Vol. 20, No. 9◆◆ www.hansenreport.com November 2007

Fiat to Make Supercaps Show Promise in Blue&Me Standard Automotive Applications

Some favorable news for supercapacitor company uses supercaps in fuel-cell ve- Microsoft Sets Deep Automotive Roots developers came recently from BMW and hicles under development, and currently According to Fiat, Microsoft has made Mercedes. Both have said that by 2010 or has no plans to use them in either hybrids real progress in its long and sometimes 2011 they will use supercapacitors, and or conventional vehicles. painful efforts to break into the auto elec- not just on hybrid vehicles. Mercedes told tronics industry. Working with Microsoft The Hansen Report that the carmaker is Maxwell Technologies in the Market on Blue&Me, a hands-free connectivity likely to use supercaps to stabilize voltage Valeo’s next-generation StARS platform allowing drivers to safely operate during peak load conditions, to bridge the (starter alternator reversible system), mobile phones and media players by voice interval when not enough energy is com- which can accommodate regenerative or with steering-wheel-mounted switches, ing from the alternator. Voltage stabiliza- braking, will make use of supercapacitors, Fiat achieved “quality we rarely found in tion is also on BMW’s agenda, as is using most likely from Maxwell Technologies. the past for radios, navigation systems or supercaps to power the stop-start function Maxwell, based in San Diego, California, other infotainment devices,” according to and to store recovered brake energy. is already serving a number of commercial Fiat’s top electrical engineer, Gianpiero Unlike batteries, which provide energy markets for supercaps. This past summer Oberto. for long periods of time, supercaps are suf- Valeo and Maxwell signed a memorandum Intent on expanding its markets be- ficient when power is required for only a of understanding covering a proposed yond the home, office and short period of time, less than 20 seconds, multiyear development and supply agree- environments into cars, Microsoft began and are widely used in consumer electron- ment through which Valeo will source a working on automotive applications of its ics devices to protect data from being lost multicell supercapacitor energy storage Windows CE operating system in 1995. It during short power outages. module from Maxwell. The Valeo starter wasn’t a smooth transition. In early 1999, A 23.3-farad, 12-volt package of alternator uses ten 2,000-farad superca- after a later-than-expected start, Clarion supercapacitors measuring 170 mm by 150 pacitor cells per vehicle. Shipments could shipped the first Microsoft AutoPC to the mm by 70 mm is employed on the Toyota start in 2009, in time for the 2010 model aftermarket, but because sales were abys- Prius as a power backup for the electroni- year. mally low, Clarion subsequently withdrew cally controlled brakes. It is supplied by In September 2007, Maxwell Tech- the product from the market. Later, in Panasonic EV Energy Co., a joint ven- nologies announced that it had been 2003, Bosch ran into so many problems ture between Matsushita Group and awarded a contract by the Mercedes Car with the launch of its new Windows CE- Toyota, which owns 60%. Group to design and produce supercapac- based navigation system that Mercedes While Toyota does use supercaps in its itors for an advanced hybrid-electric had to hold up start-of-production of its Prius, a top electrical engineer from drivetrain program incorporating a brak- new E-Class. The conventional wisdom at Toyota told us the company has no con- ing energy recuperation system. Maxwell the time was that when it comes to the crete plans to use them in non-hybrid ve- said it has several other development automotive environment, Microsoft just hicles. A top EE from Honda said that his Turn to Supercaps, page 8 didn’t get it. But Microsoft persisted. In 2003 it be- Supercapacitors: Features and Applications gan working with Fiat on a reference de- Features Applications sign for a new infotainment system. ◆ Rapid recharging (seconds) ◆ Voltage stabilization throughout the vehicle Blue&Me is based on the Microsoft Auto ◆ Millions of charge-discharge cycles ◆ Provide battery augmentation for electric (formerly called Windows Mobile for Au- ◆ Deliver quick bursts of energy for up to power steering, air conditioning and other tomotive) software platform consisting of 20 seconds peak current users at point of use to Windows CE and a number of application ◆ Good cold temperature performance minimize wiring specific interfaces. It supports most down to minus 40 degrees C ◆ Recuperative brake energy storage Bluetooth mobile phones and provides ◆ Require no maintenance ◆ Provide starter current for stop-start spoken audio output of SMS messages. ◆ Made from nontoxic materials function ◆ Turn to Microsoft, page 3 Battery backup for electric brakes Mentor Graphics’ Tools Automate Wiring Harness Design Twenty-first century automotive elec- A typical automobile may have as wide. All the major wiring harness suppli- tronics innovation has consistently come many as 70 logical systems. A radio, a ers are using CHS to some degree. While by way of the Germans, and, to a lesser lighting system or ABS, for example, each at least five major carmakers are in the extent, the Japanese. Here is an American requires its own logical system. Mr. process of deploying CHS, Ford and company with a product in the global O’Brien explained, “An engineer design- Peugeot Citroën are two that have made market today that offers carmakers poten- ing a logical system for a radio, for in- public statements about their plans. Men- tial savings in vehicle cost, weight and stance, knows he needs power, ground, a tor describes CHS’s market position cur- engineering man hours, as well as in- signal that goes from the control unit to rently as in the early stage of mass creased electrical system reliability. Due each speaker. He needs to take power adoption and the mature stage of launch. largely to the success of its CHS (Capital from the battery. At that stage of design, Harness Systems) tool suite, Mentor you don’t consider how that logical system Wiring Trends Graphics’ Integrated Electrical Systems is going to be implemented in a vehicle.” Being on the front lines of electrical division is growing five times faster than The physical implementation, includ- distribution system design, Mentor the company as a whole and “many times” ing the size, length and type of wire, the Graphics is well-positioned to observe faster than the automotive electronics routing, fusing, the location, size, type and what trends and changes are underway in market, according to Martin O’Brien, the number of connectors—is dependent on wiring harness technology. Mr. O’Brien division’s general manager. many factors and varies widely. “Only and Mr. Duffy mentioned these: Founded in 1981, Mentor Graphics, Mentor has the ability to take those logi- ◆ Wiring harness manufacturing will based in Wilsonville, Oregon, is publicly cal systems, and, using a rule-based para- remain labor intensive, although design traded on the NASDAQ. With more than digm, simply allocate them en masse into data is already widely used to automate 4,000 employees, the company maintains the vehicle—physically allocate all the verification and final continuity checks. 28 engineering facilities and 48 sales of- devices from the system, hook them up In the future, tools like CHS will facilitate fices worldwide. Sales in 2006 were logically, and convert that to wiring, auto- data flow to cutting and marking equip- $791.6 million. Mentor Graphics is the matically,” he added. ment as well, increasing the focus on de- world’s number-one supplier of printed OEMs and tier-one suppliers can use sign for manufacture. circuit board design tools. Mentor’s CHS tools not only to optimize ◆ Mentor sees continuing integration Along with increased complexity of the electrical architecture of a vehicle of electronics such as semiconductor- vehicle electrical and electronics systems, wiring harness and verify its performance, based fusing and more electronics content whether a result of safety and environ- but also to keep track of running changes in junction boxes. mental legislation or consumers’ desire for throughout the design cycle, including ◆ Wireless communications only makes more versatile infotainment systems and changes required to accommodate op- sense for the portable consumer devices connectivity, carmakers are offering a tional features that vary from model to Turn to Mentor, page 8 greater number of choices in options and model. Plus, CHS has the ability to cap- variants within model lines and trim lev- ture a company’s specific in-house design els. According to Mentor Graphics, it is practices as customized design rules, becoming very difficult for carmakers’ in- which ensures that the designs are correct © 2007 Paul Hansen Associates, 150 house IT departments to support a design from inception. Pinehurst Rd., Portsmouth, NH 03801, tool flow that can efficiently handle that According to Mentor, since its launch USA. Telephone: 603-431-5859. Fax: 603- level of complexity in wiring harness de- in 2003, CHS has been warmly received 431-5791. Email: [email protected]. sign, and the OEMs are increasingly turn- at the OEMs, and even more so at the All rights reserved. Materials may not be ing to outside tool vendors for help. tier-one wiring harness suppliers world- reproduced in any form without written per- mission. The Hansen Report on Automotive Benefits of Design with CHS CHS Electronics is published 10 times a year, Mentor Graphics believes it provides a ◆ Optimized, more robust design of the monthly; July/August and December/Janu- unique solution in its CHS tool suite. harness ary are combined issues. The annual print ◆ While traditional schematic tools have Automated synthesis of wiring—physical subscription rate is $747 (North America), implementation has a big impact on cost, been widely used in wiring design for sev- $787 (elsewhere). Back issues are available eral years, they only show electrical con- weight and reliability ◆ for $50 each. Index and multi-user electronic nectivity, and it is left to the engineers to Design for manufacture reduces labor costs ◆ Verify performance of the electrical system subscription information is available at map the connectivity to specific wires and prior to manufacture www.hansenreport.com. Paul Hansen Asso- specific harnesses. Paul Duffy, Mentor ◆ Reduce weight by up to six pounds ciates is a strategy and market research Graphics’ principal technologist, noted, ◆ Fewer cut leads firm consulting to the electronics industry. “Taking the logical schematics and creat- ◆ Fewer connectors Publisher/Editor Paul Hansen ing wires from each of those connections ◆ Avoid costly launch issues Managing Editor/ Brianne Wolfe is automated by the Mentor Graphics tool ◆ Reduce early-time-in-service warranty costs Circulation Manager suite. No one else I am aware of auto- ◆ Keep up with shorter automotive design ISSN 1040-1105 mates that.” cycles Page 2, November 2007 The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com Microsoft... Continued from page 1 Today Blue&Me is installed on roughly Microsoft in Worldwide Navigtion Markets 20% of all cars made under the Fiat, Lancia and Alfa brands, more than Worldwide In-Vehicle Navigation 2004 2005 2006 2007 2008 300,000 units annually. That is just the OEM Sales (thousands of units) 5,665 6,650 7,585 8,634 9,826 beginning; over the next three years Fiat Microsoft Market Share (%) 5.3 10.2 14.1 18.8 23.8 Navigation Sales with Microsoft OS (thousands of units) 298 677 1,073 1,626 2,342 will make Blue&Me standard across all 1.8 million Fiat Group cars. Worldwide Personal Navigation Devices 2004 2005 2006 2007 2008 Gianpiero Oberto told us that before PND Sales (thousands of units) 2,150 5,665 13,110 25,165 33,345 the Blue&Me project, he too had experi- Microsoft Market Share (%) 17.9 19.3 26.0 31.6 34.6 enced quality problems with Microsoft. PND Sales with Microsoft OS (thousands of units) 385 1,095 3,415 7,940 11,530 During the development of a navigation Source: Telematics Research Group, www.telematicsresearch.com system from a European tier one, “We used to see a lot of blue screens due to The affordability of the platform is es- Microsoft.” Third-party software suppliers Windows CE failures. But the quality fig- pecially apparent with Fiat’s latest naviga- included EB (Elektrobit) for navigation, ures have very much improved in the tion offering. Newly available on the Fiat and Actia, a French firm specializing in Blue&Me application. That is probably Bravo and Croma, the Alfa Romeo 159, vehicle electronics and diagnostics, for due to Microsoft’s increased automotive Brera and Spider, Blue&Me Nav retails diagnostics and insurance services soft- experience, and the fact that they devoted for just 499 euros. That’s an attractive ware. roughly 50 people to the development price for all the Blue&Me hands-free con- While Microsoft has a lock on phase, a huge team.” nectivity features plus navigation. And Blue&Me, and Fiat is very pleased with Mr. Oberto was impressed with the way since Blue&Me Nav comes with an em- the relationship, Fiat is not necessarily Microsoft dealt with development prob- bedded cell phone, users can opt for a wedded to the software platform for its lems. “They were very good with problem variety of telematics services: SOS Emer- next-generation, high-end, low-volume, analysis and test methodology. Every time gency, Info Services and Insurance Ser- integrated navigation system due around there was a malfunction, a new test model vices, which offers premium discounts up 2010. Potential suppliers include Magneti was born and added to the list. Once a to 50% based on how the customer actu- Marelli, which makes the Blue&Me hard- problem was solved, we were assured that ally drives. Fiat expects Blue&Me Nav to ware, Bose, VDO (now Conti- it would never happen again.” be optioned in 10% of the vehicles where nental) and Harman Becker, among According to Giovanni Maria Varazi, it is offered. others. ◆ in charge of product strategy for the Fiat By year-end 2007, Fiat will begin pro- Automakers Using Group, while safety and ease of use are ducing Blue&Me Map, a portable naviga- Microsoft Auto Software important to consumers, price is the main tion device that wirelessly links to the reason why Blue&Me is an unqualified embedded Blue&Me connectivity plat- Acura Jaguar success. It is offered standard on the form by means of Bluetooth. Bluetooth BMW Mercedes higher trim levels, the Sport and Lounge Map was introduced this past July during Ford* Mitsubishi Motors versions of the Fiat Cinquecento (Fiat the official launch of the Cinquecento. Fiat** Toyota 500) and on the Linea. On other models “Blue&Me Map is a world’s first,” said Honda Volvo it’s an option for which the customer pays Mr. Varazi. “It combines the convenience *According to the carmaker, 50% of all the 2008 model only 250 euros. Low cost was the major of a portable navigation device with the year vehicles sold in North America will come with the safety of the Blue&Me speech and steer- Ford Sync portable device connectivity feature, which is reason why Microsoft was selected in the based on the Microsoft Auto software platform. first place: “We wanted this to be afford- ing-wheel-mounted interface.” Blue&Me able for most Fiat customers,” noted Mr. Map can also be used in vehicles that **About 20% of all Fiat Group vehicles are sold with the Oberto. Fiat sells mainly A, B and C seg- don’t have the Blue&Me connectivity Blue&Me connectivity feature, which is based on the platform. It will retail for between 500 Microsoft Auto platform. According to Fiat, Blue&Me will ment cars. become standard equipment across all Fiat Group ve- and 600 euros. Microsoft Auto Business Unit Employees hicles within three years. Mr. Oberto especially likes that The number of licenses sold by the Microsoft Au- Microsoft Automotive is an open plat- Microsoft Automotive Device Partners tomotive business unit is up 50% this year over the form. “Our former navigation system had prior year. Alpine 145 (including 35 contract a proprietary operating system, so every Clarion employees) modification always cost a lot of money Continental 80 and took a lot of time. But [with Blue&Me] for the first time we are putting JVC software from different parties in the same Mitsubishi Electric box without the need to coordinate. All Panasonic 2002 2007 of the third parties that worked on the Pioneer 2002 to 2007 CAGR: 12.6% project could do so independent of Siemens VDO

The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com November 2007, Page 3 The Company Profile...

Thumbnail Sketch Nuance Sales and Net Margin Nuance Sales by Business Line (Estimated) Headquarters: 1 Wayside Rd., Burlington, Sales in $ millions 602.0 Massachusetts 01803 USA; Tel. 781-565- FY 2007 Sales: $602 million CAGR 2003 to 5000; www.nuance.com in $ millions 2007: 45.2% 388.5 Mobile Solutions,* 55-60 FY 2006 Sales: $389 million Imaging, 75-80 FY 2007 Sales: $602 million 232.4 FY 2006 R&D: 15.3% of sales 135.4 130.9 Call Centers, FY 2006 Net Loss: $22.9 million or 5.9% Dictation and 185-195 of sales FY 2003 2004* 2005 2006 2007 Transcription, FY 2007 Net Loss: $14.0 million or 2.3% Net Margin 265-275 of sales Employees: 3,500 FY 2003 (4.1%) FY 2006 (5.9%) *Automotive applications account for roughly Sales per employee: $171,999 FY 2004* (7.2%) FY 2007 (2.3%) half of Mobile Solutions sales. Working Capital: $113 million as of FY 2005 (2.3%) June 30, 2007 *Includes nine months ending September 30, 2004. Nuance Revenue Stockholders’ Equity: $750 million as of In 2004, accounting changed from calendar year to June 30, 2007 fiscal year ending September 30. FY 2006 Total: $388.5 million Market Capitalization: $3.96 billion as of By Region November 5, 2007 Nuance Cash Flow from Operations International, 25.8% United in $ millions States, Nuance’s Automotive Activities 47.9 74.2% FY 2007 Sales: $20 million* CAGR: Between 23% and 28% over the last few years 16.2 6.3 Employees: 75, including 65 engineers By Product R&D: 15% FY 2004* 2005 2006 Maintenance and Vehicles on the Road with Nuance *Nine months ending September 30, 2004 support, 18.4% Product and Speech Software: Approximately licensing, 10 million as of September 30, 2007, 60.7% Visioneer then changed its corporate Professional compared with 7 million the prior year name to ScanSoft Inc. In 2001 ScanSoft services, *Hansen Report rough estimate bought the speech and language technolo- subscription Fiscal year ends September 30. gies business of the bankrupt Lernout & and hosting, Background Hauspie for $39.5 million. ScanSoft ac- 20.9% The evolution of voice recognition quired Nuance Communications, which technology in automotive applications has owned call center automation and direc- According to Craig Peddie, vice presi- been a painfully slow process, taking more tory assistance speech technologies, in dent for Nuance’s Embedded Speech Solu- than a decade to move significantly be- 2005, and adopted the Nuance Communi- tions business, speech recognition was yond simple command and control func- cations name that same year. hyped before it was really ready, and that tions and automatic dialing. The main Nuance owns more than 380 speech sullied the technology, making carmakers catalysts for speech in the vehicle are technology patents with an additional 270 reluctant to use it in their vehicles. Now, phone kits, navigation equipment and patents pending. Corporate headquarters finally, speech technology is mature MP3 players, which are nearly impossible are in Burlington, Massachusetts, near enough for automotive applications, he for a driver to operate safely using only Boston; European headquarters are in believes. “The most obvious evidence of keypads and displays. One company Ghent, Belgium; Asian headquarters are the technology’s maturity is that you are poised to profit from the widespread adop- in Tokyo. now starting to see it on more and more tion of voice recognition in cars is The early automotive speech systems car models and on personal navigation Nuance Communications. introduced in the mid-1990s in embedded devices. Speech recognition as part of the The company that became Nuance was navigation systems in Japanese vehicles overall human machine interface is now incorporated in 1992 under the name were not only very expensive, but they did promoted more than ever by the car in- Visioneer Inc. Visioneer acquired not work very well in the car’s noisy envi- dustry to increase driver safety and usabil- ScanSoft, a scanner hardware and soft- ronment. Customers found them frustrat- ity of infotainment solutions. There are ware company, from Xerox Corp. in 1999. ing to use. even carmakers like Ford that advertise

Page 4, November 2007 The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com The Company Profile Continued

Nuance Mobile Solutions* Sales Speech software from Nuance is embedded Nuance speech software has been used in vehicles manufactured by these as a component in products produced by in $ millions 55 carmakers: these suppliers: Acura Jaguar Alpine Magneti Marelli 2002 to 2007 40 Alfa Romeo Land Rover Bosch-Blaupunkt Microsoft CAGR: 55.8% BMW Opel Clarion Peiker Acoustic 27 Cadillac Mercedes-Benz Cullmann Pioneer 17 Chrysler Nissan Delphi Siemens VDO Citroën Peugeot Denso Sony 8 6 Fiat Renault Harman TomTom Ford Saab LG Electronics Visteon FY 2002 2003 2004 2005 2006 2007 (est.) GM Magellan Xanavi *Automotive customers, including makers of personal navigation devices, account for roughly Nuance speech software has been ported Acquisitions half of sales. to devices made by these semiconductor Among Nuance’s many acquisitions of manufacturers: speech recognition as a differentiating speech recognition and text-to-speech Analog Devices (Blackfin) feature of their cars, for example, the Ford technology, these four formed the basis of Freescale Fiesta campaign in Europe.” the Nuance products used in automotive Mr. Peddie is responsible for Nuance applications: NEC speech applications in the mobile, auto- Renesas 2001 Lernout & Hauspie motive and consumer electronics markets. (RealSpeak) Prior to Nuance, Mr. Peddie was vice 2003 Philips Electronics Speech with 2 MBytes of RAM is today a stan- president and general manager of Tegic Processing and Voice Control dard hardware platform for car kits. Not Communications, a provider of predictive business units (VoCon) too long ago that was considered a high- text input software. Before that he was 2003 SpeechWorks International end hardware platform found only in the general manager of Motorola’s Lexicus (Speech recognition, text-to- most expensive car kits and head units. division, focused on the development and speech and speaker verification) On the navigation side, for full-blown licensing of user-interface technology, in- 2004 Advance Recognition Technology voice destination entry systems, the mini- cluding embedded speech recognition ap- (Speech interface for mum hardware configuration is a 200- plications. handsets) “Only in the last two years have the MHz, 32-bit CPU and upwards of 7-10 use cases been compelling enough and the Mbytes of RAM. These systems are al- Europe and Asia, where penetration of technology mature enough for speech to ready available in the market. As the high-end navigation is strongest, account take off in the automotive environment,” price of hardware declines further, the for the bulk of automotive sales. Nuance’s explained Mr. Peddie. “We’ve got it to number of speech applications will rise. automotive solutions have been deployed where we can now accurately recognize a While an operating system is a basic re- in 15 countries. For embedded applica- few hundred thousand street names for quirement, by design Nuance avoided any tions, Nuance offers speech recognition voice destination entry in navigation sys- dependency on expensive OS software. products in more than 20 languages and tems. Our European systems are now get- text-to-speech in 30 languages. ting multilingual—you can speak an Automotive Speech Business Nuance’s competitive landscape varies English song title in a German entertain- The bulk of Nuance’s roughly $20 mil- somewhat from region to region. For Japa- ment system and the system will under- lion in automotive revenue comes from nese-language applications, Asahi is the stand. Text-to-speech now sounds natural, three products: VoCon speech recognition main competition. Asahi also supports not like a robot. And we have continually software, and RealSpeak and Vocalizer English and European languages, but worked on noise robustness.” text-to-speech (TTS) software. Profes- those have not been as widely deployed as At the same time, cars have gotten sional services—selecting the appropriate Nuance’s solutions. Nuance is Denso’s pri- quieter, and the electronics hardware has technology, integrating it to the custom- mary supplier of non-Japanese speech soft- become much more affordable. According ers’ platform requirements and refining ware, especially in Europe. For the to Mr. Peddie, hands-free car kits are now the user experience—account for approxi- Japanese language, Denso uses an internal capable of running low-end speech recog- mately 15% of the company’s automotive speech recognition solution. nition systems adequate for command and sales. Nuance’s speech products bring in In the United States, the main compe- recognition of several hundred address license revenues according to the number tition comes from IBM’s Embedded book entries. A 100-MHz, 32-bit CPU of units in which they are installed. ViaVoice product line. IBM also competes

The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com November 2007, Page 5 Nuance Communications in the European market, as does Temic Major Suppliers of Speech Dialog Systems, which Harman Distinctions Claimed by Nuance Automotive Speech Software bought from DaimlerChrysler in 2002. ◆ The world’s most comprehensive product Nuance has a couple of programs in devel- Asahi Kasei line of speech solutions opment that will use its Chinese language Harman Becker ◆ Largest and most experienced speech recognition and text-to-speech products, IBM company in the world but those have not yet been deployed. Loquendo (text-to-speech) ◆ The first vendor to support recognition of We asked Mr. Peddie why Nuance’s Siemens names from a list of over 300,000 automotive customers choose to do busi- SVOX (text-to-speech) entries ness with Nuance rather than with its automobile and the telephone will com- ◆ Nuance’s VoCon family is the world’s competitors. “We have been in the auto- municate with each other, understand most widely deployed embedded motive business since 2000. We have a who has what capabilities, synchronize speech-recognition engine dedicated 65-engineer product team that address books, perhaps synchronize MP3 works exclusively for automotive custom- files. While you’re driving, you will be tion for command and control and voice- ers on automotive applications. We have using the speech engine in the car, be- activated dialing,” said Mr. Peddie. “Text- the broadest language portfolio of any sup- cause it will have the better microphones. to-speech came along with turn-by-turn plier in the auto industry, for both recog- “There will be server-based engines as navigation. Now, if a tier one or OEM is nition and text-to-speech. And since we well, for providing location-based services going to integrate any type of speech into operate in all three domains—the car, the to the vehicle. You’ll say, ‘Give me the their vehicle, it is for navigation and com- handset and connected services—we are Starbucks closest to my location.’ The mand and control.” the only company that can handle the recognition will actually be taking place Destination entry represents the state integration of those domains that will oc- on a server somewhere that will be down- of the art of automotive speech recogni- cur in the future.” Nuance speech soft- loading Starbucks locations to the map tion, and Nuance-based destination entry ware is already embedded in more than 10 displayed on the big and bright LCD in is finding wide acceptance. At least eight million cars and 100 million handsets, the your car’s head unit,” Mr. Peddie said. In applications are already shipping; 10 to 20 latter a market that is growing much more 2008, according to Nuance, more than more are in the works and will start ship- quickly than the automotive market. 100 million new phones will come with ping in the next 12 months. A major sup- Ultimately, according to Mr. Peddie, speech software of some sort. plier to both market segments, Nuance’s speech software will come embedded not Nuance speech engines are used in two navigation business is split evenly be- only in most vehicles, but also in most high-profile, speech-activated, in-car tween embedded navigation and portable cell phones. “When you sit in your auto- communications and entertainment sys- navigation devices (PNDs). mobile with your Bluetooth phone, the tem applications. Fiat Blue&Me was Embedded in navigation units built by launched in 2006; Ford Sync Mitsubishi Electric, Nuance’s speech-rec- Speech and Personal Navigation Devices debuted in the fall of 2007. ognition engine is already used for voice PmND Feature Value Add Features fro Nuance Offer Both systems are based on destination entry in the new Mercedes C- Using Speech the Microsoft Auto platform. Class and will be included in systems des- Nuance speech software tined for E-Class updates. Nuance had MeP3 playing Select song or album by voic MP3 SpeechPAK application been supporting voice destination entry Control the MP3 player by voice module tailored for speech- interfaces with content from enabled song control, including Gracenote, NAVTEQ and for systems introduced by Xanavi for the Playback title or other song TTS for audio feedback information Tele Atlas. Nissan Infiniti in 2004, but no longer has Toraffic information Playback of traffic updates t Text reader using RealSpeak that business. allow the driver to readjust route Solo Speech and Navigation Go Speech is especially well suited to per- Pghoning Hands-free, voice-activated dialin SpeechPAK VAD application Hand in Hand sonal navigation devices, which are lim- Playing back of SMS messages module for voice-activated dialing The market for navigation ited by small screens and minimal input SMS reader, including SMS equipment, both embedded capabilities. Since July 2007, Nuance- pre-processor and portable, is the primary enabled voice destination entry has been

Lnanguage guide Play back words or sentences i Recognition of generic market driver for speech soft- featured on the TomTom GO product foreign languages sentences using VoCon 3200 ware in cars today—voice family. TomTom is Europe’s number-one Enter a common phrase and Audio playback using destination entry (VDE) and PND supplier. Other PND makers using spoken output of the translation RealSpeak Solo text-to-speech for the result- Nuance for destination entry include Tfravel guide Information about points o Audio playback using ing directions. MiTAC and Magellan. interest can be spoken back RealSpeak Solo “Until the advent of navi- As retail price pressures increase, and Select particular restaurant/hotel Selection of points of interest by voice by voice using VoCon 3200 gation systems, there was re- as speech technology improves and hard- recognizer ally very little speech in cars; ware costs come down, Nuance expects it was strictly speech recogni- that TTS and VDE will become part of

Page 6, November 2007 The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com The Company Profile Continued

of commands and a rigid set of dialogs. Vocalizer the TTS engine is much smaller, Automotive Speech Applications “It lessens the cognitive load,” said Mr. because you don’t have to store all the ◆ Command and control Peddie. “Drivers can have a conversation real speech inventory, but it isn’t as natu- ◆ Voice activated dialing with their car. They can say, ‘Gee, I want ral sounding as RealSpeak,” said Mr. ◆ SMS (Short Message Service) reading to listen to classical music.’ It could un- Peddie. ◆ Voice destination entry derstand that (a) you’re talking about the “In automotive applications, where the ◆ Turn-by-turn directions radio, and (b) you want classical music.” head unit is built into the car and often ◆ MP3 play by voice In an XM Radio-equipped car, it would features a hard disk drive with lots of ask, ‘Do you want to listen to XM Clas- memory, RealSpeak is the TTS product of Global Market for Automotive Speech* sics?’ You say, ‘Yes,’ and it will tune the choice, because you can get the most CAGR 2004 to 2008: 24.6% radio for you. “Or you could say, ‘I want to natural sounding voices. However, for go to 123 Main Street.’ It would look it up low-cost PND applications, customers are $70 million and respond something like, ‘I have four going with our latest version of Vocalizer, 123 Main Streets, which city would you called Vocalizer for Mobile. It sounds bet- $29 million like to go to?’ After speaking the name of ter than our small version of RealSpeak, the city, the navigation unit develops the but takes up a small fraction of the route guidance for you,” he explained. memory, on the order of 1.5 MB for a full 2004 2008 Nuance will start delivering elements system,” Mr. Peddie explained. With Vo- *Includes speech software embedded in portable of its new natural language processor calizer for Mobile, developers are provided navigation devices. Source: Nuance packaged with speech recognition soft- with the flexibility to modify the speaking ware in 2008, in time for market introduc- rate, pitch and voice characteristics of the almost all navigation systems. “Soon all tions in the 2010 model year. Carmakers output voice. Along with turn-by-turn high-end embedded navigation units will in the United States are especially inter- navigation instructions, applications in- have both TTS and VDE; likewise for por- ested in natural language software. clude reading SMS text messages and table navigation devices. TTS is already With natural language processing, the email. New releases coming out now can part of all but the low-end PNDs, and in output of the speech engine is handed combine prerecorded phrases (for ex- two years all PNDs will have it, at least in over to a robust parser that extracts the ample, “in 300 meters, turn right”) with the developed Western markets. Some semantic meaning of what is said, based Vocalizer TTS. PND makers are offering voice destina- on statistical probability. Nuance has al- tion entry, but in the next three years, ready deployed natural language systems VoCon Speech Recognition upwards of 50% of PND suppliers will of- in server-based applications, as well as in Designed for automotive, mobile and fer it,” predicted Mr. Peddie. dictation products like Dragon Naturally other embedded applications, VoCon Consumer demand for speech-based Speaking. 3200 is Nuance’s latest-generation speech navigation features has been confirmed by In the next couple of years, said Mr. recognition engine. In addition to a Nuance-sponsored survey of more than Peddie, natural language understanding speaker-independent continuous digit and 900 drivers in Germany, the United States will lead to another wave of automotive command recognition, it supports text and Japan. Detailed spoken instructions speech applications. “You have satellite enrollment of address books to allow and voice destination entry were identi- radio with over a hundred channels, CD speaker-independent name dialing with fied as the most important of nine speech- players, iPods, MP3s—speech is the only no training required. Further, VoCon enabled features available to drivers, way to do it.” 3200 supports street and city name recog- ranked as helpful or very helpful by 77% With this product Nuance will soon nition, even of large countries like the and 76% of respondents, respectively. find itself competing against VoiceBox United States or European-wide naviga- Technologies, whose natural language tion systems. Nuance’s New Natural Language software is coupled with speech engines “For command and control and the Understanding Feature from either Nuance or IBM. address book with 1,000 or more names, Nuance’s automotive speech business is recognition accuracy is 95%,” said Mr. about to receive a boost as its new natural Text-to-Speech Peddie. “The accuracy goes up to 98% or language understanding product finds pro- Nuance offers two types of speech out- 99% for digits and menu commands. For duction applications. Natural language put products. Its RealSpeak product line is destination entry, if you have a couple- processing, a layer of software that sits concatenative, meaning that words are hundred thousand street names, then ac- atop the speech recognition engine, sim- built by linking small units of actual re- curacy goes down to 80% but that means plifies the user interface for the driver and corded human speech. Nuance’s Vocalizer four out of five entries will be recognized makes the operation of navigation equip- product line employs a different type of correctly. But then, any name not recog- ment or music players far less distracting. speech synthesis in which the output is nized can easily be spelled using our Smart Drivers don’t have to remember a long list created from a parametric model. “With Spelling module.” ◆

The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com November 2007, Page 7 Supercaps... Continued from page 1 contracts with automakers involving charging system. “Use boost caps for those supercaps. Supercapacitor: High energy-density storage big current draws, saving the battery for device utilizing high surface area electrodes “We do a lot of business with automo- steady energy supply, so it doesn’t wear (usually made from carbon) in contact with an tive customers in Europe. In addition to electrolyte and kept separate by an ion- out as quickly,” said Mr. Schramm. our relationships with Valeo and permeable separator; also known as an Already in high-volume production, Mercedes, there are others we are not at ultracapacitor or electrochemical double-layer Maxwell has sold more than 1.5 million liberty to disclose,” said Michael Sund, capacitor (EDLC). Supercapacitors have very supercaps of various sizes to makers of vice president of communications and high capacitance measured in farads, in contrast wind turbines. Supercaps power the blade- investor relations for Maxwell Technolo- with normal capacitors, which are measured in pitch control systems that optimize wind gies. “We have provided samples and con- pico farads. Supercapacitors store and release energy efficiency. Maxwell Technologies ducted collaborative development with at energy much more quickly than do batteries. For formed a manufacturing alliance with more background on supercapacitors read this least a dozen automakers.” Belton Technology Group, a Chinese well-written article from IEEE Spectrum Online: “I can make a case for using a number www.spectrum.ieee.org/nov07/5636/4. manufacturer of flex circuits and circuit of boost cap (supercapacitor) packs boards. Maxwell produces the proprietary throughout the vehicle to complement and mass have a lot to do with the future carbon powder electrode material—the the battery,” said David Schramm, CEO of boost caps,” he added. Before taking his essential ingredient used in supercaps— of Maxwell Technologies. “Why not put current position at Maxwell, Mr. and delivers it to Belton for assembly into boost caps everywhere that power is Schramm was chief engineer at electrical finished supercapacitor cells and modules. needed—the air conditioner, electric distribution system-maker, Delphi ◆ power steering, the starter—to minimize Packard. Possible Major Automotive the need for big, heavy, inflexible and ex- Without supercaps, the charging sys- Supercapacitor Suppliers pensive cables.” tem must be sized for peak loads, such as batScap Carmakers who package the battery in “in a sudden downpour, when you put the Capxx the trunk must run a power cable the defroster on, the wipers on, the headlights Maxwell Technologies length of the vehicle. Downsizing that on, and you slow down,” explained Mr. NessCap cable might provide sufficient savings to Schramm. But with supercaps, engineers Panasonic EV Energy Company pay for the supercap. “I think packaging could potentially downsize the battery and Mentor... Hella’s FY 2007 Sales Up 8% Continued from page 2 Hella KGaA Hueck & Co. the vehicle’s bumper, one on each side. Other Fiscal year 2007 ended May 31, 2007 Hella driver assist systems already on pro- that are brought into the vehicle. Provisional figures duction vehicles include rear-view cameras, ◆ Thin-wall, light-weight, high-tem- FY 2007 Sales: €3.7 billion adaptive headlights on the BMW 5 Series, perature wiring is increasingly replacing Change from FY 2006: up 8% and on the MY 2007 Chrysler 300C, a lidar- thick-walled PVC-type as wiring density FY 2007 Earnings Before Interest and based adaptive cruise control system. Hella and underhood temperatures increase. Taxes: €46 million, or 1.2% of sales, com- has booked business with a European ◆ Cut lead count will hold steady for a pared with €18.5 million in the prior year carmaker for an automatic parking system, while at current levels. Company’s Outlook: Grow sales to €6 bil- with production scheduled to start in 2009. ◆ At best a niche, fiber optics will not lion in the medium term, without acquisitions During the last fiscal year, Hella made replace copper any time soon. some notable strategic alliances and acquisi- ◆ Not much activity in power line While Hella’s largest business division tions as it expands its product portfolio be- communications is underway in the indus- remains lighting, the electronics and after- yond lighting. Hella joined with Volkswagen, try. (See the July 2007 Hansen Report.) market segments each produced more than EB (Elektrobit) and NEC Electronics Europe Mentor Graphics is sponsoring IESF, €1 billion in sales in the last fiscal year. to develop an Autosar-compliant body elec- the 6th Integrated Electrical Solutions More than 80% of Hella sales are to Eu- tronics control unit. Hella was responsible for Forum, on December 4, 2007, at the ropean customers. The electronics business the ECU hardware, software and software in- Hyatt Hotel, Dearborn, Michigan. Presen- division has been growing steadily during the tegration. tations will cover Electrical Systems De- last three fiscal years at an average rate of In May 2007, Hella announced a strategic sign and Analysis, Automotive 8.5% per year, somewhat faster than the alliance with the Chinese carmaker Geely, for Networking, Harness Engineering, market. Electronics accounted for 32.4% of body electronics. Hella also acquired a Ger- Mechatronics, Systems Design, System Hella’s sales in FY 2007. man developer of sensor and body electron- Modeling and Industry Standards. Hella provides the Side Assist lane ics hardware and software, Enko Automotive, For more information or to register, change warning system in the 2007 Q7. The in March 2007. ◆ visit www.mentor.com/go/iesf. ◆ system uses two 24 GHz radar sensors in

Page 8, November 2007 The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com