Vol. 27, No. 7 u hansenreport.com u September 2014 Uconnect Goes Ultracapacitors Still Showing Promise More Applications Coming another promising application, as is brake Global Ultracapacitors can do things that bat- recuperation, because ultracapacitors can teries can’t: They can provide an instanta- quickly take big gulps of power. neous power boost, and they can be In 2010, Maxwell Technologies began “We are global,” said Alan Amici, head charged and discharged millions of times, shipping its ultracapacitors to Continental of Global Uconnect at Fiat Chrysler. making them a perfect complement to bat- on behalf of a voltage-stabilization system “Uconnect systems are in nearly all Fiat teries. Batteries provide significantly greater that supports start-stop functionality in Chrysler cars. There are still some Fiats energy density and are best at providing PSA Peugeot-Citroën vehicles. When the that are migrating from legacy Blue&Me power over a longer period, but over time voltage from the lead acid battery falls too systems, but they are all moving to Ucon- the charge and discharge process degrades low, two ultracapacitors, connected in nect.” The Uconnect brand, praised by their ability to store energy. series, temporarily add five volts to the neg- Consumer Reports for its ease of use, will cov- Ultracapacitors are well suited to power- ative side of the battery to power engine er all the carmaker’s audio, navigation and ing start-stop applications, especially when starts and maintain sufficient bus voltage. telematics offerings, from the basic radio, fast restarts (in 300 milliseconds or less) are As of May 2014, Continental had pro- with no touch screen, to the 5-, 6.5- and required, and for maintaining the vehicle’s duced one million voltage-stabilization 8.4-inch touch screen systems. supply voltage, as frequent restarts can systems. The Blue&Me handsfree phone and drain the battery. Electric turbochargers, Since 2010, only one other ultracapaci- navigation platform is based on Microsoft which require frequent power bursts, are tor application has come to light. In software. While Microsoft Windows Em- August 2012, production began in Japan and Europe for the Mazda6 (non-hybrid) bedded Automotive software now under- With an extremely high surface area of activat- pins the Uconnect 5-inch touch screen ed carbon, ultracapacitors have orders of magni- wagon, which featured Mazda’s i-ELOOP product line introduced in May 2013, it tude more capacitance (up to 3,000 farads per (intelligent energy loop) regenerative brak- appears that Microsoft won’t be part of 2.7-volt cell) and orders of magnitude more ener- ing system. The system includes a 12-25 future Uconnect products. gy density than conventional capacitors. Ultraca- volt, variable-voltage alternator connected “We are looking at the operating system pacitors, which store energy electrostatically, to an electric double-layer capacitor (ultra- trends in the market,” Mr. Amici said. “We have very low internal resistance ranging from capacitor) module. A DC to DC converter 8 milliohms to as low as 0.3 milliohms for the have a close relationship with QNX, our 3,000-farad ultracapacitor offered by Nippon steps the alternator’s output from 25 volts biggest operating system provider right Chemi-Con. to 12 volts for distribution to the vehicle now. We also have a relationship with electrical system. i-ELOOP converts the Google and we joined its Open Automo- Benefits vehicle’s kinetic energy into electricity as tive Alliance.” Future Uconnect products High power density: While their energy density the vehicle decelerates. might have more than one OS. is only a fraction of what a battery can The Mazda6 with i-ELOOP, available in provide, the power density of ultracapacitors is the U.S. since May 2013, is rated for 40 Continental produces the basic radio many times greater. and the 5-inch product line. Harman sup- Temperature range: With an operating range of mpg on the highway. i-ELOOP is also avail- plies the 6.5- and 8.4-inch lines, which are minus 40C to plus 65C, says Maxwell Technolo- able on the Mazda3. The double-layer based on the QNX operating system. gies, ultracapacitors are better suited to the en- capacitors are made by the Japanese com- Given the likelihood that Android Au- gine compartment than lithium-ion batteries and pany Nippon Chemi-Con. tomotive software could be running native- better for cold engine starting than batteries. High cycling: Ultracaps can withstand more High Costs ly on some head units, I asked Mr. Amici if than one million charge-discharge cycles. investors in suppliers such as Harman Fast charge and discharge: As little as a frac- Historically, high costs have limited should be worried that Google or Apple tion of a second for charging or discharging. ultracapacitors’ use in automotive applica- will wrest market share away from them. High charge-discharge efficiency: More than tions, but costs are headed downward. “I wouldn’t count the tier-ones out,” he 95%, with a power density of 1kW/kg, according According to Maxwell senior product man- said. “We have some really good tier-ones to Nippon Chemi-Con. Uncompromised by the ager Jens Keiser, carmakers have targeted a depth of discharge. with many years of experience integrating cost of a half-cent per farad. “We are start- Environmentally friendly: Unlike batteries, their infotainment products with the vehi- ultracapacitors have no heavy metals. ing to get there in high volume with our cle electrical systems and providing high Long lifespan: Ultracaps provide 15 years or cells,” he said. Maxwell offers 2.7-volt cells performance audio systems.” Alpine, Mit- more of maintenance-free operation in automo- in 3,000-farad, 1,500-farad and 1,200-farad subishi Electric and Panasonic are also tive applications. versions. At 2.7 volts per cell, a module u Volumetric density: higher than batteries Fiat Chrysler infotainment suppliers. Turn to Ultracapacitors, page 8 The Hansen Report on Automotive Electronics, www.hansenreport.com Page 1, September 2014 More Connectivity and ADAS Features for 2015

Enormous economic, technical and Lane-departure warning systems have in 2012. Forward collision warning is legal hurdles remain before fully autono- been around since the 1990s on commer- offered as an option on nearly 40% of mous driving from point A to B is ready for cial trucks and for more than a decade on 2014 models. mass production, but considerable passenger cars. Nissan and Toyota had lane Mercedes, soon to be followed by Volvo, advances have been made since Google keeping assist systems that nudged the is the first carmaker to offer nearly autono- first announced it was working on self-driv- steering wheel on the road in Japan in the mous driving. Mercedes’ Distronic Plus ing cars in 2010. While the industry, and early 2000s. Because they rely on cameras with Steering Assist, introduced on the to some extent government regulators, have to track lane markings, they have been 2014 S class as part of a suite of features a clear vision of the safety and fuel-saving most effective on well-marked, snow-free called Intelligent Drive, requires the driver benefits to be gained by automating more highways in daylight hours when the to remain engaged, with hands on the driving functions, those automated systems weather is clear. A 2014 study by the mar- wheel. But the system is capable of full lon- must perform flawlessly to convince con- ket research firm AutoPacific found grow- gitudinal and lateral control at low speeds. sumers the expensive options are both ing consumer interest in lane-keeping In the U.S., the take rate for the Driver dependable and worth the money. The J.D. systems: interest among the 92,000 respon- Assistance Package, which includes all Power 2014 U.S. Automotive Emerging Tech- dents increased by 26 percentage points Intelligent Drive features, is 85% on the nologies Study found that only 24% of compared with interest in 2013. That may S550/S550 4MATIC models and 90% on respondents were interested in an autono- be due to better, cheaper cameras and the S63V4. mous driving mode in their next vehicle if smarter image processing algorithms According to Volvo, its new XC90 SUV the price was $3,000. In 2013, the interest improving the performance, or simply due at the end of the year is the first car in in autonomous driving was 21%, and J.D. greater consumer awareness as penetration the world with automatic braking if its Power analysts say the small increase is a increases. Volvo says its cars can recognize driver turns in front of an oncoming car. result of growing consumer exposure to the edge of the roadway without any Volvo’s City Safety automatic braking fea- advanced driver assistance systems (ADAS) markings. ture is standard across all models. features. Low-priced, high-performance cameras Usually paired with blind-spot detection ADAS features such as adaptive cruise have also enabled a sharp increase in the systems, radar-based rear cross traffic alert control in stop-and-go traffic, autonomous availability of forward-looking collision systems, which assist when a driver backs emergency braking (AEB), lane-keeping warning and mitigation systems as well as out of a parking space in situations where assist, automatic parking, and speed-limit pedestrian detection in moderately priced side vision is limited, are now widely avail- and traffic-sign recognition are becoming vehicles. Collision avoidance systems with able from many carmakers including more widely available in new vehicles, automatic braking are on the rise since Volvo, Ford, Hyundai, Toyota, General including some non-luxury vehicles, but are automatic emergency braking (AEB) is now Motors, Mazda, Chrysler, BMW, Mercedes, still only operating in one to three percent required for a five-star Euro NCAP rating. Turn to Features, page 8 of vehicles on the road, according to Auto- In the U.S., more than 20% of 2014 motive World. Continental AG forecasts models in the Highway Loss Data Insti- sales of ADAS will increase by 21% per tute’s Vehicle Features database offer a year through 2020, from $2.5 billion in front crash prevention system with auto- © 2014 Paul Hansen Associates, 150 2013 to $9.5 billion. matic braking capabilities, twice as many as Pinehurst Road, Portsmouth, NH 03801 USA. Telephone: 603-431-5859; fax: 603- Euro NCAP 2020 Roadmap 431-5791; email: [email protected]. Adoption of safety features such as electronic stability control and automatic emergency braking (AEB) All rights reserved. has been largely driven by government regulation. Euro NCAP’s 2020 Roadmap, released in June 2014, outlines where that agency will next be focusing its efforts to reduce vehicle-related deaths and injuries. Materials may not be reproduced in According to the agency, “Euro NCAP needs to engage in the roll out of vehicle automation as a way to any form without written permission. dramatically improve vehicle safety and safe driving.” The Hansen Report on Automotive Domain Possible Changes to NCAP Test/Assessment Electronics is published ten times a year at www.hansenreport.com. July/August and Occupant Protection Adaptive restraints, seatbelt airbags, rear-seat occupant December/January are combined issues. detection Back issues are available for $50 each. Sin- AEB for Cars and Vulnerable Road Users Advanced capability AEB, e.g. for turning into oncoming gle and multi-user electronic subscription (pedestrians, cyclists, motorcyclists) traffic and for intersections, standardized driver warn- information and a searchable index are ings, updated test and assessment procedures to en- available at www.hansenreport.com. Paul compass pedestrian/cyclist detection, V2x, adaptive Hansen Associates is a strategy and market headlights research firm consulting to the electronics Lateral Assist Systems More intuitive, intelligent, integrated lane keeping assist. industry. (Consumer acceptance of lane keeping and blind spot Publisher/Editor Paul Hansen monitoring has been low in Europe.) Managing Editor Brianne Wolfe Speed and Impaired Driving Semi-autonomous driving functions, intelligent speed Director of Marketing Michelle Long assist and attention assist (driver monitor) ISSN 1046-1105

Page 2, September 2014 The Hansen Report on Automotive Electronics, www.hansenreport.com The Future of Automotive Electronics According to Citi Research

A dozen equities analysts employed by Citi While the report, published in May 2014, is abundance of information about where our global Research, a unit of Citigroup Markets Inc., com- especially optimistic and friendly to numerous industry might be headed. Below is just one page bined to produce one of the most comprehensive publicly traded automotive electronics suppliers— from the 105-page report. reports I have ever encountered covering the fu- many of which either receive financial services For access to the full 105-page report “Auto ture of the global automotive electronics industry. from Citigroup or Citigroup owns positions in Electronics in a Global Context,” follow this link. them—it will provide thoughtful readers with an

Figure 3. Auto-related developments driven by electrification (2010, 2015, 2020). Number of electronic devices used in vehicles to expand

2010 2015 2020 Automotive industry condition Global market size (‘000 units) 73,496 91,000 111,300 Principal environmental Fuel economy regulations in Europe (2015~) EU tightens fuel economy regulations (2021~) regulations Fuel economy regulations in China (2015~) China tightens fuel economy regulations (2020~) US tightens ZEV regulations (2018~) Principal safety regulations ESC becomes compulsory in US step by step ESC becomes compulsory for new vehicles in NCAP points added for safety devices (2017~) (2008~) Japan, Korea, the EU (2014~) ESC becomes compulsory for certain models NCAP points introduced for safety devices On-board cameras become compulsory in the in some regions (2011~) (2014~) US (2018~) Automated-driving related legal framework drafted Technology sector trends Smartphone diffusion starts (2007~) Smartphone market approaches maturity Internet of Things advances (2013~) Cloud computing advances (2010~) Big Data advances (2012~) Machine to Machine advances Telecom technology convergence driven by LTE Advanced diffusion starts (2015~) 5G telecom standards commercialized LTE (2011~) (2020~) Market outlook by products Fuel efficiency Adoption rate Market size Adoption rate Market size Adoption rate Market size (%) (‘000 units) (%) (‘000 units) (%) (‘000 units) EV 0.0% 8 0.2% 192 0.5% 576 PHEV 0.0% 1 0.2% 176 0.9% 946 HEV 1.2% 890 2.6% 2,324 4.6% 5,099 xEV 1.2% 898 3.0% 2,692 5.9% 6,621 Regenerative breaking 0.0% 0 2.0% 1,820 10.9% 12,143 ISS 2.8% 2,030 29.3% 26,706 50.0% 55,652 EPS 36.6% 26,893 67.3% 61,278 85.3% 94,987 LED front light 0.1% 37 15.0% 13,650 40.0% 44,520 ・ Toyota and Honda introduce mass-production Fuel cell vehicles R&D restricted lease sales models (2015) Diffusion phase starts (2020~) Safety Adoption rate Market size Adoption rate Market size Adoption rate Market size (%) (‘000 units) (%) (‘000 units) (%) (‘000 units) ESC 36.6% 26,890 57.2% 52,050 70.1% 61,840 Preventive safety technology 25.7% 18,887 69.5% 63,239 114.5% 127,477 Major applications in ADAS Parking assist (Short range) AEBS, LDW, Semi-autonomous parking ACC, Traffic jam assist, Autonomous parking Commercialization of combined-function Commercialization of semi-automated driving Automated driving Automation of specific functions automation systems systems Informatics Adoption rate Market size Adoption rate Market size Adoption rate Market size (%) (‘000 units) (%) (‘000 units) (%) (‘000 units) Car Navigation 12.7% 9,368 15.5% 14,119 18.4% 20,468 PND 49.8% 36,636 30.8% 28,009 16.6% 18,489 Telematics 6.1% 4,467 28.2% 25,671 77.1% 85,775 Electronic devices Units per vehicle Market size Units per vehicle Market size Units per vehicle Market size ($) ($bn) ($) ($bn) ($) ($bn) ECU (units per vehicle, mn units) 19.6 1,444 22.5 2,043 25.4 2,829 Semiconductors 300 22.0 337 30.7 376 41.8 Connectors 126 9.3 137 12.4 158 17.6 Lithium-ion batteries 3 0.2 47 4.3 99 11.1 Automotive cameras 5 0.4 41 3.7 80 9.0 Automotive radars 10 0.8 36 3.2 65 7.2 Automotive motors 200 14.7 275 25.0 308 34.2 Source : Company data, Wards, Anfavea, AEB, JAMA, JAPA, CAAM, SIAM, GAIKINDO, TMT, TSR, Marklines, Gartner, JEITA, Bishop, Citi Research estimates.

Note: By “electrification” the report is referring to all new electronics, not just those associated with hybridization of the powertrain. ISS: idle stop systems Source: “Auto Electronics in a Global Context,” published May 20, 2014, by Citi Research

The Hansen Report on Automotive Electronics, www.hansenreport.com Page 3, September 2014 The Company Profile… Nuance Communications

Thumbnail Sketch Nuance Revenue and Net Margin Nuance Revenue and Profit Margin by Business Segment Headquarters: Burlington, Massachusetts, 2009 to 2013 CAGR: 18.2% FY 2013 Total Segment Revenue: USA; Tel. 781-565-5000; www.nuance.com 1,855.3 $1,957.7 million* Fiscal 2013 Revenue: $1,855.3 million; 1,651.5 72.2% is from the United States Imaging, 12.4% Healthcare, 1,318.7 R&D: 15.7% of revenue 1,118.9 Enterprise, 46.6% Interest Expense: 7.4% of revenue 950.4 16.5% Operating Margin: 2.6% Net Margin: (6.2%) Cash Flow from Operating Activities: $395.0 million Mobile and Consumer, 24.4%** Working Capital: $595.9 million as of FY 2009 2010 2011 2012 2013 June 30, 2014 Profit Margin Long-Term Debt: $2,122 million Stockholders’ Equity: $2,594 million as of Net Margin Operating Cash Flow Healthcare 38.6% June 30, 2014 2009 (2.0%) $258.7 million Mobile and Consumer 29.8% Market Capitalization: $5.26 billion as of 2010 (1.7%) $296.3 million Enterprise 24.4% August 18, 2014 2011 2.9% $357.4 million Imaging 40.3% Employees: 12,000 2012 12.5% $473.0 million *Segment total includes ($102.4 million) in acqui- Revenue per Employee: $154,608 2013 (6.2%) $395.0 million sition related revenue adjustment. FY 2014 Estimated Revenue: $1.97 billion **Nuance’s Automotive Speech Division, part of to $1.98 billion Nuance Automotive Revenue the Mobile and Consumer segment, accounted FY 2014 Automotive Revenue: $150 mil- for an estimated 8.6% of total segment revenue. lion, roughly Estimated Automotive Products: Voice and content solutions $150 million Mobile and Consumer Revenue Nuance’s 2013 fiscal year ended on by Fiscal Year, in $ Millions September 30, 2013. CAGR: 10.4% $30 million The company that became Nuance was incorporated in 1992 under the name Visioneer, Inc. Visioneer acquired Scan- FY 2007 FY 2014 393.3 508.3 479.2 465 Soft, a scanner hardware and software com- pany, from Xerox Corp. in 1999. Visioneer 2007 to 2014 CAGR: 25.8% FY 2011 2012 2013 2014 (Est.)* then changed its name to ScanSoft, Inc. In 2001, ScanSoft bought the speech and lan- than 1,200 voice and language scientists *Automotive revenue was roughly one-third of the guage technology business of the bankrupt and has some 4,000 patents and patent Mobile and Consumer segment in FY 2014. Lernout & Hauspie for $39.5 million. Ler- applications filed. According to Nuance, nout & Hauspie had acquired Dragon Sys- the eight largest handset makers and the from about $30 million in FY 2007 to an tems in 2000. ScanSoft acquired Nuance ten largest automakers use its products. estimated $150 million in FY 2014, a Communications, which owned call center Standard and Poor’s gives Nuance a BB- 25.8% annual growth rate. The bulk of automation and directory assistance speech credit rating, a non-investment or junk automotive revenue today is still embedded technologies, in 2005, and adopted the grade, meaning the “company faces major speech (speech recognition and text-to- Nuance Communications name the same ongoing uncertainties to adverse business, speech), although connected speech and year. Nuance’s Dragon NaturallySpeaking financial and economic conditions.” connected content is a quickly growing transcription and desktop products are well product segment. known to consumers and Nuance leverages Automotive According to Nuance’s estimates, 50% the Dragon brand in automotive as well Automotive has been a relatively small of new cars in the United States are being with its Dragon Drive platform. part of Nuance’s business historically, given equipped with speech recognition. In Over the last five years, Nuance’s sales the challenges associated with producing Europe the penetration is lower, currently have grown at more than 18% annually. accurate speech recognition in the noisy car at approximately 40%. In 2013, about 25 Net margin has been positive in only two environment, but automotive revenue has million new vehicles were equipped with of those years. The company employs more grown very quickly over the last seven years, Nuance speech or language technology.

Page 4, September 2014 The Hansen Report on Automotive Electronics, www.hansenreport.com Nuance Communications

Nuance (NUAN) Earnings per Share Nuance’s Long-Term Debt Nuance’s Largest Automotive USD in $ millions 2,110 Tier-One Customers 1,740 (Listed alphabetically) Largest in FY 2013* Bosch 888.6 851.0 853.0 Denso Fujitsu Ten Harman Other Major Automotive Customers FY 2009 2010 2011 2012 2013 Garmin Nuance shares are traded on the NASDAQ. Hyundai Mobis Nuance’s Largest Automotive LG Automotive End Users/Customers Magneti Marelli Nuance Revenue by Product Type (Listed alphabetically) Microsoft Audi Mitsubishi Electric FY 2013 Revenue: $1,855.3 million BMW Parrot TomTom Maintenance Product and licens- Fiat Chrysler and support, ing, 40.6% Ford Visteon 14.5% GM Honda *Which customers are on top in any given Hyundai year often changes depending on what is Mercedes shipped and when, and how each deal is Renault structured. Subaru Professional services and hosting, 44.9% Suzuki understanding, but the two companies also Toyota license each other’s technologies. In some While Nuance supports some 50 differ- automotive applications, VoiceBox’s natu- ent languages, English is the most fre- ral language understanding and integration quently used. Most speech-equipped cars in OEMs, even if the features are not used by is layered on top of Nuance’s core speech the European market support English, all consumers,” said Ms. Vital. technology. In other cases, Nuance is a cus- French, Italian, German and Spanish. The According to the company, automotive tomer of VoiceBox, for example Nuance premium European brands have more lan- customers buy from Nuance because they uses VoiceBox technology in its connected guage capability including Northern and know they’ll get high quality backed by platform. The complexity of the supply Eastern European. In the North American more than a decade of in-house experience chain, specifically around connected cars, is market, vehicles typically support U.S. Eng- and expertise. Another reason Ms. Vital increasing and overlaps like these are not lish, Canadian French and U.S. Spanish. noted is that they can get a customized, uncommon. Traditionally, most automotive revenue integrated product from one supplier: has been generated on a license-per-vehicle “What is unique about Nuance is we now Continued on page 6 model, according to Fatima Vital, Nuance’s have a solution that combines content, director of marketing for automotive. speech recognition and natural language Automotive Related Acquisitions “Now, as we move into connected ser- understanding. By combining those ele- vices and connected speech, the revenue ments you can get a much better user expe- Tweddle Connect model can depend on several factors, for rience than doing it separately.” Nuance Content service delivery platform acquired example whether the feature or functional- can also provide customers with a global from the Tweddle Group in 2013 ity is available in every single car and just solution that OEMs can employ in all their SVOX needs to be enabled, or if it is a feature the regional markets, including China and A privately held provider of voice solutions driver needs to subscribe to.” An OEM other Asian markets. “We have teams in for in-car systems and consumer electron- might opt to pay per transaction with China, we have language coverage, we are ics, acquired in 2011 Nuance’s server, or pay a flat fee for the building content coverage and we are build- lifetime of the service or for a defined ing our server infrastructure,” said Ms. Harman’s Speech Technology Business period of service. “We see that there are Vital. Acquired in 2009 for its experience in exe- hurdles if consumers have to subscribe. We Nuance’s biggest competitor in the auto- cuting automotive projects expect the features we enable will be motive market is VoiceBox Technologies, a included more and more as standard by the leader in conversational, natural language

The Hansen Report on Automotive Electronics, www.hansenreport.com Page 5, September 2014 Nuance Communications

Dragon Drive Connect In a move that brings it one step up the supply chain closer to the carmakers, Nuance acquired the Tweddle Connect business from the Tweddle Group in May 2013, for $83.3 million in cash. Tweddle Dragon Drive supports both em- Connect is now incorporated into bedded connectivity (via the head Nuance’s Dragon Drive Connect platform. unit, built-in SIM card) and smart- phone connectivity (3G, LTE). Used by Toyota since 2011 to support its Entune and Lexus Enform infotainment systems, the service delivery platform inte- grates the vehicle’s embedded infotainment software with cloud-based and smartphone- The Tweddle Connect platform is now part of Nuance’s Dragon Drive platform, which includes based applications, services and content. automatic speech recognition, natural language understanding, content retrieval and conversa- The platform provides authentication ser- tional capabilities. Note: HU DCM (above) is the head unit data communications module. vices and aggregates cloud-based services such as Bing, OpenTable, Pandora and since Dragon Drive Connect and its Trans- iHeart Radio. Distinctions Claimed by Nuance form Engine are in the cloud, the APIs to u “The acquisition of the Tweddle Con- First to equip a car with speech-enabled Web-based content can be updated without dialing, in 1996 the involvement of the head unit supplier nect business follows the 15-year evolution u that speech technology has taken in the First line-fitted voice destination entry, in or the carmaker, minimizing the need for auto industry, from phone messaging, to 2005 software updates to the head unit itself. u First one-shot voice destination entry, in u navigation with destination entry, to music Dragon Drive Link manages cross- 2008 search by voice,” explained Arnd Weil, vice u platform connectivity between the vehicle First multilingual music search, in 2008 and smartphones—carrying an in-process president and general manager for automo- u First in-car message dictation, in 2012 app interaction on a smartphone directly tive. “Now, as carmakers penetrate more u Nuance technology is deployed in more into the in-car system. For example, people deeply into connected car scenarios, while than 90 million cars and 50 million porta- can enter destination detail on their dealing with the concerns about distracted ble navigation devices. driving, natural speech has become a u In 2013, about 25 million new vehicles Dragon Drive navigation smartphone app, required feature. But natural speech only were equipped with Nuance voice or which then automatically becomes available works if you have a good handle on the language technology. via the app in the head unit. Dragon Drive content you are trying to access. So we u Every carmaker in North America and Link automatically authenticates the driv- decided that we need to deliver not only Europe that uses voice or language tech- er’s user profile information for apps and the natural speech interface but also the services once he enters the car. nology employs technology from Nuance. u content. The Tweddle platform was not Dragon Drive Embedded combines all only proven by Toyota, but it is also the Nuance won’t compete with telematics embedded speech components such as text- most robust.” service providers such as OnStar, Sirius to-speech, natural language understanding, Nuance has a long-term contract to sup- XM, Verizon and Sprint in safety and secu- and speech signal enhancement. port Toyota with the Dragon Drive plat- rity telematics and hopes those companies form, “into the next decade,” according to will be open to partnering with Nuance to Car Owners Unhappy with Today’s a Nuance press release. Thus far, nearly all provide connected infotainment. Speech Interface the revenue for the platform has come Nuance’s all-in-one automotive solution The J.D. Power 2014 Initial Quality from Toyota. Fiat Chrysler just began using integrates the company’s voice and lan- Study identified speech recognition as the Dragon Drive for off-board voice recogni- guage software embedded in the vehicle biggest problem reported by new vehicle tion. Nuance’s Dragon Drive platform sup- with applications and content in the cloud, owners. Of all the problems reported, 23% ports 1.6 million Toyota/Lexus vehicles on and/or with connectivity and applications had to do with the infotainment system, the road. on a brought-in smartphone. and one-third of those were problems with The Connect platform is similar in u Dragon Drive Connect accesses the voice recognition. some respects to Harman’s Aha Radio Nuance’s cloud-based speech technologies Nevertheless, Nuance says it offers the cloud platform. Like Aha, Nuance will be and processes content retrieval from the best speech recognition engine on the focused on connected infotainment. How- cloud. The Connect architecture keeps the planet. “Wherever we have benchmarked ever, Nuance offers a customizable, OEM- dialog between the speech processor and VoCon [Nuance’s speech recognition tech- focused and fully integrated solution that the content provider (the arbitration logic) nology], no matter which country, or supports a broader portfolio of content in the cloud, without involving the head against which competitive offering, we have providers. unit, so latency is minimized. Furthermore, won,” declared Mr. Weil. “However, the

Page 6, September 2014 The Hansen Report on Automotive Electronics, www.hansenreport.com Nuance Communications

Nuance’s Network of Content Service Providers (CSPs) content coming from the cloud. “We clearly see a trend for nearly all carmakers Nuance partners with a network of content CSPs for Infotainment to use both, the intelligence that’s embed- service providers so it can optimize its nat- iHeartRadio – U.S. radio streaming portal ded and the intelligence in the cloud, ural language understanding software to fit with more than 50 million users accessed by the car,” Mr. Weil noted. each CSP’s data format for how content is Deezer – Headquartered in France, Deezer Improvements are also coming in the searched and how the search results are has 26 million streaming radio users way the speech interface deals with the presented to the driver. Pandora – Available in U.S., Australia and noisy car environment. “For a long time we New Zealand, with 250 streaming radio have offered things like noise cancellation CSPs for Navigation subscribers algorithms, echo cancellation techniques Autonavi – A map and navigation service Rdio – U.S. streaming radio service with and beam forming from two or more leader in China several million users Bing – Microsoft’s global search engine Slacker – Available in the U.S. and Canada, microphones. We have clearly seen a large HERE – POI, maps and routing data from offers 10 million songs and 200 uptake of that technology over the past Nokia, formerly known as Navteq expert/genre stations year,” he added. Infogroup – U.S. POI data provider TuneIn – U.S. radio streaming provider with INRIX – Real-time traffic data based on 50 million users offering access to more Driver Distraction and Texting by Voice input from more than 100 million mobile than 100,000 radio stations According to a 2013 report by the phones NASDAQ & Dow Jones – Financial news American Automobile Association (AAA), TomTom – POI, maps and routing data, and stock information Measuring Cognitive Distraction in the Auto- formerly Tele Atlas Reuters – The latest news from around the mobile, “The adoption of voice-based sys- Accuweather – Weather forecast for all world tems in the vehicle may have unintended parts of the world STATS – Sports data and content consequences that adversely affect traffic Sina – A Chinese language Web portal of- safety.” Using state of the art speech-to-text fering various content including weather CSPs for Social Media equipment not yet available in production OpenTable – Restaurant reservations Facebook vehicles, and with no visual interaction or OPIS – Fuel price information in the U.S. Twitter hand held devices, AAA found that send- Parkopedia – Parking availability and pric- Wibo – Social network and micro-blogging ing speech-to-text messages was more than ing for more than 6,000 cities in 45 coun- service in China with more than 600 million three times more cognitively distracting tries users than the single task of driving. Yelp – A leading restaurant review service That conclusion differs from Nuance’s. in North and South America and Europe The company believes that sending text messages by voice is safer if the task doesn’t final benchmark is a 50-, 60- or 70-year-old speech interfaces that won’t hit the road require visual or manual interactions. “We person trying to use the car’s speech inter- until 2018 or 2019. Carmakers are not have built speech interfaces in our labs and face for the first time. Or the 25- or 30-year- competitive with the latest and greatest found that dictating messages while driving old person who is used to the speech expe- smartphone features. It is not a fair com- is no more distracting than controlling any- rience on a smartphone.” parison.” thing else in the car,” said Mr. Weil. “If Some of the dissatisfaction with the Big improvements are on the way. More you can have a dialog that is voice only, vehicle’s speech interface is due to rising automotive speech interfaces will soon be that doesn’t involve looking away from the expectations. Many car owners have experi- able to accommodate natural speech, mak- road at a display, you can safely minimize enced the speech interface on their smart- ing them more robust against variations in distraction.” u phones and find it works much better. the way people speak. According to Mr. Also, the number of speech-enabled fea- Weil, systems will understand what is tures has grown quickly, providing more requested from the top of the menu, mean- Nuance R&D Locations exposure to customers who find them ing that “without maneuvering through a Burlington, Massachusetts, USA lacking. menu tree, the car understands every com- Cambridge, Massachusetts, USA “Clearly, those of us in the automotive mand, whether you are talking about a Seattle, Washington, USA industry need to do a much better job with music selection or entering a destination Montreal, Canada the speech interface,” said Mr. Weil. “One into the navigation system, or asking for a Shanghai, China of the problems is that carmakers take content service like weather or stock infor- Beijing, China much longer [than smartphone makers] to mation.” Tokyo, Japan get things introduced. Even with very con- As more cars are connected the speech Aachen, Germany crete project work, it takes a year or two interface will benefit not only from Ulm, Germany before you see that on the road. Today our improved embedded speech technology, Gent, Belgium research people are working on automotive but also from a lot more intelligence and Zurich, Switzerland

The Hansen Report on Automotive Electronics, www.hansenreport.com Page 7, September 2014 Infineon Has Some Power Semiconductors on Allocation Orders for some of Infineon’s power to the wafer fab. “We’ve got our new wafer allocations. “That would be typical behav- devices, specifically MOSFETs and pro- fab in Kulim, Malaysia, with enough floor ior,” said Mr. Slusser. “People say, ‘If I tected switches, are beyond the company’s space, but we still have to wait for the new can’t get what I want, I’ll double my orders. capacity to deliver them, so Infineon has fab equipment to be delivered,” said Mr. If I get half I’ll get what I need.’ We base put those parts on allocation, meaning cus- Slusser. our investments in capacity on business tomers are getting fewer parts than they Mr. Slusser thinks the increase in awarded and 12 months of order visibility. ordered. demand for Infineon’s power devices is a If the orders suddenly increase, we make a The reason for the shortages, according result of the steps carmakers have taken judgment call to determine how much of it to Shawn Slusser, vice president of Infin- lately to improve fuel economy and reduce is real. … We have already made invest- eon Automotive for the Americas, is that CO2 emissions, by electrifying such things ments to add capacity and could be out of business is much better than expected. as power steering and the fuel pump. On this allocation situation in one or two quar- “The automotive semiconductor market top of that, luxury carmakers have been ters. We continue to invest in the future, has historically grown at about 6% per adding more comfort and convenience fea- we have room to grow, and we are commit- year. But over the first half of 2014 we saw tures involving small motors, which require ted to working with our customers.” nearly five times that growth rate for these power devices to drive those motors. In the fiscal year ending September 30, particular products.” But some of the increase in demand is 2013, Infineon’s capital expenditure The shortages first showed up on the probably a result of over-ordering by some totaled 378 million euros for the corpora- back end, in assembly and test. Capacity of Infineon’s customers who want to be tion, down 58% from the prior year. In FY was added, but then the shortages moved sure they have enough parts, despite the 2014 capex rose to 650 million euros. u

Features… Continued from page 2 Infiniti and Audi. The Infiniti QX60 and Working with AT&T as its carrier, GM 2015, after a decade of debate. The system Jeep Cherokee will automatically apply the plans to roll out 4G OnStar as a standard requires embedded modems in all new brakes if an oncoming car is detected. feature in roughly 30 MY 2015 models. vehicles, which would automatically notify GM has been offering new car buyers a emergency service providers if an airbag Connected free, three-month or 3-gigabyte trial of the deployed, or the call could be initiated The inclusion of 4G LTE connectivity service and the company reports a 98% manually. Vehicle location and identifica- in cars from Audi and especially GM cre- take rate. How many of those free subscrib- tion data are to be transmitted over a voice ates an array of possible use cases, from ers will opt to pay for a data plan remains channel. Yet another eCall delay was mobile hot spots for brought in Wi-Fi to be seen. recently announced, moving the roll out to devices to over-the-air software updates for While still based on 2G and 3G connec- 2017. Several OEMs in Europe have vehicle systems and diagnostics. (See the tivity, eCall, Europe’s emergency accident already implemented their own smart- June 2014 Hansen Report for more from notification mandate, was finally scheduled phone-based safety and security systems, u AT&T on leveraging the 4G data pipe.) to go into effect in Europe in October and more are likely to do the same.

Ultracapacitors… Continued from page 1 with six cells is needed for operation at 14 are confident that significantly more busi- that use them. “We see a lot of promise for volts. At a half-cent per cell, six 3,000-farad ness is coming their way. Maxwell Technol- ultracapacitors in multiple applications, cells would cost $90, not including the ogies hasn’t yet booked any orders beyond not only in the automotive world but in module’s housing, wiring and assembly. the PSA Peugeot-Citroën application but subway and bus systems and in green Some carmakers have considered using has lately been talking to a lot of carmakers energy applications,” said Scott Averitt, a ultracapacitors in 48-volt applications, but and sees momentum building. technical expert with Robert Bosch LLC. that would require 18 cells at a cost of In correspondence with The Hansen “As those volumes increase, ultracapacitor $270 for the capacitor cells alone. Even at Report, Nippon Chemi-Con describes the prices will come down, and that will drive the target half-cent per farad price, most of market for its double-layer capacitors as more automotive applications.” the early ultracapacitor applications will be “very promising [given] the growing con- Continental wrote: “We see high poten- for 12 volts. cern for the environment, worldwide.” tial for double-layer capacitors, especially in The company writes that it has already 12-volt networks. … We see more potential More Ultracapacitors Coming landed additional business beyond Mazda’s for DLCs in vehicles with start-stop systems Despite the fact that only two ultraca- i-ELOOP application. equipped with pinion starters, where the pacitor automotive applications have thus Bosch hasn’t yet sold a system with an customer expects fast restarts and support u far reached production, suppliers of them ultracapacitor but has proposed systems for cold starts.”

Page 8, September 2014 The Hansen Report on Automotive Electronics, www.hansenreport.com