THE HANSEN REPORT ON AUTOMOTIVE ELECTRONICS. A Business and Technology Newsletter

VOL. 18, NO. 7◆◆ PORTSMOUTH, NH USA SEPTEMBER 2005 Yamar DC Power-Line Bus MY 2006 Vehicle Gains Momentum Features Roundup Yair Maryanka, founder and CEO of work: “First, there is noise and second, the the Israeli firm Yamar Electronics Ltd., power line is not a controllable medium was working in Japan in 1992, when he for communications. At any moment the The Influence of U.S. Mandates hit upon the idea to create a multiplexing air conditioning or the lights might be While most car advertising in the U.S. scheme that would use the vehicle’s power switched on, which creates impulse noise. today is all about power and performance, cables for communications between elec- And the line impedance is unpredictable. a May 2005 survey by the FreedomCAR tronics components. Because it is random, there is no way to and Vehicle Technologies Program of the He recalled, “Japanese consumers were filter the noise. U.S. Department of Energy found the purchasing navigation systems in the af- “We came up with the idea that rather most important attribute for U.S. consum- termarket, but it took eight hours to get than try to fight the noise, we should live ers in their choice of a new car is depend- the systems installed. I said, ‘That’s crazy. with it. We use forward error correction ability. Thirty-three percent of survey It only takes eight hours to assemble an coding, so when we transmit the signal we respondents ranked dependability number entire car.’ Then I thought, ‘What’s com- add information that allows the receiving one; 28% said safety was most important. mon to all electrical and electronics in- side to correct those errors.” Sophisticated electronics hardware and stalled in the car?’ The power line. I had Yamar presently offers a range of seven software in engine, powertrain and chassis some experience with batteries, so I knew transceivers for multiplex power-line com- control systems make today’s vehicles why it is difficult to use the power line. I munications using either UART/LIN, SPI highly reliable overall while improving also knew that digital communications or CAN protocols. The integrated circuits performance, reducing emissions and technology could overcome those prob- range in bit rate from 10 Kbps to as high making driving safer. lems.” as 1.7 Mbps. There are transceivers that Only 11% of the DOE survey respon- Yamar Electronics, founded in 1994, can transmit data at 250 Kbps or 500 Kbps dents said fuel economy was the most im- took a few years to convince its target using the CAN protocol, and at 60 Kbps portant factor, although in May the market, the automotive industry, that it using the LIN protocol. average price for a gallon of gasoline in had developed a communication method- Mr. Maryanka says the company has the U.S. was only $2.11. In comparison, ology good enough to overcome the diffi- already shipped thousands of its transceiv- in 1980, when gas was $2.80 per gallon culties of the DC power line. “Until the ers to a second-tier customer that uses (in constant 2004 dollars), 42% of respon- last three or four years, no one believed it them to implement an aftermarket “gad- dents in a similar survey rated fuel would work,” said Mr. Maryanka. “When get.” Part of the device is installed in a economy as the most important attribute we demonstrated it to OEMs, they looked different location from the controller, in choosing a new car. to see if we were doing any tricks.” with communications between the two As U.S. fuel prices rise (past $3.00 per He explained the major challenges to linked via the power line. gallon in most of the country at press making DC power-line communications Yamar has eight other projects in the time), consumers will demand better fuel works, four with carmakers and four with economy and continue to migrate toward Benefits of Yamar DC-BUS tier-one suppliers, which cover a variety of smaller, more fuel-efficient vehicles. The Power-Line Communications different applications. Yamar is working current administration and Congress are on two of those projects in cooperation disinclined to mandate significantly ◆ Saves the cost of signal wiring with SPARC (Secure Propulsion using greater through changes in ◆ Saves the cost of a separate network Advanced Redundant Control), a Euro- CAFE (corporate average fuel economy) interface pean Commission-funded program, whose standards or increased fuel taxes. New ◆ Simplified installation; only the DC goal is to improve traffic safety and effi- CAFE regulations recently proposed for power line is required ciency for heavy vehicles through the ap- light trucks and SUVs call for modest in- ◆ Extensible, additional nodes can be plication of intelligent x-by-wire creases from model year 2008 through added to the network after installation technologies. 2011, according to six size classifications. ◆ Multiple independent CAN/LIN networks In a SPARC project with Mercedes, For example, by MY 2011, small SUVs can share the same power line by Yamar is developing a 500 Kbps power- would need to average 27.1 miles per gal- using different carrier frequencies Turn to Features, page 2 Turn to DC Bus, page 8 New Features... Continued from page 1 lon, but full-sized pickup trucks only need headlight glare, lighting and signaling All-wheel drive (AWD) is becoming to reach 21.3 mpg, compared with the standards, new braking technologies, more widely available as well. The U.S. current standard for all MY 2007 light roadway departure warning systems, rear- Department of Energy noted that in MY trucks of 22.2 mpg. end collision warning and drowsy driver 2005, AWD was offered on 50 car models The U.S. government has been less warning systems. (not including light trucks) in the U.S., timid about regulating safety. The Na- Brake assist, which uses sensors to de- compared with just ten models in 1999. tional Highway Traffic Safety Administra- tect panic stops and quickly applies full Rear vision cameras to prevent acci- tion (NHTSA) is considering upgrading braking pressure, is migrating to more dents and assist in parking maneuvers are side impact protection (FMVSS 214) to non-luxury vehicles, for example the Kia becoming more widely available, usually “require automakers to provide head pro- Spectra in the U.S. As part of its pedes- bundled with a navigation system. tection in side crashes and to enhance trian protection initiative, the European thorax and pelvis protection for a wider Union proposed a regulation that would Feature Highlights range of vehicle occupants involved in require carmakers to install brake assist in What follows is a sampling of some of such crashes,” most practically accom- new vehicles beginning in 2008. NHTSA the electronics features carmakers are of- plished by installing side airbags. The will be testing and researching brake assist fering for the current model year. transportation bill signed by President from 2006–2008. Applying full brake pres- In the newly-redesigned 2006 BMW 3 Bush in August 2005 calls for passenger sure immediately in an emergency cuts series, stability control, side airbags and protection standards in side-impact stopping distances considerably. side curtain airbags are standard, as are crashes by 2008. Laser- or radar-based sensing systems two-stage LED brake lights. BMW’s Brake Protecting occupants in side crashes is that anticipate crashes and activate safety Force Display, already standard on the 7 one of NHTSA’s near-term regulatory pri- systems in the vehicle have been available and 5 series, expands the number of LEDs orities, as is preventing rollovers. Tire for a few years on high-end models from illuminated in sudden panic braking ac- pressure monitors, which help prevent Mercedes, from and Toyota in Ja- cording to the rate of deceleration de- rollovers by alerting the driver when the pan, and others, but are still a long way tected by ABS sensors. Available options tire pressure on any wheel falls below 25% from mainstream. The new Audi Q7 SUV, include: auto-dimming mirrors, run-flat of the recommended pressure, are required due in 2006, will offer 24 GHz radar-based tires, active steering, adaptive cruise con- on 20% of carmakers’ production in MY blind spot detection that warns a driver trol, rear park distance control and adap- 2006, 70% of MY 2007 and 100% in MY changing lanes if a car is approaching rap- tive headlights. Not standard, iDrive 2008 and thereafter. idly from behind. comes bundled with the optional voice Electronic stability control (ESC) has Audio systems that play MP3 or navigation system. been proven in many studies to substan- WMA-formatted CDs are becoming com- tially reduce rollover incidents and, ac- mon, as are auxiliary input jacks for iPods continued on page 3 cording to the Insurance Institute for or other portable audio devices. GM offers Highway Safety, the safety feature could iPod connections on its HHR retro-style THE HANSEN REPORT ON potentially save up to 7,000 lives each SUV, the Impala and Monte Carlo, as AUTOMOTIVE ELECTRONICS year in the U.S. alone, if all cars were well as the Pontiac Solstice, Saturn Vue © 2005 Paul Hansen Associates, 150 ESC-equipped. NHTSA has planned a and Ion, the Buick Lucerne and the Pinehurst Rd., Portsmouth, NH 03801, preliminary cost/benefit estimate of ESC Cadillac DTS. In Japan, Nissan, Mazda USA. Telephone: 603-431-5859. Fax: 603- for 2005, leading to speculation that a fu- and Daihatsu offer proprietary iPod com- 431-5791. Email: [email protected]. ture mandate for ESC is not out of the patible stereos. In Nissan vehicles, iPod All rights reserved. Materials may not be question. The 2005 transportation bill can be operated via the touch-screen reproduced in any form without written per- directs NHTSA to create stability stan- navigation display. BMW was first to offer mission. The Hansen Report on Automotive dards by 2009. Market dynamics, however, an integrated iPod connection. According Electronics is published 10 times a year, could make regulation unnecessary. Ac- to Apple, five carmakers currently offer monthly; July/August and December/Janu- cording to Consumer Reports, electronic integrated iPod connectivity, and seven ary are combined issues. The annual sub- stability control was already offered in the more soon will. scription rate is $717 (North America), $747 U.S. on 60% of MY 2005 models. DVD entertainment systems and even (elsewhere). Back issues are available for NHTSA lists 139 model year 2005 ve- navigation sales are on the rise in North $50 each; see our online index at hicles with available ESC. As consumers America. The Consumer Electronics As- www.hansenreport.com. Paul Hansen Asso- become better educated about the benefits sociation, which tracks the U.S. market, ciates is a strategy and market research and availability of ESC, and as the price predicts that factory sales of combination firm consulting to the electronics industry. comes down, take rates of optional ESC mobile video/navigation devices will Publisher/Editor Paul Hansen will improve, and carmakers will increas- reach 935,000 by the end of 2005. Alpine ingly make it a standard feature. Electronics forecasts penetration of dash- Managing Editor/ Brianne Wolfe NHTSA also has plans to further study mounted displays will reach 22% of new Circulation Manager driver distraction, indirect vision systems, cars by 2010, worldwide. ISSN 1040-1105

Page 2, September 2005 The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com New Features... Continued from page 2 BMW says it is the first carmaker to (EARS) unlocks the doors, shuts off fuel ULEV II (ultra-low emission vehicle) offer a digital radio receiver as a factory- and turns on both the interior lights and standard, the same low emission levels installed option. Drivers of the 2006 7 exterior hazard lights. Also standard are achieved by the Escape Hybrid. The V8- series sold in the U.S. will be able to tune electronic stability control and brake as- equipped Explorer meets California’s LEV in CD-quality FM broadcasts and static- sist. Options include SmartBeam head- II classification. free AM from any local radio stations that lights, navigation, Uconnect Bluetooth Ford’s Fusion, an all-new midsize car, have licensed iBiquity Digital’s HD Radio cell phone node and rear object detection. comes with standard dual-stage front technology. Buyers of the 2006 Dodge Ram Mega airbags with front passenger weight sensor Infrared night vision and Gentex’s Cab pickup can opt for a $1,500 naviga- and driver seat-position sensor. Side SmartBeam automatic control tion system. airbags and side curtain airbags are op- will be offered on 2006 BMW 5-, 6- and Mercedes’ newly designed S Class is of tional, as is ABS. The 4-cylinder engine 7-series models. course loaded with advanced safety and meets California PZEV (partial zero emis- Chrysler’s 2007 Dodge Caliber, the convenience features including infrared sion vehicle) standards; the 6-cylinder new entry-level replacement for the night vision (from Automotive Lighting, meets California ULEV II. A hybrid ver- Neon, is due in mid-2006. A continuously a subsidiary of Magneti Marelli), PreSafe sion “in a later model year” will be Ford’s variable will improve fuel active safety system, first introduced on next hybrid offering, following the Escape, economy by 6% to 8% compared with a the MY 2003 S Class, and in Europe, Mercury Mariner and Mazda Tribute hy- traditional 4-speed automatic transmis- flashing brake lights to warn approaching brids. sion. Electronically controlled all-wheel drivers of emergency stopping. That fea- The MY 2007 Saturn Vue coming out drive is available. Chrysler will use the ture was recently approved by the Euro- in mid-2006 from General Motors will new, fuel-saving 4-cylinder World Engine, pean Union but rejected by NHTSA, have an integrated starter generator. GM jointly developed with Hyundai Motor which said that Mercedes hadn’t proved predicts the mild hybrid will produce 10% and Mitsubishi Motors, for the first time that flashing lights provide a major safety savings in fuel economy. in the Caliber. A turbo-diesel Caliber will benefit, so the steady light requirement The Pontiac Solstice compact convert- be offered in Europe. for brake lights would apply in the U.S. ible offers no ABS, side airbags or stability The new Jeep Commander, a large Ford’s Explorer, the SUV that begat control. Standard on most GM models, SUV, provides standard multi-stage front industry-wide rollover prevention and OnStar is part of the “Power Package” airbags with occupant classification for mitigation measures, features standard option, which bundles power windows the passenger side. Optional side curtain electronic stability control, Ford’s trade- and door locks, keyless entry and remote airbags for all three rows of seats work marked Roll Stability Control and a tire start. An auxiliary input jack on the audio with the Electronic Roll Mitigation fea- pressure monitoring system in the 2006 system is standard. ture, which uses sensors to measure the model. Also standard are multi-stage front The 2006 Cadillac DeVille replace- severity of the crash and deploy the side airbags and front side airbags with occu- ment, DTS, comes loaded with safety and airbags accordingly. When an airbag is pant classification system for the passen- convenience features including: dual-stage deployed (front or side), the standard En- ger side. Side curtain airbags are an front passenger airbag with occupant posi- hanced Accident Response System option. The V6 version meets California’s continued on page 8 Freedonia Group Forecasts 7.5% Growth in Auto Electronics

World OEM Automotive Electronics Demand 2004 – 2009 in $ Billions 2004 World OEM Auto Electronics Demand by Product Group 2004 2009 Annual Total Market 2004: $86.5 billion Growth Safety and Security, Engine and North America 27.8 38.0 6.5% 29.3% Western Europe 26.1 34.8 5.9% Drivetrain, 46.5% Asia/Pacific 26.3 39.5 8.5% Other Regions 6.3 11.7 13.2% Entertainment, Worldwide Total 86.5 124.0 7.5% 14.6% Navigation and Data: The Freedonia Group Data: The Freedonia Group Instrumentation, 9.6% The Freedonia Group’s recently re- ket. According to the report, growth in scent markets.” leased World OEM Automotive Electronics emerging markets “is being helped by the The 396-page study, published in June study predicts the global market for auto rapid transfer of new product designs from 2005, is available for $5,200. To order, or electronics will reach $124 billion in five Triad [Western Europe, the U.S. and Ja- for more information, call 440-684-9600 years, with the Asia/Pacific region sur- pan] markets—a change from the past or visit www.freedoniagroup.com ◆ passing North America as the largest mar- when obsolete designs were used in na-

The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com September 2005, Page 3 The Company Profile... Alpine Electronics

Thumbnail Sketch Alpine Sales and Net Margin Headquarters: 1-1-8, Nishi-Gotanda, in ¥ Millions ($ Millions) Shinagawa-ku, Tokyo 141-8501, Japan; FY 1999 to FY 2004 Annual Growth Rate of Sales: 5.4% www.alpine.com FY 2004 Sales: ¥222,779 million ($1,982 million) R&D Expenses*: 10.1% Net Margin: 3.6% Sales 171,074 181,615 196,092 222,367 213,020 222,779 230,000 240,000 250,000 FY 2004 Net Cash Provided by Operating (1,521) (1,616) (1,744) (1,978) (1,895) (1,982) (2,046) (2,135) (2,224) Activities: ¥12,472 million ($110.9 million) Stockholders’ Equity: ¥80,336 million FY 1999 2000 2001 2002 2003 2004 2005* 2006* 2007* ($714.6 million) as of March 31, 2005 Market Capitalization: about ¥106,019 Net Margin 1.8% 1.8% 2.0% 2.8% 3.4% 3.6% 4.8%* 5.0%* 5.2%* million ($943 million) as of August 1, 2005 Net Profit 3,098 3,284 3,914 6,138 7,253 7,932 11,040 12,000 13,000 FY 2004 Return on Equity: 9.4% (27.6) (29.2) (34.8) (54.6) (64.5) (70.6) (98.2) (106.7) (115.6) FY 2004 Return on Assets: 5.3% FY 1999 to FY 2004 Annual Growth Rate of Profits: 20.7% Working Capital: ¥54,546 million ($485.2 *Estimated million) as of March 31, 2005 Note: In 2004, Alpine transferred ¥5 billion ($45 million) worth of components sales to Alps Employees: 8,350 as of March 31, 2005 Electric, its parent company. Sales per Employee: ¥26.68 million ($237,300) Outside Sales of Alpine Products Alpine Sales and Operating Income Products: Automotive audio and navigation by Year by Product Segment equipment Sales of Alpine’s audio products have declined, FY 2004 Sales: Top Customers: #1 Honda/, #2 while sales of information and communications ¥222,779 million ($1,982 million) Mercedes products, especially navigation, have increased. Ownership: Alps Electric Co. Ltd. owns Information and Audio, 55.2% ¥ millions 46.02% of the company. 160000 Communica- *Includes labor and other expenses reported as 140000 148,856 135,029 tions*, 44.8% 120000 122,964 cost of sales 100000 99,815 Note: Alpine’s fiscal year 2004 ended 73,511 80000 77,991 FY 2004 Operating Income: March 31, 2005. 60000 40000 ¥10,148 million ($90.3 million) 20000 0 Information and Audio, 63.4% Background 2002 2003 2004 Communica- In 1967 Alps Electric and Motorola Audio Info & Communications* tions*, 36.6% FY 2002–FY 2004 Annual Growth Rates: formed a joint venture to produce eight- Audio –9.1% track and cassette tape players for the au- Information & Communications 16.5% tomotive market. Motorola sold its equity *includes navigation products *Includes navigation products in the joint venture in 1978, and the busi- reached in FY 2004, when income who account for 75% of Alpine’s sales, are ness became Alpine Electronics, founded reached 5.3% of assets. At its annual fighting tooth and nail to cut costs. As as a consolidated subsidiary of Alps Elec- meeting on June 28, 2005, Alpine an- carmakers move toward all-inclusive mul- tric. Although Alpine Electronics stock is nounced an annual dividend of ¥10 per timedia systems that integrate the audio traded on the Tokyo Stock Exchange, share for the fiscal year ending March 31, head unit with navigation, video and Alps Electric remains the major stock- 2005. communications functions, competitive holder with just over 46% of the total out- Today Alpine is a world-class supplier pressures will escalate further. The auto- standing shares. of premium mobile audio, video and navi- motive multimedia segment already has Alpine’s sales have grown more slowly gation systems for OEMs and the after- too many suppliers. Alpine faces stiff com- than the market, but its net profits have market, with an expanding product petition for valuable center-stack real es- grown from ¥3,098 million ($27.6 mil- portfolio that includes integrated multi- tate from much larger players such as lion) in FY 1999 to ¥7,932 million ($70.6 media, driver-assist and communications Denso, Bosch, Siemens VDO, Aisin Seiki million) in FY 2004, a 20.7% annual systems. and Delphi, as well as from the navigation growth rate. Alpine strives to maintain The market for Alpine’s products is and audio equipment specialists like return on assets of more than 5%, a goal it extremely competitive. OEM customers, Panasonic, Pioneer and Harman-Becker.

Page 4, September 2005 The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com The Company Profile Continued

Alpine Sales by Region and by Market Alpine’s Served Market, 2005 and Ten-Year Forecast FY 2004 Sales: ¥222,779 million ($1,982 million) in $ millions 2005 2010 2015 Annual Growth By Region Rate Other, 5.3% Japan, 18.8% Audio 14,900 13,300 11,800 -2.3% Visual 5,600 10,600 15,600 10.8% North Navigation & Communications* 5,500 10,600 15,600 11.8% Europe, America, Driver Assist** 600 1,200 3,000 17.5% 39.3% 36.6% Alpine’s Served Market 26,600 35,700 46,000 5.6% *Telematics **Driver assist sensors including vehicle camera, night view, radar, sonar By Market Data: Alpine, Roland Berger, Fuji Chimera Research

Aftermarket, the German market despite huge obstacles 25% OEM, 75% Distinctions Claimed by Alpine says much about the company’s where- ◆ Introduced the world’s first navigation system in withal to compete internationally on the 1981, jointly developed with Honda Research basis of its own experience making enter- ◆ World’s first company to offer Sirius and XM tainment and navigation systems for satellite receivers Top Customers Ranked by ◆ World’s first OE supplier to implement Honda and others. According to Alpine, Percent of FY 2004 OEM Sales automotive iPod connectivity, through BMW in 1996 it was the world’s first company to ◆ First U.S. mobile equipment aftermarket offer navigation in both the United States Honda/Acura 28% supplier to introduce head units with iPod and Europe. Mercedes 18% connectivity in September 2004 BMW 16% ◆ Number-two (after Pioneer) mobile electronics New Business Booked Chrysler 13% brand in the U.S. Alpine has booked these major confirmed Toyota 4% ◆ Number-one U.S. aftermarket brand in CD/DVD pieces of business: Ford PAG 3% head units priced over $250 ◆ CD radios for Honda valued at ¥20 billion ($178 million) in sales over the project’s Global Markets Why U.S. aftermarket consumers choose Alpine life start shipping in 2006. products: Alpine claims a 33% share of its served ◆ ¥25 billion ($222 million) order from ◆ Brand reputation OEM navigation market in the United ◆ System capability Chrysler for DVD head units for all States. Alpine makes a navigation system ◆ Connectivity: the ease with which iPods and vehicle lines starts in 2006. for the Acura TL, a navigation and com- satellite radios can be connected to Alpine ◆ ¥25 billion ($222 million) order from munications system for the Acura RL and head units. Alpine’s Ai-NET architecture lets General Motors for an integrated audio/ an audio/video/navigation system for the consumers purchase a head unit and later navigation/display/HDD head unit starts Chrysler 300C. It also makes products for add on capability, for example a 5.1 Dolby shipping in 2007. the Mercedes M class, for BMW and for surround processor or navigation. Toyota vehicles made in the U.S. lation in Mercedes A-, M- and E-Class Improved Profitability Alpine benefits from its association vehicles. The deal is worth a total of From FY 1999 through FY 2004, Al- with its largest customer, Honda, one of about ¥100 billion ($890 million) in sales. pine grew annually at the rate of just the world’s most innovative carmakers, Another tough Japanese competitor, 5.4%, which is considerably slower than who is gaining share in the global auto- Panasonic, is one of several other world- its 9% annual growth during the prior motive market. Alpine’s number-two cus- class suppliers also in the hunt for some of five-year period ending in 1999. tomer, Mercedes Car Group, is also a the German infotainment business. According to Alpine Electronics vice major innovator, among the world’s first Harman-Becker, Bosch and Siemens president for brand marketing, Steve carmakers to aggressively integrate audio VDO have had the best access to the Ger- Witt, sales growth slowed during the pe- with video and navigation systems. man carmakers based on their common riod for two reasons. First, the mobile Alpine has definitely entered the fray experience within the tight German auto- electronics aftermarket, which accounted in the German OEM market for high-end motive electronics industry. And all three for 25% of Alpine sales in FY 2004, has infotainment systems, which has been suppliers—especially Harman-Becker, declined since 2002 because carmakers are dominated by companies with German which helped invent MOST, the multi- leaving little room for aftermarket compe- roots, namely Harman-Becker, Siemens media network favored by the German tition. On new vehicles, factory-installed VDO and Bosch. However, in the fall of carmakers—have had pioneering experi- audio and navigation systems are often as 2007, Alpine will begin shipping inte- ence applying their products to MOST. good as or better than what’s available in grated audio-navigation systems for instal- That Alpine has made serious inroads into the aftermarket.

The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com September 2005, Page 5 Alpine Electronics

Second, Alpine had to walk away from tinues to be felt by car multimedia systems Alpine Sales Forecast some OEM business to maintain profit- manufacturers worldwide, as consumers by Product ability during a time when some of its cus- look for ways to conveniently play their 100 tomers, most notably Ford, were asking music in their cars. ¥ billions suppliers to significantly lower prices. Alpine says it was the first company in “There was business available that Alpine the world to provide products with iPod 10 declined to bid because it made little fi- connectivity, both in the aftermarket and 200 100 nancial sense,” he explained. In 1999 Ford to carmakers, namely BMW. Throughout 60 was Alpine’s fourth largest customer. To- 2005 the demand for iPod connectivity in day Ford accounts for just 3% of Alpine’s the U.S. aftermarket has been so great 160 190 200 OEM sales. that Alpine hasn’t been able to maintain Alpine’s decision in 2000 to be more sufficient stock. FY 2005 2010 2015 selective about what business to book was Within its Ai-NET aftermarket prod- Driver Assist an important factor in the company’s im- uct line, Alpine offers nine different head- Navigation/Communications proving profits. Net margins steadily im- unit models that are compatible with its Audio/Visual proved from 1.8% in FY 2000 to 3.6% in iPod interface adapter. The iPod interface “the future of navigation lies with con- FY 2004. In FY 2005 Alpine is expecting lets users search and select iPod listening nected systems.” Japan was the first of the net margin to increase again, to 4.8% of options from the head-unit display. Ac- world’s regions to widely use wireless com- sales. cording to Mr. Witt, iPod connectivity munications to update digital maps stored helped to make Alpine, with 45% market onboard the vehicle. In Europe, where a iPod Connectivity Is Hot share, the number-one brand in the U.S. single communications technology, GSM, Twenty-four million Apple iPods have for head units priced over $250. Along is well entrenched, the market for con- been sold since the wildly popular por- with the demand for satellite radios, the nected navigation systems will get under- table digital music players were first of- iPod interface helped enliven the mobile way in about three years. According to fered to the market in October 2001. The audio market, which had been in decline Alpine, the picture in the United States is influence of iPod’s fantastic growth con- for three years. less clear, because wireless communica- tions providers have not yet revealed their Customer Satisfaction Ratings of Navigation plans to install robust 3G or 2.5G systems OEM Navigation Systems Factory-installed Alpine navigation that cover the whole country. J.D. Power and Associates sampled more systems have received the highest cus- tomer satisfaction ratings in four of the than 9,200 U.S. consumers who purchased New Ten-Year Strategic Plan last six years since J.D. Power and Associ- or leased a new vehicle with factory-installed A new ten-year strategy called Vision ates began its annual survey of U.S. con- navigation. The rankings are based on six 2015, adopted in February 2005, directs sumers. In the latest study, consumers factors that comprise customer satisfaction Alpine to focus on becoming a “mobile liked Alpine navigation systems with with navigation systems, listed in order of the solutions company” that creates “visionary voice recognition especially for its ease of attribute’s importance to customers: ease of value.” The company will continue new use and ease of inputting the destination. use, routing, system appearance, speed of product development within its core prod- Navigation equipment is Alpine’s hot- system, information screen and voice uct lines: audio, visual, navigation and test-selling OEM product category. Alpine prompts. communications (telematics not includ- expects to sell 800,000 OEM and after- ing cellular handsets), with an added fo- Top Ten Models Rating Supplier market navigation systems in the U.S. in cus on driver assist products. the year 2006, giving it anywhere from a Acura TL 8.76 Alpine Alpine expects its new strategy to de- 35% to a 40% share of the market for Acura MDX 8.51 Alpine liver ¥300 billion ($2.7 billion) in sales by Acura TSX* 8.47 Alpine navigation devices installed in vehicles. 2010, a 6.7% annual growth rate from 8.40 Alpine Alpine is presently Honda’s principal 2005, largely due to increased sales of Lexus GX 470 8.34 Denso source of navigation equipment. Alpine is Mazda 3 8.33 Panasonic navigation and communications products, slated to supply platforms to the Jaguar S-Type* 8.27 Denso including telematics solutions. During the Chrysler 300 ’05 MY 8.26 Alpine Japanese aftermarket. InterNavi is same period, Alpine expects its served Lexus SC 430 8.22 Denso Honda’s telematics service provider. market to grow from $26.6 billion in 2005 Lexus RX 330 8.17 Denso According to Alpine, navigation sys- Study Average 7.69 to $35.7 billion by 2010, a 6.1% annual tems will increasingly rely on the infra- *Small sample growth rate. structure. A central server off the vehicle Scores based on a 10-point scale where 1 is unaccept- By 2015, the company is targeting able and 10 is outstanding. will store the map data and send it to the ¥500 billion ($4.4 billion) in sales. The Source: J.D. Power and Associates, 2004 Navigation onboard system wirelessly, as required. increase over 2010 will also come mainly Usage and Satisfaction Study “The direction is clear,” noted Mr. Witt, Page 6, September 2005 The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com The Company Profile Continued from navigation and communications Alpine’s first camera systems would help company also commenced operation of products, which will grow annually at drivers maneuver their vehicles in tight the Alpine Dalian Development Center, 14.9%, from ¥100 billion ($890 million) spaces. “Imagine parking while looking at its second most important development to ¥200 billion ($1.8 billion) during the a visual display that gives you a view of center after the one in Japan. Alpine is in five-year period. Alpine’s newest product your vehicle as if there was a camera 20 the process of expanding its production line, driver assistance systems, will grow feet above the car roof,” suggested Mr. footprint in Thailand as well. ◆ much faster: 58.5% per year, from ¥10 bil- Witt. Alpine is currently testing such a lion ($88 million) in 2010 to ¥100 billion system and has begun showing its video- Alpine’s Core Technologies by 2015. During the period between 2010 based driver-assist technology to carmak- and 2015, audio and visual product sales ers. By 2007 those systems might also be In service of its AVNC (audio, visual, navi- will stay relatively flat. offered to aftermarket customers. gation and communications) product lines, The fact that driver assistance systems Alpine creates value with these core Product Strategy: Add Driver Assis- often rely on video monitors builds nicely technologies. tance to AVNC on the upward trend of displays in new Human Machine DDLinear speaker “Alpine’s success over the years is a vehicles. “Carmakers are putting screens Interface technology (light result of staying on our ten-year product in new cars because displays are perceived Vehicle centric tactile weight, high plans,” said Mr. Witt. “In the early days by consumers as having high value,” said design efficiency) we were focused on delivering outstanding Mr. Witt. By 2010, according to Alpine Visibility and display Digital Mechatronics audio performance. Our next task was to forecasts, 22% of all new vehicles sold design Ultra-small machine build on audio by adding the visual com- worldwide will come with displays. Lighting technology design: ponent. Most recently we have been con- Over the next decade, Alpine’s driver- Voice recognition and CD/DVD/in-dash centrating on multimedia integration.” assist products will be able to process more processing changer Sensing technology HD DVD/Blu-ray DVD Each new product strategy builds on the information than what is available from Evaluation Flexible design last with new opportunities and broader video cameras. Future products, not yet Driving data System Integration core competencies. defined in detail, will capture information Global evaluation Vehicle system design: In the mid-term, Alpine will continue from a variety of sources, on and off the center Heat/space/sound/ to focus on multimedia and telematics vehicle. For instance, location or traffic EMC robustness noise solutions products or AVNC, which at Alpine information could be combined with data evaluation IDB-1394 (FireWire)/ stands for audio, visual, navigation and from video cameras, radar or laser sensors Vehicle sound MOST/CAN communications products. “Over the next to present more helpful information to the analysis evaluation Hardware/software three to five years, that’s our core prod- driver. Vehicle diagnostics Installation technology Acoustic High-density uct,” said Mr. Witt. “Our goal is to de- Digital broadcast/ packaging velop this flexible AVNC platform with Expanding Globally satellite/terrestrial EMC design both software architecture and hardware Alpine is expanding its production ca- radio tuners Computer aided that can be realized as either an OEM pability in Asia. In 2004 it completed a DSP vehicle- engineering product or an aftermarket product. The new production facility Taicang, China, customized sound Real-time signal form factors could be wildly different de- its third Chinese plant. To take advantage design processing pending on front panel design and graphi- of opportunities in China, in 2004 the High-speed ripping cal user interface. The key, though, is to have this highly integrated product avail- Alpine Products and Core Technologies able at competitive prices.” Alpine’s AVNC platform will make use of at least Category Core Device Core Technology DVD Player Mechanisms Virtual 5.1 channel surround processing technology part of the Windows Mobile platform Single & in-dash multi-disc changer Optimized human machine interface from Microsoft’s automotive business unit. Tuners As a key component of its long-term CD Player Mechanisms DSP for compressed media (e.g. MP3) Vision 2015 strategic plan, Alpine will Single & in-dash multi-disc changer Optimized human machine interface Tuners also focus on driver assistance, starting Amplifier Digital power supply High stability circuit design with systems based on inputs from video Speaker Cone Magnet design technology cameras. Alpine won’t manufacture video Magnet circuit cameras; it will develop technologies that Audio Processor DSP Audio processing technology Navigation Core CPU (joint development) Navigation database algorithm technology take video signals and make use of them Gyro (joint development) by combining Alpine’s estimable graphics, A/V (incl.monitor) PulseTouch* monitor (Alps joint development) Visual processing technology human-machine interface and system in- Shuttle monitor mechanism tegration experience with pattern recogni- *Alpine’s PulseTouch technology provides tactile feedback to touch-screen displays. Piezoelectric elements embedded in tion and other software technology. the display simulate what it feels like when you push a button. Several button styles can be simulated. The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com September 2005, Page 7 DC Bus... Continued from page 1 line communications bus based on the Yamar has also been working with ogy development projects, as Yamar be- CAN protocol. The bus will permit data DaimlerChrysler on a new concept in gins to book high-volume production or- communications between a heavy-duty support of the carmaker’s next-generation ders the company will consider potential truck and its trailer. This project is fairly safety systems. Some of that work was equity partners who could contribute not easy to justify economically, according to documented in a paper published by the only financial support, but also market Mr. Maryanka, because customers don’t SAE called “The Vehicle Power Line as a development expertise. With sales in the need any additional wires or connectors Redundant Channel for CAN Communi- hundreds of thousands of euros per year, for the standard trailer hook-up in order cation,” 2005-01-1542. Yamar is owned by Mr. Maryanka and the to integrate vehicle control systems be- Yamar’s trademarked DC-BUS got employees, who include seven engineers. tween truck and trailer. some attention at the 2004 Convergence The company wants to make its technol- In the second SPARC project, iQ meeting in Detroit, where Ford demon- ogy available to all comers, on a nonex- Power Deutschland (Munich) is making strated a rear-mounted video camera clusive basis. batteries with Yamar transceivers inside, linked to an LCD unit on the dashboard Yamar established the DC-BUS Alli- which use the power line and the LIN via the car’s DC power line and Yamar ance in 2000 to define a power-line com- protocol to communicate data about the transceivers. Multiple cameras could send munication standard, to secure suitable batteries’ state-of-charge and state-of- video data over the same power line using silicon development and to reduce the health. In this application, two indepen- its built-in multiplex network capability. cost of production and engineering. That dent batteries are connected to each other Another application of the Yamar DC- effort has been discontinued, said Mr. and to an energy management system. iQ BUS in development puts controls for an Maryanka, because “when it came to legal Power Deutschland is a wholly-owned entertainment system in a rear door, with- issues—to synchronize the agreement subsidiary of iQ Power AG (Zug, Switzer- out separate wiring or bus network. Con- among carmakers—we were unable to land), which supplies the auto industry trol of the car’s rear lights via the power deal with it. Today we work directly with with electrical energy management sys- line is also possible. almost all of the companies that were part tems, components and consulting services. Self-funded since 1994 by its technol- of that alliance.” ◆

New Features... Continued from page 3 tion sensing, StabiliTrak, Magnetic Ride The Kia Rio, an entry-level compact and side curtain airbags and a multifunc- Control (electronically controlled damp- will feature six airbags (front, front side tion display. ing), parking sensors front and rear, rain- and side curtain) standard for MY 2006. The automatic transmission version of sensing wipers, heated and cooled front Hyundai’s Accent for 2006 also features the newly redesigned Lexus IS for 2006 seat, heated steering wheel and back seat. six airbags along with occupant classifica- offers radar and The 2006 Acura RL Technology tion system. Four-wheel ABS is an option Toyota’s Pre-Collision Safety System, Package option includes Honda’s Colli- in the entry level Accent, but standard in which activates seatbelt preten- sioners sion Mitigation Braking System and E- the new Sonata and Azera sedans. Also and brake assist. Navigation, including a Pretensioners. A grille-mounted standard in the Azera are adjustable foot rear back-up camera system, is also avail- millimeter wave radar sensor detects a pedals, impact-sensing automatic door able. Vehicle Dynamics Integrated Man- possible collision and alerts the driver unlocking, electrochromic mirror and in agement, optional on the IS 350, is with audible and visual signals and adjusts all but the lowest trim level, HomeLink, Toyota’s latest-generation stability con- the seatbelt with motorized pretensioners. the integrated remote garage door opener trol, which integrates steering, braking, The system applies braking automatically made by Johnson Controls. electronic stability and traction controls if needed. The Technology Package also The all-new M35 and M45 se- for smoother operation. The Lexus IS includes adaptive cruise control. dans from Nissan come with standard comes with steering-linked adaptive head- At the 2005 Frankfurt Auto Show dual-stage front, side and side curtain lights and an auxiliary audio input jack. Honda will introduce an all-new Civic for airbags. Options include: lane-departure The Volkswagen Passat for 2006 comes Europe with standard stability control warning, which first appeared on the 2005 with electromechanical power steering (Honda’s Vehicle Stability Assist). The Infiniti FX, DVD navigation with a multi- with “active-return steering and straight 2006 Civic Hybrid, due in the U.S. in Oc- function switch and display user interface, ahead driving correction assistance.” tober 2005, will be a full hybrid, featuring adaptive headlights, adaptive cruise con- Standard safety features include eight Honda’s new i-VTEC engine and Inte- trol and rear camera imaging system for airbags, stability control, brake assist, tire grated Motor Assist. The new engine parking and backing out of driveways. pressure monitoring and foot pedals that should achieve 5% greater fuel efficiency The Toyota FJ Cruiser, a new SUV descend on serious impact. The Passat and 20% more power. The engine shuts based on a modified 4Runner platform, is also has an electronic parking brake, op- off when the car stops and also at low due at dealers early in 2006. Stability con- tional navigation, optional adaptive head- cruising speed (unlike the Toyota Prius). trol, ABS and brake assist are standard. lights and on some models, park distance Rear parking assist is optional as are side control. ◆

Page 8, September 2005 The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com