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

VOL. 20, NO. 2◆◆ PORTSMOUTH, NH USA MARCH 2007 Japan Out Front in Car-to- GM’s Global E/E Boss Weighs In Infrastructure Communications Nissan Safety Field Trial proven, field tests must be run, and Already Underway carmakers must convince themselves that consumers will pay a fair price for what- Frischkorn on Global Product Devel- “I strongly believe—and Daimler- ever new onboard equipment is needed. opment, Software and Suppliers Chrysler strongly believes—that commu- While there has been some research nications is the next logical step in and a lot of talk in Europe and the United We had an interesting conversation vehicle safety,” declared Weiland States about car-to-x communications, no recently with Hans-Georg Frischkorn, Holfelder, vice president and chief tech- significant field operational tests are who transferred from BMW in April 2006 nology officer of DaimlerChrysler re- scheduled for the near term. One of the to become GM’s executive director of glo- search, engineering and design North earliest we are aware of isn’t directly fo- bal electrical systems, controls and soft- America. “We have ABS, electronic sta- cused on intersection crash avoidance, but ware. He is responsible for the design, bility control and adaptive cruise control. on floating car traffic-data collection. A engineering and release of all electrical What is missing is that vehicles cannot €30 million German initiative called and electronics parts and software, includ- talk to each other, and they cannot talk to SIM-TD (Safe Intelligent Mobility and ing architectures for electrical functional- the infrastructure. ... It is enabling tech- Test Region/Field Deutschland), this field ity, serial data and diagnostics, but not nology that will open up so many addi- operational test (FOT) involving 500 to including powertrain controls or research. tional things ... like the Internet. It’s 2,000 vehicles will evaluate automotive Since he has been on the job for al- going to happen.” communications platforms. The testing most a year we thought it high time to ask While we agree with Dr. Holfelder could get underway in the next couple of him how electrical engineering is chang- about the ultimate promise of car-to-infra- years, but results wouldn’t be ready until ing at GM under his guidance and what structure and car-to-car communications, Turn to Communications, page 8 suppliers can do to help. the problem for those who might invest in One of the things that attracted Mr. the technology in Europe or the United E-Subscriptions Frischkorn to GM was the carmaker’s States is that real payback won’t happen newly established global engineering orga- for many years. In Japan, however, plans Now Available nization. “That is one of the major are well underway to implement a ve- In response to your requests, we are changes that GM has undertaken in prod- hicle-infrastructure safety communica- pleased to announce our completely rede- uct development. We are very focused on tions system by 2010. signed Web site and an all-new option for developing electrical and electronics sub- One of the most promising communi- subscribing to The Hansen Report. We call it systems that will be used throughout the cations applications in terms of its life- the E-Subscription. world—in North America, South saving potential is intersection collision Why an E-Subscription? America, Europe, Asia Pacific and Aus- avoidance, where cars would receive ◆ Read the current issue online, any time, tralia.” warnings that a red traffic light or a stop from any computer—no more waiting for the Mr. Frischkorn pointed out that the sign is ahead, or that another vehicle is print version to be printed and delivered. emphasis on global engineering at GM rapidly approaching the intersection ◆ Share The Hansen Report with your comes from the very top. GM chairman crossing. A serious commitment from team members or colleagues around the and CEO, Rick Wagoner, in a speech at both the public and private sectors is re- globe. Convergence 2006 highlighted a new pro- quired before intersection collision avoid- ◆ Consolidate your company’s subscrip- gram he believes exemplifies GM’s com- ance programs can begin to have an tions—lower per-reader costs. mitment to “operating our business as a impact on safety. Most importantly, gov- ◆ Search for any article or back issue truly integrated global company.” ernments have to come up with billions of published in the last ten years and print or dollars in funding to instrument thou- download for free. Global A Electronics Modules sands of intersections, and carmakers will We invite you to visit the new site at An extremely important outcome of have to install communications and driver www.hansenreport.com and click the Sub- this global orientation that will affect warning devices in each new vehicle. Be- scribe tab to learn more about E-Subscrip- Turn to Frischkorn, page 3 fore that happens, the technology must be tions. 2006 Roundup: Siemens VDO, TRW, Valeo, Visteon

Siemens VDO Automotive The company attributes 2006 sales 2007 Sales Outlook: Visteon estimates Fiscal year ending September 30, 2006 growth in part to its 2005 acquisition of net loss between $267 million and $367 2006 Sales: €10,017 million ($13,213 the steering wheel and airbag maker million on sales of $11.1 billion million) Dalphimetal, which serves European Visteon considers interiors, climate Change from 2005: up 4.2% carmakers including Peugeot, Renault, controls and electronics, including light- 2006 Profit: €669 million ($870 million) Volkswagen and Volvo. ing, its core product areas where it will or 6.7% of sales, roughly the same margin TRW’s largest business segment, Chas- focus investment. In 2006 segment sales as in 2005 sis Systems, accounted for 54% of 2006 broke down as follows: Climate, $3 bil- In late January 2007, Siemens AG an- sales; Occupant Safety Systems, 33%; lion; Electronics, $3 billion; Interiors, nounced that it was preparing to spin off Automotive Components, 13%. More $2.8 billion. Sales in Electronics and In- a minority stake in Siemens VDO Auto- than half, 57%, of TRW’s sales are in Eu- teriors declined nearly 6% compared with motive through an IPO. Some analysts rope; North America accounted for 33% the prior year. expect the offering to take place in the of sales. Ford remains Visteon’s largest cus- second half of this year. TRW’s number one OEM customer in tomer, accounting for 45% of product Siemens VDO reorganized its business 2006 was Volkswagen Group, which ac- sales in 2006, down significantly from divisions in October 2006 into these four: counted for 15.5% of sales. Sales to Ford 62% in 2005. Powertrain, Interior Electronics and Motor Co., the largest customer in 2005, Visteon reduced its R&D expenditure Infotainment, Safety and Chassis, and contributed 14.6% of total TRW sales. from $804 million, or 4.7% of sales, in Commercial Vehicles. In fiscal 2006, 2005 to $594 million, or 5.2% of sales, in Siemens VDO’s ten largest customers ac- Valeo 2006. As part of the company’s ongoing counted for 80% of sales. Nearly two- 2006 Net Sales: €9,970 million ($13,151 restructuring, eleven plants were fixed, thirds of sales were from Europe, with million) closed or sold in 2006; seven more are one-third in Germany alone. The remain- Change from 2005: up 2.2% scheduled for sale or closure in 2007. ing third of sales was primarily generated 2006 Net Profit: €161 million or 1.6% of Visteon eliminated 800 salaried positions in the United States. sales, compared with net profit of €142 in the fourth quarter. According to the Siemens VDO is marketing a family of million or 1.5% of sales in 2005 company, 80% of its $1 billion of new active safety products—LIDAR-based Valeo’s largest product lines, climate business wins will be manufactured in low adaptive cruise control, night vision, control and engine cooling, together ac- labor cost countries. Pardus Capital Man- blind spot detection and lane departure counted for 31% of sales. agement, which owns 10.2% of Valeo, re- warning—under the name pro.pilot. In In December 2006 Valeo sold its Elec- cently increased its stake in Visteon to September 2006 the company introduced tric Motors and Actuators business to 17.4%. ◆ a drowsy driver monitoring system that Nidec, a Japanese motor manufacturer, uses an infrared camera to monitor the for €142 million. Valeo increased its in- THE HANSEN REPORT ON driver’s face, which in the future could be vestment in the Japanese lighting sup- AUTOMOTIVE ELECTRONICS integrated with other pro.pilot features. plier Ichikoh to 29.4%, and increased its The company announced in December investment in blind-spot-detection maker © 2007 Paul Hansen Associates, 150 Pine- 2006 that it is acquiring Ballard Power Valeo Raytheon Systems to 77.2%. hurst Rd., Portsmouth, NH 03801, USA. Tele- phone: 603-431-5859. Fax: 603-431-5791. Systems’ electric drive business for Subject to reaching agreement with Email: [email protected]. All rights re- $4 million. the United Auto Workers, Valeo will ac- served. Materials may not be reproduced in quire Ford’s Thermal Systems plant in any form without written permission. The TRW Automotive Plymouth, Michigan. With 2006 sales of Hansen Report on Automotive Electronics is € 2006 Sales: $13,144 million approximately 350 million ($462 mil- published 10 times a year, monthly; July/Au- Change from 2005: up 4% lion), the facility employs 1,250 people. gust and December/January are combined 2006 Net Profit: $176 million, or 1.3% At the end of 2006, Valeo had 129 issues. The annual single-user print subscrip- of sales, down from $204 million in net production facilities, with 54% of its pro- tion rate is $747 (North America), $787 (else- earnings or 1.6% of sales in 2005 duction workers located in low labor cost where). Back issues are available for $50 Outlook for 2007: Net sales are expected countries. each. Index and multi-user electronic subscrip- to increase slightly, to between $13.4 bil- tion information is available at our Web site lion and $13.8 billion. TRW expects to Visteon Corp. www.hansenreport.com. Paul Hansen Associ- benefit from increased sales of U.S.-man- 2006 Net Sales: $11,418 million ates is a strategy and market research firm dated safety products including direct tire Change from 2005: down 32.7% consulting to the electronics industry. pressure sensing, occupant sensing and 2006 Net Loss: $163 million, compared Publisher/Editor Paul Hansen the phase-in of electronic stability con- with a loss of $270 million in 2005. Managing Editor/ Brianne Wolfe trol systems proposed by NHTSA. Visteon has never shown an annual Circulation Manager profit. ISSN 1040-1105 Page 2, March 2007 The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com Frischkorn... Continued from page 1 automotive electronics is GM’s Global A software architecture standard being pro- telematics, we want to do that ourselves program, which will encompass every moted by BMW and others. Rather, over time,” summarized Mr. Frischkorn. electronics module in the car, including “AUTOSAR will be GM’s next step in chassis control. In his Convergence the evolution of architectures,” said Mr. System Integration of Complex Func- speech Rick Wagoner explained: “The Frischkorn. Unlike AUTOSAR, the Glo- tionality idea behind Global A is to create a small bal A architecture doesn’t use standard A third major trend underway at GM, number of highly integrated, high-vol- middleware. As such, the middleware according to Mr. Frischkorn, is a commit- ume, common electronic modules and from each Global A module supplier will ment to taking systems engineering to the devices, designed to cover the full band- probably be different. Global A architec- next level. “We are strengthening our sys- width of GM vehicles across the globe. ture further differs from AUTOSAR in tems engineering approach to subsystem The advantages to us are huge: massive that it is not the same across all domains. integration, advanced validation tech- economies of scale, reduced cost, im- For example, the Global A body-control nologies and architectures. As part of this, proved warranty performance, smoother module architecture is not the same as the we are very strongly endorsing CMMI,” launches and better use of engineering Global A architecture of the radios and he said. resources. And for our suppliers—signifi- airbag controllers. GM’s objective is to be at CMMI cantly larger orders.” (Capability Maturity Model Integration) “The first GM vehicles with Global A GM-Made Software level 3, though the particular level is only modules will be on the road within two While Global A should have a signifi- part of the story. More important, accord- years,” noted Mr. Frischkorn. “Each engi- cant impact on unit volumes and prices of ing to Mr. Frischkorn, is “really making neering center will use the same body GM’s electronics modules, GM’s policy to sure that everybody involved works controllers, the same radios, the same develop the application software and HMI through that process and is involved in a navigation devices and the same airbag software that will run in those modules structured continuous improvement pro- control module across multiple car lines.” will have a greater effect on GM’s suppli- cess. While that does involve some tools GM will use just three Global A radios: ers because GM will be turning in-house and education, such a cultural change is a simple radio, a mid-level system with a for what it used to buy on the outside. best accomplished by working through small display and CD player, and a fully- “That means we will now be sourcing only pilot projects—showing the benefits of equipped head unit with speech recogni- hardware, which means we can open up these and then engaging more and more tion and full 3D map. Depending on the competition to all regions of the world people in the organization.” For more on region where it will be used, each module and not just rely on those suppliers ca- CMMI please visit www.sei.cmu.edu/ will have slight variations in HMI (hu- pable of doing the whole system including cmmi. man machine interface) and other fea- all functionality and testing,” explained tures. For example, European radios make Mr. Frischkorn. How Suppliers Can Help greater use of TMC (traffic message chan- At present, somewhere between 100 If there is one thing that suppliers can nel) features than do other regions. and 200 software engineers are in Mr. do to increase the likelihood of doing There will also be just three body con- Frischkorn’s organization, but that num- business with GM, it’s strengthening their trol modules in the Global A program. ber will double in the next two years. process capabilities. Mr. Frischkorn elabo- Airbag-controller modules are also highly GM’s North American and European soft- rated: “The better the suppliers are at de- commonized. According to Mr. ware operations will see some growth but livering high value functionality on time, Frischkorn, “The only difference from the most dramatic increase will come at on cost and with quality, the more they airbag to airbag is the number of [airbag] GM facilities in India. Additional soft- help us. At the end of the day, that capa- loops and whether you have an integrated ware engineers are employed within GM’s bility is the only thing that counts.” rollover sensor.” Powertrain organization. Another way to win at GM is with new While Global A doesn’t encompass While GM is investing heavily in soft- and innovative infotainment technology. the powertrain controller itself, it does ware development, the carmaker will not “We are very interested in intelligent comprehend the powertrain electrical in- be writing all of its software. One area plug-and-play integration of portable de- terface, which is a set of protocols jointly where it will continue to rely on suppliers vices. [We are also interested] in Wi-Fi owned by GM’s Powertrain and Electrical is airbag software. GM is also disinclined communications and in new HMI con- Systems engineering organizations, that toward writing its own middleware unless cepts,” declared Mr. Frischkorn. allow engine and transmission systems to what is available commercially is insuffi- “While GM is very much cost-driven communicate with other vehicle systems. cient. “Any software that’s core to the way these days, given our financial situation, Because it will take more than three the customer experiences the car, like increasingly we are very interested also in years to roll out Global A modules across HMI, or software that’s innovative in ac- co-development partnerships with inno- GM’s vehicle lines, the carmaker will not tive safety, like sensor fusion, or vative suppliers,” noted Mr. Frischkorn. be an early adopter of AUTOSAR, the “We’ve got contracts for that.” ◆

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

Thumbnail Sketch Garmin Sales and Net Margin Garmin Sales by Region st Headquarters: 1200 E. 151 Street, Olathe, 2001 to 2006 CAGR: 36.8% 2006 Total: $1,774 million KS 66062; phone: 913-397-8200; fax: 913- 2.5 Asia, 5% 397-8282; www.Garmin.com Sales in $ billions Principal Automotive/Mobile Product: Europe, 1.77 North Personal navigation devices, about 20 33% different models America, 1.03 62% 2005* Sales: $1,028 million 0.76 2006** Sales: $1,774 million 0.47 0.57 2007 Sales (est.): $2,500 million 0.37 2005 Net Margin: 30.3% Garmin Employees by Region 2006 Net Margin: 29.0% 2001 2002 2003 2004 2005 2006 2007* Total at year end 2006: 4,751 2007 Net Margin (est.): 27% Net Margin 2006 Net Cash from Operating Activities: Europe, 3% 2001 31% 2005 30% Canada, 1% $362 million 2002 31% 2006 29% 2006 R&D: 6.4% of sales 2003 31% 2007* 27% United Working Capital: $831 million, at year end 2004 27% States, 2006 36% Total Debt: $248,000 *Company estimates Taiwan, 59% Stockholders Equity: $1,558 million at year end 2006 Garmin Sales by Segment Garmin Automotive/Mobile Sales and Market Capitalization: $11.1 billion as of 2006 Total: $1,774 million March 6, 2007 Before Tax Margin by Year Automotive/Mobile, Employees: 4,751 at year end 2006 Aviation, 13% 62% Sales in $ millions 2006 Sales per Employee: $373,395 1,089 Marine, 9% Major Stockholders: As of July 21, 2006, nüvi, 28% Min H. Kao, director, chairman, CEO and cofounder owned 21.6% of common shares; Outdoor/ 403 Fitness, 16% Gary L. Burrell, cofounder, owned 14.2%. StreetPilot, 28% 203 *53 weeks ending December 31, 2005 Other, 6% **52 weeks ending December 30, 2006 2004 2005 2006 Background through ground reference stations and Before Tax Margin When Gary Burrell and Min Kao additional satellites. 2004 27.5% founded Garmin in 1989, the U.S. De- Garmin’s navigation devices are widely 2005 31.1% partment of Defense was intentionally used in aviation, marine, automotive and 2006 29.6% degrading the accuracy of GPS (Global recreational applications. Garmin shipped Positioning System) satellite signals for a total of 5.4 million navigation units in Garmin expects declining operating civilian commercial purposes to a radius of 2006, up 80% over the prior year. Cumu- margins in 2007 due to product mix and a about 100 meters, a practice known as latively since its founding, Garmin has continued transition to mass-market levels. Selective Availability. Nevertheless, it shipped more than 19 million navigation was the Garmin founders’ vision that GPS devices. In all its business segments Garmin’s revenue and earnings per would eventually “change the face of Garmin introduced more than 70 new share grew during 2006, by 73% and 64% navigation” and they began designing products in 2006, following 40 new prod- respectively. The Automotive/Mobile GPS equipment in 1990. Selective Avail- ucts in 2005. segment’s fourth quarter sales were up ability was permanently discontinued in In contrast with most automotive sup- 173% over the fourth quarter in 2005. 2000, and today Garmin GPS receivers pliers, who have had trouble making prof- Garmin expects Automotive/Mobile sales achieve an average accuracy of approxi- its lately, Garmin’s balance sheet is very to grow by 50% in 2007. mately 10 meters. Some of the newer re- strong. At year-end 2006, current assets In 2006, Forbes magazine named ceivers that include Wide Area exceeded current liabilities by $831 mil- Garmin “America’s best managed com- Augmentation System (WAAS) technol- lion, and long-term debt was miniscule, pany in the field of technology hardware.” ogy are accurate to within three meters. just $248,000. In 2006 Garmin hired 250 engineers and WAAS improves the accuracy of GPS plans to hire an additional 250 engineers Page 4, March 2007 The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com The Company Profile Continued

Garmin Stock 5-Year History Garmin R&D Expenditures by Year Distinctions Claimed by Garmin dollars ◆ Number-one market share of personal 2002 to 2006 CAGR: 37.0% navigation devices in the U.S. 113.3 120 ◆ Number-two market share of personal 100 navigation devices in Europe 74.9 ◆ 80 Has an exclusive deal with seven of the

$ millions 61.6 eight major car rental companies in the 60 43.7 U.S. 02 A J O 03 A J 04 A J O 05 A J O 06 A J O 07 32.2 Source: BigCharts.com 40 ◆ Sixteen consecutive years of business Garmin is traded on the NASDAQ under the 20 growth symbol GRMN. Garmin Ltd. went public in De- 2002 2003 2004 2005 2006 ◆ The leader in GPS innovation: offers more cember 2000. Stockholders benefited from a products than any other automotive two-for-one stock split effective August 15, Garmin’s Principal Competitors with navigation manufacturer 2006. Over the last five years, the rate of return Portable Automotive Products ◆ Created the world’s first portable GPS with of Garmin stock was 501.9%, including price moving maps, August 1993 appreciation and cash dividends reinvested. A Alpine Electronics Navman ◆ Created the world’s first PDA with GPS dividend of $0.50 was paid to shareholders on Audiovox Pharos technology, 2002 December 15, 2006. Clarion Pioneer ◆ Created the world’s smallest GPS unit for Forty-one percent of outstanding shares Cobra TomTom outdoor enthusiasts, 2006. are owned by present or former board mem- Magellan Navigation Sony bers, executive employees and/or their families; Mio Technology 35% of stock is owned by the company’s two Embedded vs. Portable founders. Navigation Devices in 2007. None of Garmin’s employees are Much of the appeal of Garmin prod- they are portable, each household only represented by a labor union or covered ucts is their portability—buyers can use needs one. As a result, sales of portable by a collective bargaining agreement. them in more than one vehicle. Demand navigation devices have surpassed those of Garmin’s design and manufacturing for portable navigation devices is defi- embedded devices and will continue to processes are certified to ISO 9001:2000 nitely outpacing the demand for embed- grow at a faster pace well into the future. quality standards. Additionally, Garmin’s ded navigation systems. That trend Competition among PND suppliers is manufacturing facility in Taiwan has toward portability, says Ted Gartner, driving PND prices even lower, which will achieved TS 16949:2002 automotive sup- Garmin’s media relations manager, com- further deflate the price of embedded plier quality certification. pares with car phones: “How many car navigation systems. It’s hard to say exactly what Garmin’s phones do you see these days?” According to the U.K.-based IMS Re- nationality is. The company was founded A big advantage portable navigation search Automotive Group worldwide sales in Kansas and world headquarters, R&D, device makers have over their embedded of PNDs will grow from 11.3 million units and a large manufacturing facility are lo- navigation device rivals is speed to mar- in 2006 to 30.1 million units in 2010. In cated in Olathe, Kansas. The company’s ket. Mr. Gartner remarked, “A car gets that same period, cell phone navigation two founders, Gary Burrell and Min H. developed over the course of several years, systems, a business also served by Garmin, Kao are both U.S. citizens. whereas our PNDs take only a year to 18 will grow at an even faster pace, from 7.3 According to the company’s SEC fil- months from concept to marketplace. By million units in 2006 to about 43.8 mil- ings, “Garmin Ltd. [the parent] was incor- the time an in-dash system hits the show- lion units by 2010. (For more from IMS, porated in the Cayman Islands [a tax room floor it’s out of date and no longer please visit www.imsresearch.com.) haven] on July 24, 2000 as a holding com- cutting-edge compared to the Garmin pany for Garmin Corporation, a Taiwan PND they could get at the dealer.” Garmin Aims to Serve Global Markets corporation [and subsidiary of Garmin While Garmin doesn’t usually compete Already the most successful navigation Ltd.].” Garmin Ltd. went public in De- directly with leading makers of embedded equipment supplier in the United States cember 2000. A substantial portion of navigation equipment such as Denso, with 50% market share, Garmin has been Garmin’s assets are located in Taiwan, Aisin Seiki, Alpine, Harman, Hitachi and making strides elsewhere in the world. It where more than half the employees re- Pioneer, its portable navigation products is currently the number-two supplier of side. Garmin chairman and CEO, Dr. are taking a huge bite out of the embed- personal navigation devices in Europe, Kao, who has M.S. and Ph.D. degrees in ded market. Good portable navigation where its sales rose 88% in 2006 to $585 electrical engineering from the University devices, like those made by Garmin, get million, or 33% of total sales. of Tennessee, also has a degree in electri- you where you want to go as well as the Garmin has been investing heavily in cal engineering from National Taiwan best embedded units, and they cost as building up its brand and distribution University. little as one-third the price. And because channels in Europe. For example it

The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com March 2007, Page 5 Garmin Ltd. recently acquired its French distributor, Garmin and Carmakers, Three Ways to Relate EME Tec Sat, which has 50 employees. “We’ve been doing a lot of marketing to Dealer Accessory make sure that the Garmin brand is first A portable navigation device is packaged with the price of a new car or sold later when and foremost in Europe, just like it is in the customer returns to the dealer for service. This approach is taken by Ford dealers in North America,” noted Ted Gartner. Europe and Hyundai dealers in North America. Garmin’s consumer products are dis- Dealer Installed tributed in the United States by four of A Garmin industrial design team helps to integrate PNDs into the vehicle. For example, a the country’s largest retailers: Best Buy, suction-cup or bean-bag mounting can be replaced with a built-in docking system that Circuit City, Target and Wal-Mart. Euro- preserves device portability. Or, as was done for Chrysler’s Mopar parts operation, a custom pean distribution is handled through in- mount for the PND was placed in an unused niche in the dash, atop the center stack of the country distributors who resell to dealers. Dodge Nitro. The installation can accommodate connections to power and to the vehicle’s Additionally, Garmin has made key speakers. Garmin has dealer installed programs going also with Southeast Toyota and with partnerships with distribution centers in Honda Access in Europe. Brazil, Chile, Mexico, Eastern Europe, Factory Installed Russia, China, Japan and Singapore. “We In January 2006 Garmin announced the availability of its black-box, customer-configurable, definitely have our eyes on the Asian mar- hideaway navigation system, the GVN 52. Designed for integration with existing mobile audio- ket, especially China. Dr. Kao has close video entertainment systems, the GVN 52 features Garmin’s easy-to-use StreetPilot user ties to Asia and he understands that mar- interface. The built in turn-by-turn, text-to-speech, voice-prompted directions can be amplified ket as well as or better than anybody,” through audio system speakers. Composite video or RGB video output can be fed to an noted Mr. Gartner. Garmin’s Asian sales existing display. The unit can be controlled by touch screen and/or through a wireless remote. were up 74% in 2006. It is also compatible with dead-reckoning gear and traffic information via XM Traffic. According to Garmin, the GVN 52 comprises the core of every navigation unit sold Why Garmin? worldwide by Kenwood, the Japanese aftermarket navigation and audio system supplier. Garmin has negotiated exclusive deals A version of the GVN product is factory-installed on Honda Gold Wing motorcycles, where with seven of the top eight car rental it is integrated with the CB and audio systems and where map updates are done by way of a companies in the United States. The Compact Flash card. The GVN 52, which comes preloaded with maps of United States, eighth major player, Hertz, has been with Canada and Puerto Rico or Western Europe, but doesn’t include the display, bears a Magellan since Hertz first began offering manufacturer’s suggested retail price of $599. its NeverLost system in 1999. According to Clint Steiner, senior sales manager for ence with products like MSN Direct and connectivity with scores of compatible OEM automotive accounts, the main rea- traffic detection receivers and apply those Bluetooth phones. “The number of son Garmin has been so successful with to the embedded market.” Garmin’s ap- Garmin units with Bluetooth is expanding rental car companies is the ease of use of proach to navigation is finding traction because of public demand,” noted Mr. its products. “A person renting a car does among carmakers and dealers. By 2005 Steiner. “Last year we had just one or two not have time to look at an owner’s Garmin had won only three OEM pro- Bluetooth units.” The Garmin PNDs with manual. Our units are very simple. We grams; today it has 15 OEM programs. Bluetooth features include three nüvi give you just two options on the main Garmin feels it is well qualified to help models, two StreetPilot models and two screen: “Where to?” and “View map.” with the integration of its products into zumo (motorcycle) models. Garmin has used the same user interface vehicles given more than a decade of ex- With a Bluetooth-equipped PND and on most of its products since 2005, when perience with integrating its navigation Bluetooth-compatible phone, users can it was introduced on the c330, Garmin’s equipment into the cockpits of airplanes. immediately access the phone numbers of first 3.5-inch StreetPilot device. “We like Carmakers and dealers interested in the six million points of interest stored in to say, ‘If you can use an ATM you can use learning more about Garmin’s products the PND’s memory and automatically dial a Garmin device,’” noted Mr. Steiner. can contact [email protected]. that number with the push of a button on the display. OE Sales Hottest New Features: And of course with Bluetooth the PND Mr. Steiner told us how a working rela- Bluetooth and Traffic accommodates hands-free calling; the tionship with Garmin can begin. “We Among all the new features recently navigation unit is equipped with a micro- work with our engineering and industrial brought to market by Garmin, Bluetooth phone and speakers. “Your display screen design team and develop three or four is hottest, along with traffic receivers. In now displays caller ID so you can simply concepts for vehicles that an OEM can 2006 Garmin added Bluetooth capability hit ‘answer’ or ‘ignore,’” explained Mr. consider. Since engineering cycles for to several of its personal navigation de- Steiner. “It also supports SMS (short PNDs are a little faster than in the em- vices, and now seven of Garmin’s 20 message service) text messaging.” The bedded space, we can leverage our experi- PNDs are enabled for Bluetooth wireless Bluetooth PND also downloads the phone

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

Major Facilities Garmin’s Deals with Carmakers and Car Rental Companies

Olathe, Kansas, USA 750,000 sq. ft. BMW and MINI dealers in the U.K. Multiple products Shijr, Taiwan 249,326 sq. ft. Chrysler, Dodge and Jeep, N.A. dealer-installed option Navus, based on StreetPilot 2600 Jhongli, Taiwan 223,469 sq. ft. Ford dealers in Europe Multiple StreetPilot and nüvi units Totten, U.K. (April 2007) 155,000 sq. ft. Ford, Lincoln and Mercury dealers in U.S. nüvi 680 w/ MSN Direct, nüvi 360 Harley Davidson, certain models Roadtech Quest and Conquest Honda Gold Wing motorcycle Garmin is tier-one supplier book from your cell phone for easier dial- Honda in Europe, dealer option on several models Customized mount for nüvi 360 ing. Garmin hands-free calling is compat- Hyundai dealers in N.A. nüvi 360 ible with more than 280 phone models. Jeep Wrangler, dealer-installed option Trail Guide Products that feature traffic informa- Saab dealers in Europe nüvi 300 tion are also very hot at Garmin. Today Toyota FJ Cruiser, dealer-installed option Quest (customized) Garmin offers three different traffic infor- Southeast Toyota, port-installed option Customized mount for nüvi mation products: FM TMC Traffic, XM smart fortwo and forfour, port-installed option Version of StreetPilot c500 NavTraffic and Traffic.com. When paired with the compatible Garmin navigation Exclusive Deals with Car Rental Companies device the system provides the user with Avis and Budget Car Rental provide Where2 navigators (based on StreetPilot c550) at 125 advance notice about traffic delays and locations throughout the United States and Canada. offers an alternative route. Dollar Thrifty Automotive Group offers a customized version of the StreetPilot c330 at 139 FM TMC Traffic requires an FM an- Dollar and Thrifty locations. tenna and receiver, built into the PND or Enterprise Rent-A-Car offers a customized version of Garmin’s StreetPilot c340 at the integrated into the cigarette lighter company’s 100 top airport rental locations. adapter. Dealer-installed or OEM versions National Car Rental and Alamo Rent A Car offer StreetPilot c330 at more than 150 dealers in can take advantage of the car’s antenna. the United States and Canada. The traffic data, available for more than 50 markets, is aggregated by Clear Chan- Automotive/Mobile Products nel Communications and transmitted over FM RDS (radio data system) radio. StreetPilot (15 models) Quest (2 models) Garmin traffic receiver/antennas retail for The StreetPilot i-Series are Garmin’s smallest This pocket-size portable GPS unit is $214 or $160, depending on the model, and least expensive PNDs. The c-Series capable of automatic turn-by-turn routing and and include a 15-month subscription to features a touch-screen interface and turn- doubles as a rugged outdoor handheld Clear Channel TMC for customers in by-turn directions. The StreetPilot 2720 and navigation device. North America. The large majority of 2820 are full-featured navigators in a traffic service users, however, purchase a different form factor. The StreetPilot 7000- GVN-52 is Garmin’s private-label embedded unit that has the traffic receiver bundled Series are high-end automotive and RV units navigation solution in a box. with the unit, like Garmin’s nüvi 660/680 that display navigation, entertainment, traffic or StreetPilot 550/680. In the U.K. and and weather information on a large, 7-inch iQue (2 models) France, TMC traffic subscriptions are free. touch screen. This Palm OS-based PDA product line uses Available in 44 markets with addi- Garmin’s Que technology to connect the tional coverage coming quickly, XM nüvi (8 models, 3 more coming April 2007) Palm Address Book and Date Book to the NavTraffic information is aggregated by Launched in 2005, the nüvi is a portable GPS electronic map so users can navigate Garmin’s map-data supplier, NAVTEQ. navigation device designed for travelers. It directly to a specific address from their NAVTEQ gets its traffic data from many combines into one device a full-featured GPS contact database or date book. of the same sources as Clear Channel. XM navigator with a language translator, MP3 NavTraffic costs $9.95 per month, plus player, audio book player, currency and Garmin Mobile (3 models) the cost of a separate XM data receiver measurement converter, world clock and Garmin Mobile is a subscription-based and antenna. digital photo organizer. software application that lets Bluetooth- The third traffic service, Traffic.com, is enabled smartphones, laptops, Pocket PCs available free with Garmin’s Mobile 20 zumo (3 models) or PDAs function as GPS navigators. Smart Navigation application that runs Designed for use on motorcycles, zumo on smartphones and is accessed via the features a glare-resistant and glove-friendly GPS 18 (2 models) cell phone connection to Garmin Online. touch screen. GPS 18 turns a PC laptop into a GPS Traffic.com was recently acquired by navigator. NAVTEQ. ◆ The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com March 2007, Page 7 Communications... Continued from page 1 2010 or 2011, when the decision would be of those vehicles received information designed to receive data from broadcast made about further investment. that oncoming vehicles were approaching. FM, IR beacons and 2.4 GHz beacon The U.S. Department of Transporta- As a result, 60% of the vehicles that re- transmissions. tion is hoping to begin a 50-vehicle, 24- ceived the alert drove 15 kilometers per Building up the infrastructure for inter- intersection FOT, part of its Cooperative hour more slowly than vehicles that section crash avoidance will be the re- Intersection Collision Avoidance Systems weren’t alerted. “I am very happy because sponsibility of the Japanese government, initiative, as early as the summer of 2008. our test depends on ordinary drivers who which would place IR beacons 100 to 200 A final joint decision by carmakers and react to the information by driving more meters in advance of each intersection. the USDOT on whether or not to proceed safely,” said Mr. Fukushima. The government could equip each of the with the test won’t be made until May 4,000 so-called “dangerous intersec- 2008. The FOT would take about two Japan Will Use Existing IR tions”—those with at least six deaths or years. Infrastructure injuries from accidents each year— Even though the Japanese government throughout Japan, plus a few thousand less Nissan’s Vehicle-Infrastructure has set aside the 5.8 GHz DSRC (Dedi- dangerous intersections. Safety System FOT cated Short Range Communications) RF While the benefit of avoiding colli- In October 2006, Nissan launched a spectrum for electronic toll collection and sions at intersections would nearly pay for major field operational test of intersection for next-generation road services, Nissan’s the investment in new infrastructure, collision avoidance in Kanagawa, field test, as well as vehicle-to-infrastruc- Nissan sees added value in equipping Yokohama, Japan. The Kanagawa test al- ture field tests to be conducted by Toyota more vehicles for car-to-infrastructure ready has 1,000 vehicles participating and and Honda, will make use of infrared bea- communications: each of those vehicles eventually will involve 2,000 vehicles, cons. The same IR beacon technology has can be used as traffic probes to collect each equipped with a Nissan Carwings been in use in Japan since the VICS ser- real-time data. With traffic probe data, telematics platform. Carwings systems in- vice was first deployed in 1996. It is quite Nissan could provide its Carwings cus- clude navigation and voice assistance likely that IR beacons will ultimately be tomers with more accurate route guid- functions, and a VICS antenna/receiver used when an intersection collision avoid- ance. As part of its Kanagawa field capable of receiving infrared communica- ance system is deployed in Japan in 2010. operational test Nissan has also equipped tions from roadside beacons. In Japan, “There remains only a short time, so we 8,000 vehicles as traffic data collection VICS (Vehicle Information and Commu- must use infrared. It is really not so bad,” probes. When the test is fully underway, nications System) broadcasts real-time said Mr. Fukushima. 10,000 vehicles will participate. traffic information for major roadways to In order to receive the intersection Nissan’s Kanagawa intersection colli- cars equipped with VICS-compatible safety communications, drivers would sion avoidance project is also testing sys- navigation systems. The Nissan test is only need the VICS three-media antenna/ tems that alert the driver if his speed is scheduled to be completed by March receiver, assuming they already have a too high for approaching a red traffic 2008. Honda and Toyota are planning telematics terminal like Carwings. Today light, a stop sign or a primary school zone. similar tests. the three-media antenna retails for about Toyota and Honda are testing similar ap- A major function of the intersection $200 but could cost less when unit sales plications; Toyota’s traffic signal and stop crash avoidance system is alerting drivers rise significantly higher. Presently about sign test involving 100 vehicles got under- approaching an intersection that an un- 7% to 10% of drivers opt for the VICS way in December 2006. Honda’s will start seen vehicle is also approaching at cross three-media antenna/receiver, which is in July 2007. ◆ paths and at a high speed. When a sensor at the intersection detects the oncoming vehicle, that information is transmitted Garmin Leads U.S. Portable Navigation Market via IR beacon to other vehicles approach- U.S. Portable Navigation Hardware Vendor Market Shares 2005 and 2006 ing the intersection. Onboard IR receivers pick up the transmission and alert the Vendor 2006 2005 Growth driver with a voice message such as “car Shipments Share Shipments Share 2006/2005 approaching from left.” An image depict- Garmin 1,443,150 50.3% 389,910 50.2% 270.1% ing an approaching vehicle simulta- Magellan 415,160 14.5% 181,460 23.3% 128.8% neously appears on the Carwings TomTom 396,530 13.8% 100,590 12.9% 294.2% navigation screen. Mio Technology 119,690 4.2% 610 0.1% 19,521.3% Based on some early results, the test is Lowrance 66,420 2.3% 32,720 4.2% 103.0% going very well, explained Masao Others 426,870 14.9% 71,990 9.3% 493.0% Fukushima, a top engineer at Nissan. In the first two and a half months, 250 in- Total 2,867,820 100.0% 777,280 100.0% 269.0% strumented vehicles were logged going through the intersection. Twenty percent Source: Canalys

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