbrace, the ability for users to access and utilize their subscription via their phone increases relevance and overall usage, which directly affects subscription renewals. The emergence of Electric Vehicles (EVs) has also highlighted the role that automotive OEM smartphone apps can play in managing one’s vehicle. At the end of the day, these apps give their respective brands a boost in consumer perception; users of a highly-connected car will enjoy the experience and are more likely to spread the news and the wow-factor. Figure 9: ThisMy sectionBMW highlightsRemote theApp OEM branded apps in alphabetical order of the automotive OEM.

BMW The My BMW Remote app is available via Apple iTunes for all European countries that offer BMW ConnectedDrive services. The new My BMW Remote app offers remote door lock/unlock, remote HVAC control, a vehicle finder, and a Google Local Search function that enables users to transfer an address or POI directly to the in-vehicle navigation system. In addition, users can activate the vehicle horn and lighting systems to make it easier to locate the vehicle in a large parking lot.

Figure 9: My BMW Remote App

Source: BMW | August 2011

BMW also noted that the app can be linked to more than one vehicle with only model years 2008 and 2009 able to make use of the remote door unlock/lock function and Google Local Search. The BMW 5 and 7 Series, as well as the new X3, can access all functions as long as the vehicle is equipped with the Business or Professional grade navigation system plus Bluetooth interface. The ConnectedDrive services are free for six months to three years depending on the contract.

Ford Copyright  2011 iSuppli Corporation, a Company which was acquired by IHS Inc. All Rights Reserved. Confidential – Patents Pending Ford announced its MyFord Mobile app at CES 2011, enabling Focus Electric drivers to maintain vehicle connection even when away from the vehicle. This is the first time Ford will utilize an embedded communications design with its SYNC system. MyFord Mobile works via a smartphone app or secure website. Owners can use any connected mobile phone with a data plan or a computer (when not operating the vehicle) to obtain charge status, program vehicle charging, locate charging stations send the location to the vehicle, receive alerts on vehicle charge status, remotely lock/unlock doors, and download performance and system data. In addition, owners will have a feature from Microsoft that lowers costs by enabling customers to recharge their vehicles at off-peak rates from their utility company. Ford is working with charge station manufacturers and MapQuest to provide Focus Electric owners with the most current, comprehensive station information. At launch, MyFord Mobile content will be available from the respective smartphone app store or via the web.

GM The OnStar RemoteLink app is available on the Motorola Droid, Apple iPhone, and BlackBerry Storm for remote real-time connected OnStar services and vehicle control features. OnStar RemoteLink was developed from the ground-up by engineers in the OnStar EV Lab, in addition to third-party application developers. Figure 10: OnStar RemoteLink App The application displays state of charge (%), plug status (in or not), voltage at plug (120V or 240V), EV miles and range, odometer, and time to charge. Vehicle control functions include remote door unlock/lock, remote horn and lights, remote start, HVAC control, and charging. The application will be fully serviced for MY 2011 vehicles, starting with the Volt.

Figure 10: OnStar RemoteLink App

Source: OnStar | August 2011

GM has also developed brand-specific mobile apps that leverage OnStar technology, enabling subscribers to operate functions like remote start, horn and lights, and door lock/unlock, and a vehicle finder from their smartphones. The apps also provides diagnostic-like fuel level and range, remaining oil life, current and recommended tire pressure, and lifetime average MPG; in addition to vehicle informationCopyright like  2011 currentiSuppli Corporation, odometer a Company which readings, was acquired by vehicleIHS Inc. All Rights VIN, Reserved. OnStar Confidential –accountPatents Pending numbers, and a one-touch OnStar advisor access. OnStar officially announced the expansion of its OnStar RemoteLink app technology for use with most 2011 Chevrolet, Cadillac, Buick, and GMC products with the Gen. 9 OnStar hardware.

Mercedes-Benz Available features for the Mercedes-Benz mbrace app include remote door lock/unlock, vehicle finder, call roadside assistance, Call mbrace Response Center, Call MB Financial Services, search for local dealers, view dealer information, and review mbrace account information. The mbrace mobile app version 1 is free of charge and available for iPhone and BlackBerry devices. It requires iPhone running iOS 2.2.1 or later, Blackberry Curve 8300 and 8800 series running OS 4.5 or later. The mbrace mobile app version 2 is available free of charge on iPhone only and includes all available features in version 1 plus Mobile Concierge (requires mbrace PLUS subscription), location with roadside assistance call, and lets the user save multiple accounts.

Automotive Research The Connected Car—In-Vehicle Apps for the Future

Figure 11: Mercedes-Benz mbrace Mobile App

Source: Mercedes-Benz | August 2011

Nissan Nissan offers the Nissan Leaf Remote Control app for the iPhone as a free download from the iTunes App Store. The app enables drivers to call in to their vehicles and check things like lithium-ion Figure 12: Nissan Leaf App battery status by linking up to the Leaf's built-in IT system and relaying the status of the batteries directory back to the screen. The app also enables Leaf owners to start up their air-conditioning unit before they enter the car. Finally, the app enables drivers to directly call the Nissan EV Customer Service Center. Copyright  2011 iSuppli Corporation, a Company which was acquired by IHS Inc. All Rights Reserved. Confidential – Patents Pending The app was released in the U.S. in May 2010.

Figure 12: Nissan Leaf App

Source: Nissan | August 2011

PSA Citroen eTouch now includes an iPhone app for multiple functions. The app, which can be downloaded from the iTunes store, includes information for the eco-driving function and a telediagnostics function found on the Citroen telematics services. The eco-driving function notes how much CO2 the drivers

are emitting, whatCopyright their  2011 weekly iSuppli Corporation, emissions a Company whichare, was how acquired they by IHS Inc.compare All Rights Reserved. to previousConfidential – Patents weeks, Pending as well as how they compare to other Citroen eTouch users. The telediagnostics feature alerts drivers to problems they should have checked out over several different areas of the car. It includes driver assist functions, security functions, the motor, and the braking system. The app can be downloaded from iTunes in any country but only in English and French, while the Citroen eTouch services are found in every country that Citroen offers telematics.

Automotive Research The Connected Car—In-Vehicle Apps for the Future

Figure 13: Citroen eTouch App

Source: Citroen | August 2011

Peugeot used the 2010 Paris Motor Show to officially debut the customer ready version of the Peugeot iOn. The rebadged Mitsubishi i-MiEV includes include Peugeot Connect, USB, Bluetooth, MP3, and CD. The Peugeot Connect services will include the usual automatic crash notification, roadside assistance, and SOS calling. On the iOn there will also be a fleet telematics services for companies, and an app that enables drivers Copyright  2011 iSuppli Corporation, a Company which was acquired by IHS Inc. All Rights Reserved. Confidential – Patents Pending to check their charge level. The app is called Electric Driving and can be used via the user's smartphone or PC. The app is scheduled to be released in spring of 2011.

Toyota Launched in October 2010, the Lexus Enform Mobile app gives subscribers access to parts of their telematics subscription via their mobile device. The Lexus Enform Mobile app enables users to send destinations to their vehicle navigation system; plan, review, and share their entire road trip from their Figure 14:phone Lexus to Facebook, Enform Mobilecall for roadside App assistance, and find nearby dealers and learn about information on their vehicle including videos, as well as access the online Owners Portal for Enform users. Tweddle Group Technologies worked with Lexus to develop and deploy the free app. The app can support multiple vehicle subscriptions (for those users with more than one Enform-enabled Lexus vehicle). The app is available for the iPhone, iPod touch, and iPad (iOS 3.0 or later) and will also be available for download from the Android Market and BlackBerry App World. The app is available to anyone but requires a subscription from LexusDrivers.com for a customized feature access.

Figure 14: Lexus Enform Mobile App

Source: Toyota | August 2011

FigureVolvo 15: Volvo On Call App Late in 2010, Volvo released its On Call app in cooperation with Cross Country Automotive Services (CCAS). While On Call used to be a monitored telematics service in North America, it currently provides only roadside assistance for Volvo owners including towing, routing, lockout assistance, and more and is compatible with the iPhone.

Figure 15: Volvo On Call App

Source: Volvo | August 2011

In June 2011, Volvo released its remote telematics app for On Call across Europe in countries where On Call is already available. The app was originally released in Sweden in early 2011 and is currently available as a free download from both the Android Market and iTunes Store. The application enables users to locate their vehicle, check the status of the windows and doors, lock/unlock the doors, remotely start the heater, display vehicle information (VIN and registration), and theft alert. Copyright  2011 iSuppli Corporation, a Company which was acquired by IHS Inc. All Rights Reserved. Confidential – Patents Pending Other features include a virtual dashboard that enables the user to view at the fuel level, odometer, trip meter, average fuel consumption, and average speed. The driver's journal feature enables users to download trip detail from the past 40 days and store it as an Excel file. Also available is a car check feature that performs a "health check" on the vehicle and notifies the user about lights, oil level, coolant level, brake fluid level, and oil pressure.

OEM Integration of Mobile Apps into the Head Unit Rather than just creating apps for smartphones, automotive OEMs are also bringing app integration solutions into the vehicle. A handful of OEMs and aftermarket system providers—Ford, Toyota, BMW (Mini), Nokia, Harman (Aha Radio) and Pioneer—have successfully implemented mobile device app integration in the car.

SYNC AppLink Ford has realized mobile app integration in its SYNC platform at the production level earlier than any other OEM. SYNC AppLink, an industry-first software application, gives SYNC users hands-free voice control of their smartphone apps. Ford announced that the iPhone, BlackBerry, and Android- based smartphones will be compatible with AppLink. SYNC AppLink is available for the 2011 Ford Fiesta and 2012 Ford Mustang, Fusion, Fiesta, F-150 Super Duty, Expedition, E-Series, and Shelby GT500. Pandora Internet radio, Stitcher news radio, and OpenBeak are the first SYNC-enabled mobile apps. Ford provides its SYNC SDK to third-party smartphone app developers individually. End-users can download SYNC-supporting smartphone apps from the user's respective smartphone app stores. However, depending on mobile platforms, the end-user usability of SYNC-supporting mobile apps can be different, and Ford must track cross-platform compatibility of individual apps. Meanwhile, Ford continues to grow the app developer community through its SYNC AppLink platform. Through its dedicated SYNC developer website, Ford has a direct connection to the app developer community where Ford received 2,500-plus app developer requests for its SDK. With the SDK, developers can modify an existing app or create an all-new app that can interface with Ford SYNC through AppLink.

Categories under Ford consideration include personalized entertainment, personalized information and news, LBS including navigation, traffic and business searches, notifications and alerts leveraging the SYNC ability to mash up vehicle information, GPS locations, and more; to provide the driver with customized information and guidance, scheduling and planning apps that may include flight status. In addition to this, Ford also announced a plan to quadruple its global connectivity team and grow its app developer network. Ford expects to grow the global Connected Services Solutions Organization fourfold over the next four years, with a threefold jump for U.S. operations alone.

Toyota Entune In the summer of 2011, Toyota will launch Entune, developed by Tweddle Group—a mobile device- driven solution that brings Pandora, iheartradio, OpenTable.com, Movietickets.com, and Bing Local Search functions into the vehicle head unit on the Prius V and Camry. At the 2011 CES, Harman International first announced its new scalable automotive multimedia head unit in cooperation with Toyota, featuring Entune—Denso is the other supplier for Toyota that integrates Entune into its head unit. Toyota drivers will need to download the Entune mobile app on their Bluetooth enabled phone and pair it with the Entune-enabled system.

FigureAs 16: shown Toyota in Figure Entune 16, end-users need only download the app once, as the one app acts as a cloud- based app aggregator and end-users will not need to check the Entune app compatibility with their phones or cars. Toyota can avoid mobile platform fragmentation issues as long as they manage/ control a certain set of developer partners. However, developers need to work closely with Toyota/ Tweddle to ensure cross-platform portability of cloud-based content.

Figure 16: Toyota Entune

Source: Toyota | August 2011

BMW/Mini Connected BMW is very committed to the process of integrating apps into the vehicle. BMW Connected enables users to read Facebook and Twitter feeds and features a Web Radio application, all made possible Copyright  2011 iSuppli Corporation, a Company which was acquired by IHS Inc. All Rights Reserved. Confidential – Patents Pending via the user's iPhone. The Connected Drive Group has also announced that it is working on a BMW Connected application for Android and BlackBerry devices, to reach more customers. The same ap- plies for its My BMW Remote application, which is currently only available via iTunes. BMW of North America announced in April 2011 that all MY2011 and 2012 BMW vehicles equipped with the BMW Connected Apps option will be able to stream Pandora Internet radio through the iPhone app. Once the iPhone is connected to the vehicle via a USB cable (or through the center arm- rest with an available snap-in adapter), Pandora radio functions are operated by the vehicle's existing controls, with an on-board monitor and functionality including the ability to access existing stations, create new stations, thumb-up or thumb-down tracks, and bookmark songs. The BMW Apps feature has an MSRP of $250.00.

In addition, BMW noted that it is also working on a Pandora-like application for Europe, rather than just offering its web radio application. BMW is also looking into third-party app development, and plans to release an SDK in the foreseeable future.

Figure 17: BMW Connected

Source: BMW | August 2011

BMW’s Mini also has Mini Connected, which provides the basis for smartphone integration and features telecommunications, entertainment, and online functions of a smartphone when in the car while minimizing driver distraction. The Mini Connected system tethers Apple devices through a 30-pin-connector on one end, and a USB and Aux-in on the other end. Also, Mini Connected Plugin supports Apple's iPod out that enables Mini to display an iPod navigation menu in the vehicle's display and control the music playback features of the iPhone, the iPod touch, and the iPod nano by using the existing vehicle controls.

Figure 18: Mini Connected

Source: Mini | August 2011

Available from Apple's App Store, the Mini Connected app integrates functions and can be operated using the vehicle's HMI, such as joystick, steering wheel buttons, and on-board monitor. The Mini Connected App enables iPhone users to integrate the entertainment and online functions, like access to Web radio, news, Twitter, Facebook, Google Send to Car and Local Search, as well as Mini-specific driving style and situation apps (MiniMALISM Analyzer, Mission Control, and Dynamic Music). Updates to the app are done via the App Store.

Following are brief descriptions for each app: • Web radio enables the iPhone to receive online radio stations from around the world. Drivers can browse stations by genre, country, and favorites. • News updates are available via RSS and displayed on the head unit screen. • Twitter: The latest tweets are shown, and preprogrammed messages can also be posted from the car. • Facebook status and “Like” button, as well as posting using preset updates. • Google Send to Car: Get destinations sent from Google Maps website directly to the Mini navigation system. • Google Local Search: Search for POIs near current location, and transfer the address direct to the Mini navigation system. • MiniMALISM Analyzer: Analyses driving style, and awards points for fuel-efficiency, acceleration, braking, and gear changes. Drivers can view their own score and compare it to other members of the Mini community.

Auto Infotainment Content Overview The following table shows an overview of auto infotainment content. The first section lists current high-volume and popular apps. Several winners are in the navigation/LBS category and include on- board and off-board navigation and traffic information. Access to digital music on MP3 players and smartphones are also popular, as are remote diagnostics. Future winners are likely to be mobile search, Internet radio, social network apps, and apps that offer money savings via coupons and mobile ads. The third section lists a few interesting issues. Table 1: Auto Infotainment Content Overview

Key Information Other Information Current High Volume Winners • In-vehicle on-board navigation • Tailored system SW apps • Off-board navigation • Mostly via MP/SP; telematics app • Traffic information (w/wo probe) • Broadcast & 2-way • LBS content • Weather, parking, red-light camera • Digital music • Mostly via MP3 devices & SPs • Remote diagnostics • Increased car resale value • ACN or eCall • Included in most telematics systems • Communication • Voice, Email, texting, IM, Tweets Future Winners • Mobile search apps • Need to understand travel direction • Internet radio • Streaming and cached music • Mobile ad, coupons etc. apps • How to address distraction issues? • Social network LBS apps • Facebook-type or Foursquare-type? • ECU software upgrades? • Not if-question, but when Other Issues • How many content segments? • Will there be a “long-tail” effect? • How many apps per segment? • Probably many similar products • SP apps dominance-how long? • Auto vs. Smartphone apps • What auto platforms will lead? • GENIVI, Android, MS Auto, QNX Source: IHS iSuppli |

Search Engines: Local Search & Send to Car IHS iSuppli sees content as a driving force for future apps. Even before the launch of in-vehicle apps, local search as a means of searching for relevant content such as for points of interests (POIs) in a navigation system has become an efficient way for drivers to find up-to-date content.

Local Search Google, Bing and Yahoo! offer a location-based search service that includes local business information and POI lookup. In August 2007, BMW was the first to add Google Local Search in Germany into its telematics services profile. As an addition to BMW ConnectedDrive, Google Local Search joined BMW Online, Assist and TeleService and was offered for free for the first three years. Since then, BMW has made Google Local Search available in any BMW with navigation and Assist telematics in North America for MY2010 and newer. In the second half of 2010, BMW launched Mini Connected in North America featuring a Mini Connected app that includes access to Google Local Search. Audi also utilizes Google Local Search as well as Google Earth and rolling Wi-Fi hotspot functionality, as part of its Audi Connect system which brings real-time user-relevant information into the vehicle. Meanwhile, Google Local Search services have been incorporated in Renault Carminat TomTom Live Services, the Toyota Touch&Go system, as well as in Mercedes-Benz Comand Online system in Europe. TomTom Live Services with Sanyo hardware is also offered by Mazda as an option on its new Mazda5 in Europe only. In addition to navigation and telematics services, Carminat TomTom Live system includes HD Traffic from TomTom and live weather updates. The Toyota Touch&Go system in Europe features navigation, eco routing, traffic, speed limits, and speed camera warnings. Drivers also have onboard connectivity to Google Local Search and destination routing through their smartphone. Finally, Command Online offers Internet access via the user's mobile device and integrated services include weather information, Google Local Search, as well as a Google Send to Car feature. Microsoft’s Bing location-based services feature can be found in the Toyota Entune app, Ford SYNC TDI services, and Hyundai’s Blue Link off-board navigation services. With ATX's off-board interactive voice response (IVR) system, Hyundai drivers can access Bing-supplied LBS content, including access to Bing Maps, POIs, addresses, restaurant ratings, gas prices, weather, and more. In 2007, Nissan and Yahoo! Japan announced the start of a new service that enables drivers to access Yahoo! Gourmet online via the Carwings navigation system in Japan. Yahoo! Gourmet provides navigation assistance to find restaurants and view information including images, reviews by other diners, and barcode coupons. Since then, Yahoo! Japan has been actively expanding its Yahoo! Everywhere coverage to cellular phones, television, and navigation systems. Yahoo! Local Search is available with Toyota G-Book mX/mX Pro solution that features Web Search Content which also includes Google Local Search. Honda Internavi solution also provides a feature called the Internet Link which provides Google Local Search and Yahoo! Gourmet services.

Send to Car In addition to Local Search solutions, Google Maps Send to Car feature enables users to send business listings and POIs directly to the vehicle’s built-in navigation systems. Google Maps Send to Car can be found in the following vehicles: OnStar Gen 8+ models (Buick, Chevrolet, Cadillac, GMC, Hummer, Pontiac, Saab, Saturn), Ford SYNC versions with TDI off-board services (MY2010+ Ford, Lincoln, Mercury), BMW Assist vehicles (MY2009+), Mini Connected vehicles (MY2011+), Mercedes-Benz vehicles with mbrace telematics (MY2010+), Audi vehicles with Audi Connect (MY2011+, A8, A7, A6, and more), Nissan CARWINGS systems in Japan, Honda Internavi systems in Japan, Citroen Vehicles in Europe with NaviDrive 3D head unit, and in the Hyundai/Kia Mozen telematics solution in Korea. In Japan, Toyota G-Book users can send Yahoo! location POIs from PCs and mobile phones to Toyota G-Book compatible navigation systems. In addition to Honda and Nissan offering Google Maps Send to Car feature, Yahoo!Drive User Generated Content (UGC) and Honda Internavi UGC

share POIs, and users can then send Yahoo! POI information to Internavi-compatible navigation systems. Nissan Carwings users can send location POIs from Yahoo! Japan’s WaiWai Map UGC to Nissan Carwings compatible car navigation systems.

What Is Mobile App Integration Mobile app integration in the car consists of two parts: HMI Integration and Content Integration. HMI Integration includes the physical, voice, displays, graphics, and menu structure & app design, whereas content integration refers to the third-party cloud-based app integration architecture and specifies single or multiple transport protocols between mobile devices and the in-vehicle head unit. HMI Integration • Physical HMI includes command and control from center stack buttons, steering wheel buttons, touch screen and/or joysticks. • Voice HMI includes in-vehicle or cloud-based speech recognition system (onboard/off-board) and TTS engine. • Display HMI includes on-board head unit display with or without touch screen, radio display, and Instrument Cluster Display (ICD). • Graphics HMI includes graphical user interface (GUI) with a brand-familiar fit and finish, which takes advantage of the high-resolution display, unique skin displayed on the head unit, unique graphics HMI integration method with VNC architecture. • Menu Structure & App Design HMI. Content Integration • Cloud app and content integration architecture. • Specifies wired or wireless connections such as USB, Bluetooth, or other interfaces. • Specifies single or multiple transport protocols between mobile devices and the in-vehicle head unit.

Content Integration Examples Content integration is being done by some OEMs like Ford who handle each third-party developer partner individually. But cloud-based content aggregation platform providers are emerging to ease the pain in the multiple integration process of cloud-based content. The next table shows examples of connected infotainment integrators. Table 2: Examples of Content Integrators

Company Key Information Aha Mobile • Harman owned, working around the industry (Harman) • Turns everything into a radio station • Location sharing, Facebook information, other content integrated via mobile phone • Significant future growth potential, yet competitor list is long Zypr (Pioneer) • Complete platform for content aggregation for car & other devices • Revenue potential is very high, if partners are interested in complete package solution Tweddle • Prior auto industry relations have lead to app development growth • Will continue to develop more apps, be more relevant, and “enable” technologies and content

Source: IHS iSuppli |

In order to integrate mobile apps into each proprietary auto infotainment system, auto OEMs or aftermarket head unit makers have to use multiple transport protocols (via BT/USB) between smartphones and vehicle head units (which will have multiple web app clients). A smartphone is then directly interacting with each web source via individual clients embedded in the head unit. This is not a good future-proof solution as it requires multiple integration efforts on each individual app, as well as ongoing software updates for the smartphone client.

Most importantly, such an approach does not provide transitions to embedded connectivity. This is where Aha Radio (owned by Harman International) and web app integrators/platform providers are coming in. They use the "cloud platform" where clients for each web source are maintained and interact with each web source on the cloud. They will use a single transport protocol/single app integration protocol between the smartphone and the cloud-based platform, which will lead to the same process between the vehicle head unit and smartphone. Of course, OEMs still have to figure out vehicle HMI elements such as physical command & control, displays, voice, graphics, and menu structure & app design HMI around the head unit app.

Figure 19: Aha Mobile

Source: Harman | August 2011

Pioneer opened Zypr (formerly PAIS) – a voice-controlled device portal that normalizes the interface between Internet services and connected devices. As seen below, the initial release of Zypr features services such as natural language voice recognition from VoiceBox, weather from AccuWeather, restaurant recommendations and local search from Yelp, local travel and event search from Wcities, social networking from Facebook and Twitter, Internet radio from Slacker and Tuner2, and produc- tivity from Google Calendar. The platform also enables revenue sharing opportunity for device vendors with the potential to receive a percentage of revenue generated from consumer subscriptions, as well as advertising. According to Pioneer, the Zypr API simplifies connectivity for device manufacturers, enabling them to easily create mash-ups from multiple information sources, and giving them customization and control of the user experience without requiring the use of an app store. By accessing aggregated services in the cloud, device makers can easily handle the changing services. With device-agnostic cloud-based app integration, the user experience would be maximized as content would be able regardless of the device. The downside of device-agnostic cloud-based app integration is an unproven business model where ad-supported revenues are divided up amongst players.

Figure 20: Pioneer Zypr

Source: IHS iSuppli | August 2011

The Pioneer Zypr platform presents open-standard interfaces for voice UI, navigation and maps, local search, social networking, music & radio, and video & TV among other services. The Zypr platform is a device portal that normalizes the interface between the Internet services and connected devices by creating a common, stable method for accessing a wide array of constantly changing Internet service APIs. Zypr reduces the impact of service and API changes. This interface enables device vendors to add new service offerings quickly, eliminating the need for significant investment in proprietary solutions, and saving vendors from the pitfall of trying to guess the next killer app. The platform also enables a revenue sharing opportunity for device vendors, with the potential to receive a percentage of revenue generated from consumer subscriptions to basic and premium packages, as well as advertising. Zypr is device agnostic, meaning it is not dedicated to a single hardware platform, but instead is flexible enough to work with any device, and will enable a completely connected and aggregated user experience. As previously mentioned, Toyota Entune users must download the Entune software in order to run the Toyota-approved apps for use on the vehicle head unit. Toyota's Entune enables integration with mobile applications such as iheartradio, Pandora, Bing local search, MovieTickets.com, and OpenTable.com restaurant reservations via Bluetooth connectivity (SPP). Plus, the system will allow for in-dash app support enabling users to add new apps as they become available. Drivers can make hands-free phone calls and control several music sources like HD Radio all via voice commands, and a TTS function will read incoming SMS text messages as well. Voice control for those apps is not enabled yet, except for Bing local search, which includes voice search as part of the app. However, Toyota's Entune system will support voice HMI integration for such mobile app control in the future. It is interesting to note that Toyota announced most smartphones and even feature phones as compatible devices. Single app cloud-based aggregators provide simple one-to-one interface with one app to one head unit, enables vast amounts of cloud-based content into the car without incremental design work, and OEMs and Tier 1 suppliers still own relationships between a content provider and a car (interchangeable parts). Nevertheless, one of the disadvantages to using a single app cloud-based aggregator is that complicated apps require more complicated software running on the head unit. On the other hand, advantages to using cloud-based aggregation apps are minimal work on the part of OEMs or Tier 1 suppliers to integrate slews of cloud-based content while IVR technology enables users to access data easily, all while stored off-board. However, licensing fees could prove to be more expensive than other methods. IHS iSuppli believes that open and standardized integration platforms will ensure a broader participation from OEMs, Tier 1 suppliers, and third-party app developers. Currently, it is hard to do so as there are not many standardized platforms or integration systems.

At the end of the day, the most important thing is to ensure flexibility of future-proof mobile app/device integration platforms for automakers, which will be open and standardized software architecture-based systems, not hardware-dependent infotainment system.

OS and Middleware An important trend that is making apps integration feasible is the use of software platforms as the foundation of head unit and infotainment systems. This software platform is usually divided into two segments—operating system and middleware. The term middleware has been around for over 30 years, but was primarily used in legacy systems and is new in the embedded automotive software segment. The basic meaning of middleware is software that sits between the operating system and the embedded applications. The boundary between middleware and the OS is somewhat arbitrary and can vary by company and application segment. In large computer systems with large memory and disks, the operating system usually includes most middleware because most applications use a large portion the middleware functionality. In the large systems, middleware tends to be software that connected these systems into networks including the Internet. In smaller systems and especially in embedded systems, middleware functionally varies greatly between applications and product segments. Hence it is advantageous to remove middleware functionality from the operating systems and then include selected middleware functionality based on what applications are used in the embedded system. This also gave a big boost to application programming interfaces (APIs) that are now so prevalent in embedded automotive software. This trend has another major advantage as many companies can now compete in each middleware category and over time the so-called best-in-class for any middleware segment will have success and the lower quality version will disappear. Hence middleware is becoming a major trend and will see increasing importance in embedded systems and especially in automotive infotainment systems. The GENIVI Alliance is a good example of how the middleware strategy is being used to create a large community of middleware suppliers that will compete for Tier 1 and auto OEM businesses in infotainment systems.

Middleware Categories There are a variety of middleware categories emerging for embedded automotive software. It is important to notice that there is considerable overlap between middleware for automotive infotainment apps, consumer electronics and wireless devices. The functionality is similar and from the middleware suppliers' viewpoint, the market size is much larger. In many cases the automotive infotainment market is not large enough to interest middleware suppliers, at least not early in the market expansion phase. Here are some of the key middleware segments: Communication middleware: This type of middleware connects applications to wireless devices via Bluetooth or Wi-Fi which facilitates the download of cloud-based content. Or this could go via an embedded communication link to download cloud content such as email and messages, music, POIs, and navigation routes. German software company Jungo has announced a middleware solution that focuses on communication via 3G, 4G, Bluetooth, Wi-Fi, or USB for in-car infotainment and Internet connectivity. It also provides an open platform for easy integration with mapping and telematics applications, with support for a variety of operating systems including Linux, QNX, Windows CE, and ulTRON. Content middleware: Once the content has been transferred to the car's infotainment systems another middleware category has to render the content into an understandable form, such as a speaker for music and speech, or through a display for visual information. Content middleware has the largest number of developers such as Pioneer (Zypr), Aha Radio, iheartradio, Rovi, Gracenote and Tuneln Radio. Harman's Aha Radio platform also brings audio, web and social networking content into the vehicle through a voice-controlled HMI.

Web access middleware: This category includes web browsers and other programs that are used to access cloud-based content. There is a large variety of add-on software that is used within this category. Device driver software: This category can have an overlap with the OS, as in the PC industry where the device drivers are part of the OS. It is not clear whether the device driver software will be con- sidered middleware or OS in auto infotainment, possibly a bit of both. HMI middleware: This type of middleware overlaps with the HMI part of the application. HMI middleware includes text-to-speech (TTS) and speech recognition software. SVOX offers its one-shot speech-enabled address entry which is available on TomTom PNDs. SVOX’s solution shows the direction of how address entry should be implemented in all navigation systems, especially in-vehicle navigation systems. Other middleware: There are many other specialized middleware categories either in use or emerging. Software that emulates programs from other platforms is available and includes Java virtual machine emulators. Java is a way of levering programs that are available for many platforms but it usually has a performance penalty which for most programs does not matter. Virtualization software is another method of making old or legacy software run in a new environment. There will undoubtedly be other middleware categories emerging over the next few years. Meanwhile, the majority of the middleware in existence today is focused on communication and content as several players are showcasing their solutions.

Head Unit Integration Process & HMI The basic head unit HMI trends are important for future apps integration and the key trends are listed in Table 3. Speech is increasing in importance as it has less driver distraction than other current technologies. Speech recognition is particularly important for control and command functions, and text-to-speech solutions are growing in importance because it can give the driver information on a variety of subjects with relatively low driver distraction. Multifunction controls remain a technology for premium priced cars and it is not clear how pervasive it will be in future systems. Steering wheel controls are growing rapidly for head unit and smartphone related applications and seems to be very popular. Digital displays are also growing strongly and will be important for many functions including apps integration. The instrument cluster display has added multifunction digital display for information content. However, the long-term trend is to replace the traditional ICD with a full LCD. The head units are also increasingly connected to digital ICD displays and improve the HMI experience. Table 3: HMI Trends

Trends Comments Speech • Speech recognition as control input • TM HFI, Navi, others • Text-to-speech for output info • Navi, messaging, others Touch • Input control non-critical functions • Navi, comfort systems • Strong growth in USA & Japan • EU use is lagging Multi-Function • Pioneered by BMW and Audi • iDrive, MMI Control • Increasing use in Europe • BMW, MB, Audi, others • MF controllers on mid-range cars • Little use by US/AP OEM • Steering wheel controls: rapid growth • All regions Digital Displays • Partial digital ICD is common • Analog and digital ICD • Digital ICD emerging in luxury cars • Rapid growth likely • Digital ICD as multifunction output • Driver info, TM, ADAS, Navi • Continued center display growth • Navi, comfort systems • HUD remains niche until better tech • Only luxury autos • Dual-view will remain niche market • Cost premium too high • Rearview mirror has potential • First aftermarket; now OEM Source: IHS iSuppli |

OEM HMI Take-Up Rates Figure 21 shows the attach rates for key HMI technologies in the U.S. auto market. Speech recognition is the leader with attach rates growing from 45.5% in 2009 to more than 86% in 2017. Head units Figure 21: OEM HMI Take-Up Rate with displays (also called center displays) will grow from 19% in 2009 to nearly 58% in 2017. Touch input is primarily used in navigation systems and is projected to grow from 9.6% in 2009 to more than 36% in 2017. Full LCD-based instrument cluster displays will start slow, with primary usage in luxury autos and will only reach a 13% attach rate in 2017.

Figure 21: OEM HMI Take-Up Rate

90%

80%

70% ICD LCD 60% Touch Input 50% Millions 40% H-U Display

30% Speech Input 20%

10%

0% 2009 2011 2013 2015 2017

Source: IHS iSuppli |

HMI Trends for Mobile Apps In terms of app integration, Figure 22 shows how cloud-based apps ( including Internet radio) are brought into the vehicle. The example on the left side of the chart is physical connectivity while the

one on the ride sideCopyright is where  2011 iSuppli the Corporation, app isa Company running which was onacquired the by IHS head Inc. All Rights unit. Reserved. Confidential – Patents Pending

Figure 22: HMI Trends for Mobile Device Integration

Source: IHS iSuppli | August 2011

It is the assessment of IHS iSuppli that the approaches where apps run natively on the head unit are the most complex to implement, but provide an OEM with the greatest control over the HMI. The examples on the left side are the easier approaches to implement and faster to market, but provide less control over the HMI.

In-vehicle smartphone tethering takes advantage of hardware resources, such as the head unit, already available inside the car, resulting in more accurate control for an OEM when it comes to safety and driver distraction issues. Other advantages of direct head unit integration include: maximized device compatibility—as API is integrated once an app is downloaded, and the ability of OEMs and Tier 1 suppliers to collaborate with the app developer on design specifics. However, direct head unit integration leads to OEMs and Tier 1 suppliers taking on a lot of developer community nurturing, as well as requiring more time and resources to develop each additional application.

Apple iPod Out BMW announced its support for the new iPod Out feature released in iOS 4. It provides BMW and Mini drivers with an intuitive way of using their iPhone and iPod Touch in vehicles. iPod Out enables BMW and Mini entertainment systems to display and control the music playback feature of the iPhone and iPod Touch directly within the vehicle's main display. In other words, the menu structure or user interface of the Apple device is rendered on the in-vehicle display. The integrated iPod navigation menu can be safely operated through the vehicle's controls, and utilize all playlists, including the "Genius" feature. Genius creates a playlist of songs based on selections from the user's library. Vehicles equipped with this technology will be able to adapt more quickly to the software lifecycles of the iPod touch and iPhone.

RealVNC's VNC Mobile Solution for Automotive The VNC Mobile Solution for Automotive is an OEM package that supports a range of in-vehicle embedded operating systems including Linux, Windows Automotive, CE, QNX, Qt, Android, and other proprietary operating systems. The VNC solution permits mobile devices to be automatically detected, accessed and controlled through the head unit touch-screen, hard keys, or steering wheel controls as they enter the vehicle. Clarion is integrating the VNC Viewer into its next-generation HMI design embedded within the vehicle head unit. RealVNC continues to provide cross-platform solutions with leading mobile devices supported, including Windows Mobile, Symbian, Blackberry, iPhone, Android, WebOS, and Linux. Clarion has licensed RealVNC's VNC Mobile Solution for Automotive to implement terminal mode. Jungo and RealVNC announced a partnership to provide connectivity between personal mobile devices and in-car infotainment systems. Jungo will provide its Automotive Connectivity Middleware and RealVNC will offer its terminal mode solution. The combined Automotive Connectivity Middleware and VNC Mobile Solution for Automotive enables the head unit to detect, access and control mobile devices in the vehicle and show their un- modified content on the dashboard display. This solution features VNC's remote access and control together with device connectivity, media and network management, and USB and Bluetooth protocol Figure 23: Terminalstacks from ModeJungo. The RealVNC Mobile Solution for Automotive supports a wide range of mobile operating systems and legacy devices, also providing support for handsets that allow terminal mode. One of the key benefits of the proposed solution is that it is able to filter unsafe applications so that they cannot be run while driving.

Terminal Mode Terminal Mode is specified around a set of non-proprietary standards. It uses IP technologies in order to be independent of the physical transport mechanism. Legacy wireless car connectivity solutions like Bluetooth HFP or A2DP are supported, as well as wired connectivity. Besides Bluetooth, audio can be streamed using the Real-Time Protocol (RTP) over User Datagram Protocol (UDP).

Figure 23: Terminal Mode

Source: Nokia | August 2011

On top of unlimited access to the mobile device’s user interface, Universal Plug and Play (UPnP) is used to give access to only a limited set of applications and Virtual Networking Computing (VNC) is used to replicate the phone’s display. Nokia's Terminal Mode can either make all apps available for fast integration of new apps with re- stricted access while driving, or add car specific apps by extending existing apps for optimal usage in cars... The greatest benefit of this system is its protocol-invariant and standardized integration (both mobile platform and auto infotainment operating system agnostic). Nokia announced the creation of the Car Connectivity Consortium to focus on new in-vehicle technologies that employ standards like Terminal Mode and near field communication (NFC). The Car Connectivity Consortium is an open alliance that focuses on cross industry contribution. Founding members of the consortium include Daimler, General Motors, Honda, Hyundai Motor Company, Toyota, Volkswagen, Alpine, Panasonic, LG Electronics, Nokia, and Samsung. The Car Connectivity Consortium will focus on further developing the Terminal Mode standard, and address certification and branding. At the 2011 International CES, Continental showed that it is working with Nokia on Terminal Mode technology to enable drivers to connect, display and control mobile phone applications via an in- vehicle display to improve the usability of services, such as telephony, navigation, social networking, and music. Funkwerk Dabendorf demonstrated the integration of smartphones in the vehicle and brought its version of Terminal Mode at the 2011 CeBIT show in Hanover, Germany. Using the flexible software architecture, applications can be controlled using the controls in the vehicle, while the vehicle's existing cockpit display and speakers are used for visual and audio output. The Funkwerk Mobile Device Management Software Framework enables fast interfacing of new devices and apps with the central infotainment system. The interface between the smartphone and infotainment system uses three protocols in Terminal Mode. The screen content of the phone is projected onto the head unit over VNC, then the head unit returns all control commands back to the smartphone. The audio transmission runs over RTP & BT (Real-Time Protocol & Bluetooth: Hands Free Profile, A2DP) while UPnP permits phone apps certified by Terminal Mode. The data transfer takes place by means of Internet protocol via a WLAN connection. Johnson Controls (JCI) introduced its newest center stack design that involves a plethora of in- vehicle infotainment and connectivity and will be available in MY2014 vehicles. The technology in the center stack includes natural language voice recognition, music playback via A2DP or USB, access to various apps like Pandora, access to JCI-developed phone apps, GPS and LBS services, and upgradable architecture for software updates and new software applications. Also included will be various Bluetooth profiles such as HFP, PBAP, A2DP, and phone-book image transfers and text/e- mail messaging via text-to-speech. JCI will be including Nokia Terminal Mode HMI as well, which means that the HMI on the center stack will mimic the user's smartphone. One interesting note is that JCI will be developing their own apps to use on the center stack, rather than allowing access to apps already on the market like those from Apple’s App Store or the Android Market.

DirectVoxx DirectVoxx’s SmartDock takes a Terminal Mode like approach as it uses virtualization technology that enables smartphone applications to run alongside native apps on embedded devices, supporting a variety of connected and remote control scenarios. For example, an Internet radio application running on an iPhone or Android handset can appear as another media source on an in-car infotainment system, providing tuning and playback control through the in-car HMI just like AM/FM or satellite radio. Even graphically-intensive applications like turn-by-turn navigation can run over the SmartDock link, eliminating the need for multiple special purpose device docks in the car or expensive in-car GPS solutions. In its initial release, SmartDock will support the iPhone and Android platforms, with additional smart phone device support to follow in the future.

The Role of Media Tablets One of the main disadvantages mobile and smartphones have when brought into the car is the screen size. Both driver and passengers are usually passive with regards to incoming data in a way that they absorb and consume information and media, but do not create content. For these reasons, media tablets could be the next future consumer devices to be massively adopted (and adapted) by OEMs. Unlike PCs, laptops, and Netbooks that target creation of content, the purpose of media tablets is to communicate, browse, search, read information, and enjoy media and social networks. In addition, media tablets are distinguished from other devices in that tablets are essentially only a touch screen. This peculiarity, along with a missing keyboard, confirms that tablets are focused on content consumption rather than creation. Furthermore, additional advantages of tablets are that they can amplify functionalities already present in handsets, while removing usability disadvantages of those same handsets. For example, their screen size allows a more comfortable browsing of various applications and an easier access to menus and services via a more intuitive and user-friendly interface. Having already experienced the second generation Apple iPad 2, consumers have contributed to a thinning-out of unnecessary features and functionality after much market feedback. Even aggressive competition, which many companies managed to set up, fostered improvements and helped mature adoption of tablets in the automotive segment. Meanwhile, a number of specialized companies are providing tablets, as well as smartphones with vehicle-centric applications. Location-based, maps, POI, augmented reality and social networking appls already found in said consumer devices are poised to spread quickly as they take advantage of Internet access and communication capabilities ranging from Wi-Fi to 2G, 3G or LTE technologies. For example, Luxoft has created an Android-based software platform called LUXnet. The software platform was introduced at the 2010 Telematics Update Munich event. Features on the platform include social networking, navigation, multimedia and connectivity services, dynamic POIs, and voice over IP (VoIP). LUXnet supports BeagleBoard-compatible hardware platforms, and works with a variety of interfaces, including CAN, HDMI, USB, SD cards, 3G, Wi-Fi and Bluetooth. LUXnet is designed for in-car social networking and dynamic navigation use, and comes with integrated Facebook and Twitter capabilities. Additional LUXnet features include: Internet connectivity, support Figure 24: DroidBuzzfor application downloads, intelligent data caching and geocaching. LUXnet is a software platform that can be used on either in-car infotainment systems or portable navigation devices. Luxoft has also announced the availability of the new Android-based software platform developed specifically for rear-seat entertainment (RSE) systems. The new DroidBuzz, a prototype which can be seen in Figure 23, is based on Android 2.2 Froyo. Due to its low-cost high-performance ARM hardware platform, DroidBuzz can work on a variety of MCU modules from different vendors. The Luxoft software platform also enables multimedia and online connectivity features, along with the support of regular Android applications to the RSE systems, head units, PNDs and other infotainment systems. The software is compatible with tablets, smartphones and other wireless devices using Android.

Figure 24: DroidBuzz

Source: Luxoft | August 2011

Copyright  2011 iSuppli Corporation, a Company which was acquired by IHS Inc. All Rights Reserved. Confidential – Patents Pending Automotive Research Figure 25: DroidBuzz UI Profiles The Connected Car—In-Vehicle Apps for the Future

As seen in the Figure 25, DroidBuzz supports 3G and Bluetooth connectivity, providing a tablet computer-like experience for car users by enabling them to surf the Internet, use social media networks, download content, and more.

Figure 25: DroidBuzz UI Profiles

Source: Luxoft | August 2011

Lately, Luxoft and Elektrobit Corporation (EB) have jointly developed a platform for a wallet-sized in-car media server. The device, designed by EB, features 2G/3G connectivity and GPS, and oper- ates as a DLNA server, Wi-Fi hotspot, and both Ethernet and USB host. In addition, it can be used as a mobile TV receiver, supporting DVB-T, DVB-H or other mobile TV standards through the use of an external antenna. Luxoft's client software ensures interactivity with the vehicle's head unit, rear seat entertainment systems, and Android, Apple, or Linux-based devices such as iPads, tablet PCs

and more. Copyright  2011 iSuppli Corporation, a Company which was acquired by IHS Inc. All Rights Reserved. Confidential – Patents Pending IHS iSuppli believes that integration of tablets into cars is a clear trend in near future, particularly when thinking about tablets as an additional screen to main head unit or to RSE systems. In the case of RSE systems, IHS iSuppli already sees Tier 1 suppliers and OEMs showing and designing such solutions. The clear advantage of tablets versus factory-installed RSE systems lies in the fact that factory-installed RSE systems so far are a luxury feature, and therefore not broadly deployed mainly due to cost considerations. Instead, integration of tablets into RSE systems would provide a solution to offer services and media content to passengers without increasing OEM costs and compromising safety. What tablets miss—and might be missing—is a standard solution in terms of connectivity which would let passengers consume content not just generated by the tablet itself, but content streamed from a head unit as well. Such a limitation would not offer consumers an easy plug-&-play option for their tablets without having specific hardware adapters and proprietary software. The cost position of tablets might still not have reached the sweet spot for a wide distribution and introduction into vehicles. Nevertheless, competition will definitely push prices down and car manufacturers might benefit in terms of image and branding, offering its customers a comfortable and a low-cost solution to be entertained. Given its portability, the introduction of tablets into vehicles will also be facilitated via aftermarket (AM) channels and consumer quality levels. Specifically, such devices will be easily and comfortably removed from the car and will not experience environmental stress which could compromise device functionality and reliability. The current IHS iSuppli tablet research shows that over 17 million units were sold in 2010, which is forecasted to surpass 58 million in 2011 and to top 120 million in 2012 on a worldwide basis.

Apps Integration Forecasts The popularity of vehicle-centric apps will depend on several factors: One is the number of times an app gets downloaded; another is HMI integration potential to lower driver distractions while using the apps. As part of this report, IHS iSuppli has forecasted four apps segments that will be described in the next sections. These four segments have enough activity so that it is feasible to provide a regional and worldwide forecast. • Smartphone-based remote control functions • Internet radio apps integration • Social network apps integration • Head units with apps integration There will be many more apps that will be integrated to the apps head unit, but currently there is not enough information to provide a reasonable market forecast

Smartphone-Based Remote Control Smartphone apps for remote control (RC) functions are currently only available on cars with embedded telematics systems. The remote control apps that run on the smartphone communicate with the telematics service provider (TSP) to get the commands to be completed. Battery-electric vehicles (BEV) will also have such apps as they need to get information from the charging status and remotely start the air conditioner or heater while the BEV is still plugged in. The OEMs with smartphone RC apps in the U.S. include all GM brands, Mercedes-Benz, and Hyundai. In Europe, only BMW and Volvo have smartphone RC apps. In China, GM’s OnStar has introduced smartphone remote control apps. The next table summarizes the estimate of IHS iSuppli and forecast of smartphone remote control apps. Table 4: Table 5: Smartphone-Based Remote Control Auto Integration Sales

Unit Sales (000) 2010 2011 2012 2013 2014 2015 2016 2017 2018 USA 437 2,036 2,587 3,594 4,969 6,504 7,505 8,501 9,564 N. America 484 2,235 2,811 3,909 5,407 7,087 8,167 9,258 10,412 W. Europe 51 288 523 909 1,556 2,635 4,302 5,995 7,216 Asia Pacific 288 546 908 1,407 2,094 2,962 3,975 5,076 Other Regions 2 10 35 90 194 350 545 Worldwide 535 2,811 3,883 5,737 8,405 11,906 15,625 19,578 23,250 Source: IHS iSuppli |

The smartphone RC apps in the U.S. will grow from 430 thousand in 2010 to nearly 9.6 million in 2018 for a CAGR of over 44%. Worldwide smartphone RC app availability is forecasted to jump from 530 thousand in 2010 to over 23 million—a CAGR of 60%.

Internet Radio Apps Integration Music has been the leading entertainment category in the car for over 80 years and it will continue to maintain this status. However, the music sources in the car will continue to change with Internet radio emerging as a promising new in-car music source. Internet radio has two segments: genre and streaming radio stations. The genre type is currently the most popular segment with Pandora being the most prominent example. Other important genre- based music providers are Slacker, Spotify, and Last.fm. There are over 12 million songs available on the Internet and hence the genre type has a large supply to select from. The streaming radio channels are mostly actual broadcast stations that provide their radio streams to aggregators that provide thou- sands of stations to their customers. TuneIn, Live365, and iheartradio are some of the examples. The forecast shown in Table 6 shows the number of cars sold with Internet radio integration. Only systems that integrate or interface an Internet radio service to the head unit are included (smartphones with Internet radio that do not have a hands-free interface to the head unit are excluded).

There are already about 50 models in the U.S. that have Internet radio integration or will have for MY 2012. BMW, Ford, Lincoln, Mercedes-Benz, Scion, Buick, Chevrolet and Hyundai are the OEMs in the U.S. with Internet radio app integration. In Europe, only BMW and Mini offer Internet radio so far. In China, there are four Chinese luxury models that are in the process of adding Internet radio integration. Table 5: Internet Radio Auto Integration Sales

Unit Sales (000) 2010 2011 2012 2013 2014 2015 2016 2017 2018 USA 149 651 2,297 3,729 5,249 6,735 8,238 9,639 10,929 N. America 149 651 2,299 3,736 5,269 6,783 8,325 9,781 11,129 W. Europe 19 95 272 656 1,302 2,258 3,624 5,493 7,520 Asia Pacific 21 97 297 683 1,393 2,520 3,933 Other Regions 6 29 85 207 457 877 1,432 Worldwide 168 746 2,599 4,518 6,953 9,931 13,799 18,671 24,014 Source: IHS iSuppli |

Internet radio is clearly most important in the U.S. where the number of cars sold with Internet radio will grow from 149 thousand in 2010 to over 10.9 million in 2018—a CAGR of 71%. Worldwide Internet radio auto integration sales are projected to grow from 168 thousand units in 2010 to over 20 million in 2018, a CAGR of 85%. Figure 26: Regional Internet Radio Users Figure 26 shows the forecasted amount of in-car Internet radio users. This assumes a four-year life time of head unit Internet radio integrated systems. The Internet radio users in the U.S. are forecasted to grow from 800 thousand in 2011 to over 35.5 million in 2018. Worldwide Internet radio users are projected to grow from 900 thousand in 2011 to over 66 million in 2018.

Figure 26: Regional Internet Radio Users

30 USA

25 N. America

W. Europe

Millions 20

15 Asia-Pacific

10 O. Regions

0 2011 2012 2014 2016 2018

Source: IHS iSuppli |

Social Network Apps Integration Social network services have conquered the PC and smartphone markets and there is little doubt that the automobile is the next growth segment. Social network apps on smartphones are used everywhere, but for lower driver distraction these apps need to be integrated into the head unit or telemat-  ics system. Copyright 2011 iSuppli Corporation, a Company which was acquired by IHS Inc. All Rights Reserved. Confidential – Patents Pending The social network integration trend has started, and so far BMW, Ford, Mini, Hyundai, and Lincoln have done so in some of their MY2012 cars, with GM announcing they will offer social network apps integration in the near future. In Europe, BMW, Mini, and Mercedes-Benz are deploying social network apps. In Japan, Twitter is available on most Nissan models. In China, there are four Chinese luxury models that are in the process of adding social network apps integration. Table 6 summarizes the growth of social network apps integration sales by region. U.S. will grow from 330 thousand in 2011 to over 8.5 million units in 2018. Worldwide social network apps integration sales is forecasted to grow from 450 thousand in 2011 to 21 million in 2018—a CAGR of 73%.

Table 6: Social Network Auto Apps Integration Sales

Unit Sales (000) 2010 2011 2012 2013 2014 2015 2016 2017 2018 USA 66 334 867 1,766 3,093 4,501 5,913 7,288 8,588 N. America 74 372 955 1,937 3,384 4,921 6,451 7,952 9,363 W. Europe 19 48 130 331 731 1,438 2,553 4,073 5,804 Asia Pacific 9 27 71 196 449 898 1,690 2,960 4,451 Other Regions 6 31 95 227 494 904 1,426 Worldwide 102 447 1,163 2,495 4,658 7,485 11,187 15,889 21,045 Source: IHS iSuppli | Figure 27: Regional Social Network Users Figure 27 shows the forecasted social network users in car. This assumes a four-year life time of integrated social network apps. The social network apps users in the U.S. are forecasted to grow from 400 thousand in 2011 to over 26 million in 2018. Worldwide Internet radio users are projected to grow from 900 thousand in 2011 to over 66 million in 2018.

Figure 27: Regional Social Network Users

25 USA 20 N. America

15 W. Europe Millions

Asia-Pacific 10 O. Regions 5

0 2011 2012 2014 2016 2018

Source: IHS iSuppli |

Head Units with Apps Integration The integration of smartphone apps is just emerging and is expected to be an important trend in the next five years. As explained earlier, a variety of apps integration methods will be used ranging from Terminal Mode, Aha Radio, and Pioneer Zypr, to OEM-specific APIs. These systems are general purpose integrationCopyright apps  2011 that iSuppli can Corporation, accommodate a Company which was acquireda large by IHS variety Inc. All Rights of Reserved. smartphone Confidential – Patents apps. Pending Table 7 shows forecasted yearly sales of head units with` smartphone app integration, which includes all categories of solutions. The U.S. will grow from a few thousand units in 2011 to nearly 5 million units in 2018. Table 7: Head Units With Apps Integration Sales

Unit Sales (000) 2010 2011 2012 2013 2014 2015 2016 2017 2018 USA 5 44 133 446 1,153 2,168 3,442 4,967 N. America 5 48 146 487 1,260 2,365 3,758 5,419 W. Europe 5 31 112 351 786 1,452 2,323 3,362 Asia Pacific 24 97 266 630 1,354 2,692 4,676 Other Regions 8 33 92 205 451 990 1,823 Worldwide 11 111 388 1,196 2,880 5,622 9,763 15,280 Source: IHS iSuppli |

Figure 28 shows the forecasted cumulative sales for head unit apps integration systems. The cumulative sales for head unit apps integration systems in the U.S. are forecasted to grow from 50 thousand in 2012 to over 12 million in 2018. Worldwide Internet radio users are projected to grow from 120 thousand in 2012 to over 35 million in 2018.

Automotive Research The Connected Car—In-Vehicle Apps for the Future

Figure 28: Cumulative Smartphone Apps Integration Sales

12 USA 10 N. America 8 W. Europe Millions 6 Asia-Pacific

4 O. Regions

0 2011 2012 2014 2016 2018

Source: IHS iSuppli |

Conclusions This report shows the “big-picture” on how content flows from providers to the various systems in the connected car (see Figure 29) and is infotainment centric. Six layers are included with the major options listed for each layer. Copyright  2011 iSuppli Corporation, a Company which was acquired by IHS Inc. All Rights Reserved. Confidential – Patents Pending

Figure 29: Auto Apps Integration - Big Picture

Source: IHS iSuppli |

The content and apps layer is divided in auto-related and more general content segments. The communication link layer lists the options that are available now or will appear in a few years. The apps integration layer lists the key approaches for doing apps integration for infotainment systems, several examples of auto apps integration solutions are shown as well. The platform layer is based on the operating system platforms that are available for deployment today and in the next few years. The fifth layer is the auto systems that the driver and passengers can use for connected content. A sixth layer lists key auto OEMs by major regions to remind us that deployment will vary significantly by OEM and by country/region.. • There is an emerging wealth of vehicle-centric and vehicle-related smartphone apps. As more apps become available in the near future, these smartphone apps will be used in the vehicle with potential for severe driver distraction issues. • To lower the distraction factor of apps, there is a need for apps integration methods that can be added to infotainment systems. Such apps integration systems are becoming available and leading auto OEMs are starting to deploy their solutions.

• The emerging apps-based head units will have built-in apps that are supplied by the auto OEMs. Some of these built-in apps will be included in every car because they will be used by nearly all drivers. Examples are navigation, apps to play music, and Internet radio. The drivers will have varied needs for other apps and this will be satisfied by letting each driver select additional apps that will be downloaded and then become built-in apps as part of the head unit. • The apps-based head unit will also have a general purpose apps integration system that can integrate apps from all major smartphones and all the emerging cloud-based content and services. • Open and standardized integration platforms will ensure a broader participation from OEMs, Tier 1 suppliers, and third-party developers. But, currently, it is hard to do so due to the lack of available standardized platforms or integration systems. These integration platforms will be used for general purpose apps integration. • Content and apps integration is being done by some OEMs who handle each third-party developer partners individually. However, cloud-based content aggregation platform providers are emerging to ease the pain in the multiple integration process of cloud-based content. • The built-in apps that will be part of the head units will need to be tailored to each OEM’s head unit architecture. The proven way to do this is via the APIs and several auto OEMs have already started down this path. • Ford, Toyota, BMW, and other OEMs will continue to provide a proprietary platform to third- party app developers. While Nokia's Terminal Mode, Aha Radio, and Pioneer Zypr will open up more universal cloud-based platform participation from broader parties. • Open and standardized software -based systems, instead of hardware-dependent infotainment systems, are among the most important factors is to ensure flexibility of future-proof mobile app and device integration platforms for auto OEMs. • Four specific apps categories are emerging and are receiving strong attention from the auto OEMs: General smartphone apps integration, remote control of specific vehicle functions, Internet radio apps, and social networking apps.

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