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

VOL. 15, NO. 5◆◆ RYE, NH USA JUNE 2002 Auto Electronics FlexRay Protocol Picks Pioneer Dennis Wilkie Speaks Out Up Support The battle over which safety-critical, but we have been unable to confirm that Dennis Wilkie has seen automotive by-wire communications protocol gets Volkswagen, and have electronics from both the carmaker side picked by the auto industry is heating up. chosen TTA. Engineers at Renault are and the supplier side. After completing a As the FlexRay consortium spreads the divided—there are advocates there for Ph.D. in control theory he spent 28 years news that its membership is growing— each of the communications protocols. at Ford, where he worked on some of the Ford and Texas Instruments announced While Toyota is listed as a core TTA earliest developments of electronically- they soon officially join—the com- member, Ichiro Hosotani, an engineer at tuned radios, cruise and engine controls. peting TTA consortium counters that Toyota’s control software development He held key positions in Ford’s Electrical TTA is still very much a contender. center, told us that Toyota won’t decide and Electronics division, including assis- FlexRay was founded by BMW, Mercedes, on a particular protocol until the third tant chief engineer, reporting to Jerry Motorola and Philips in the fall of 2000 quarter of 2003. In April 2002, Toyota Rivard, another industry pioneer. Mr. after Mercedes and BMW stopped work- and Volkswagen attended the FlexRay Wilkie served as general manager of Ford’s ing with the TTA (Time Triggered Archi- consortium meeting in Munich, Germany. Glass division and later as director of elec- tecture) consortium and its leading Along with VW, Renault and Toyota, the tric vehicle programs. In 1996 he joined proponent TTTech Computertechnik TTA consortium also lists Delphi, automotive electronics supplier Motorola, AG, of Vienna, Austria. TTTech owns TTTech, Honeywell and Airbus as core where he held a number of management rights to the TTTech by-wire link. members. positions in the Automotive and Indus- While the final decision hasn’t yet FlexRay carmakers Ford, GM, BMW trial Electronics Group and was on the been made, The Hansen Report has re- and DaimlerChrysler account for about staff of the president of Motorola’s Inte- cently learned that PSA Peugeot Citroën 21% of the world’s light vehicle produc- grated Electronics Systems Sector. He re- could join FlexRay. PSA is still studying tion. It now seems inevitable that other tired from Motorola in March 2002, and both FlexRay and TTA by-wire communi- carmakers will jump on the FlexRay band- in May was named senior vice president of cations approaches, and while research wagon, making FlexRay the de facto com- Compass Group, a management consult- people are working on a prototype by-wire munications standard for high-speed ing and executive search firm based in system, development engineers are work- safety-critical automotive applications. In Birmingham, Michigan, and Oak Brook, ing on a FlexRay prototype. The develop- July of 2001, Bosch decided to become a Illinois. Mr. Wilkie serves as chairman of ment engineers now favor FlexRay, and core member of FlexRay, and in April the board of the Convergence Transporta- one engineering manager close to the 2002, Ford and Texas Instruments an- tion Electronics Association, which orga- project told us that PSA is almost certain nounced their intention to sign on as as- nizes the biennial International Congress to opt for FlexRay. Other carmakers will sociate members. on Transportation Electronics, meeting do likewise, he said. PSA has signed non- next on October 20, 2002, in Detroit. disclosure agreements with both the FlexRay Membership We interviewed Mr. Wilkie in May, FlexRay and TTA groups so it maintains Core Members and he discussed some of his ideas for two separate groups, one to handle BMW bringing automotive electronics closer to FlexRay and another to handle TTA. Bosch its potential for making vehicles safer, The TTA consortium continues to DaimlerChrysler more reliable, more fully featured, and less claim publicly that PSA is a consortium General Motors costly. member, despite PSA’s requests that it not Motorola do so, and despite the news that PSA is Philips Problems Between Carmakers leaning strongly toward FlexRay. TTA Premium Associate Member and Suppliers also claims that Audi, Volkswagen, Ford (will join soon) With Compass Group, Mr. Wilkie in- Toyota and Renault have joined with Associate Member tends to work with carmakers and suppli- TTA. Walter Streit, responsible for Audi’s Texas Instruments (will join soon) ers to help them improve systems electrical systems integration, confirmed Turn to Wilkie, page 2 that Audi is definitely advocating TTA, Turn to FlexRay, page 8 Wilkie... Continued from page 1 engineering and help them work together tronics guys are trying to rip them off and systems engineering,” said Mr. Wilkie, more productively. He believes the two maintain egregious margins. ... It’s hard to “but even these two carmakers could ben- sides can do a better job harmonizing overcome the mindset of some carmakers efit from a greater application of it.” their efforts. “Today,” said Mr. Wilkie, who believe electronics suppliers should “the two sides behave as if there is an im- not have higher margins than the Network Computing pedance mismatch between them.” Im- carmakers. That’s not right.” Mr. Wilkie Mr. Wilkie sees huge potential for what pedance is opposition to the flow of believes that to stay competitive, elec- he calls the networked car. “I would love alternating current. When there is a mis- tronics companies need to maintain a to see the vehicle electronic architecture match, energy is wasted. Likewise in the higher level of investment in R&D than behave much like the Internet behaves— automotive electronics market, “It’s diffi- do carmakers. “Lately, it’s as hard as it’s where mechanical, electrical, electronics cult for each side to overcome the imped- ever been for suppliers to make money in or software components could be added to ance mismatch between electronics and automotive electronics. More suppliers are the vehicle without a lot of reconfigura- the car,” said Mr. Wilkie. That mismatch on the ragged edge of walking from the tion and reengineering.” He elaborated: leads to many of the problems carmakers auto industry.” “There are a number of fundamental de- and suppliers have with each other. For ◆ Carmakers tend to over-control sign approaches using active networks, example: their suppliers. This over-control mindset functional decomposition and shared ◆ Suppliers tend to over-promise. relates to the enormous cost associated computing, which could be borrowed from “One of the things that bothers me the with quality problems and recalls. How- the computer industry. These approaches most is when suppliers grossly underesti- ever, this makes it difficult for the best would allow true plug and play, the ability mate the difficulty of the automotive en- suppliers to improve designs and combine to upgrade vehicles already in service, and vironment,” declared Mr. Wilkie. Much of functions in order to reduce costs, and it to lower cost and improve reliability the disappointment within the telematics significantly delays progress. through low cost redundancy, shared in- industry is a result of suppliers who pro- formation and computing power.” mote new technology and features that Systems Engineering While implementing this approach to are not truly ready for automotive use. Good top-down systems engineering vehicle architecture will admittedly be “You’d get tantalized by what could get would solve many of the problems that difficult, Mr. Wilkie believes that it is do- done and believe them, but then they limit the potential of using more electron- able and well worth the effort: “It will wouldn’t deliver,” he said. ics in the vehicle. “The industry has used yield cost reductions, improvements in ◆ Suppliers don’t appreciate the auto- the words “systems engineering” for years, reliability, improvements in vehicle func- motive prove-out process.“There’s a kind but unfortunately true systems engineer- tions and updating capabilities even after of arrogance among electronics suppliers ing has not been happening on a vehicle the car is on the road. The first automaker that auto industry guys are a bunch of level as it needs to. ” said Mr. Wilkie. “To to do this will reap huge benefits.” ◆ hammer mechanics and that electronics is get the proper outcome, systems engineer- on a higher plane, more intellectual,” ex- ing must be done pervasively and thor- THE HANSEN REPORT ON plained Mr. Wilkie. “But it isn’t the intel- oughly at the total vehicle level.” AUTOMOTIVE ELECTRONICS lectual mistakes that can kill you, it’s the Each carmaker should have a dedicated simple stuff that can’t live in a car envi- vehicle system office that manages the © 2002 Paul Hansen Associates, 11 Went- ronment, or cross-talk within networks. … electronic and mechanical configurations worth Road, Rye, NH 03870, USA; Tele- People don’t appreciate the auto industry of the car. That office should establish the phone: 603-431-5859. Fax: 603-431-5791. and the development process and time- fundamental architecture for the vehicle E-mail: [email protected]. All rights lines and the discipline of meeting dates and specify which protocols and interfaces reserved. Materials may not be reproduced with quality,” he said. should be used. “You really need to start in any form without written permission. The ◆ Carmakers have less clout with systems engineering at the very top of the Hansen Report on Automotive Electronics is electronics suppliers. “OEMs are used to design process in order to make each part published 10 times a year, monthly; July/ dealing with a supply base whose very ex- function cohesively within the system.” August and December/January are com- istence relies on key relationships with a One of the many obstacles to true sys- bined issues. The annual subscription rate is few carmakers,” said Mr. Wilkie. “That’s tems engineering is carmakers’ belief that $677 (North America), $717 (elsewhere). not true with many major electronics sup- if they outsource a system to a particular Back issues are available for $45 each; see pliers—they also serve other, larger mar- top-tier supplier, they will lose clout and our online index at www.hansenreport.com. kets.” But despite their lack of leverage, won’t be able to keep costs down. An- Paul Hansen Associates is a strategy and carmakers try to dictate requirements and other obstacle is the lack of knowledge market research firm consulting to the elec- terms to those suppliers. about systems engineering. “Upper man- tronics industry. ◆ Carmakers put too much pressure agement at the carmakers and at the Publisher/Editor Paul Hansen on supplier margins. “Too much heat and suppliers really needs to have a more thor- Senior Editor Heather Parker energy is burned up in negotiations; and ough understanding of electronics and its Managing Editor/ Brianne Wolfe there is too much wrangling,” declared potential. ... Carmakers like BMW and Circulation Manager Mr. Wilkie. “The OEMs think the elec- Mercedes seem to have a better grasp of ISSN 1040-1105

Page 2, June 2002 The Hansen Report on Automotive Electronics, Rye, NH USA www.hansenreport.com NEC to Deal Automotive Electronics Business to Joining the many companies turning lion). NEC Automotive Electronics In addition to ECUs, NEC Automotive away from automotive electronics, NEC division’s sales have been about ¥22.5 bil- Electronics has developed electric-field recently announced its intentions to get lion ($180 million) per year. The merged sensors that detect seat occupancy and the out of the business of developing and business will begin operations in the fall size of the passenger. That information is manufacturing electronic control units of 2002. Honda will increase its invest- used to suppress airbag deployment when (ECUs) for vehicles. NEC will focus on ment in Nestec, making it a Honda sub- the seat is unoccupied and to prevent the businesses that fit better with its core sidiary, and NEC may end up owning airbag from injuring a small passenger. competencies, for example LSI (large one-third of Nestec. Seat sensors account for 25% of NEC Au- scale integrated circuit) semiconductors NEC’s Automotive Electronics division tomotive Electronics’ sales in North for vehicles. makes electronic control units for ABS, America, a percentage that will grow. For The NEC Automotive Electronics di- traction control, airbags and electronic the 2004 model year, the Nestec will be- vision and its roughly 200 employees will stability control systems. NEC Automo- gin shipping passenger seat sensors to be merged with ECU maker Nestec Co., tive Electronics’ largest customer is GM, Ford and Chrysler. NEC is already Ltd., a Honda company, which has about Honda, which accounts for 60% of sales. shipping seat sensors to Honda. In the 100 employees. Based in Utsunomiya, The company mainly serves , which States, seat occupancy sensors are man- Tochigi, Japan, Nestec’s annual sales are accounts for about two-thirds of total dated on 35% of all vehicles produced in approximately ¥3.7 billion ($29.8 mil- sales, and North America. the 2004 model year. ◆ 2001 Roundup of Japanese Auto Electronics Suppliers

For this article, fiscal year 2001 is the period Leading Japanese Automakers Production and Sales April 2001 to March 2002 from April 1, 2001 through March 31, 2002. Domestic Domestic Sales Exports Overseas Production Production Seiki Toyota 3,364,009 (-1.7) 1,678,414 (-5.4) 1,708,256 (+0.2) 1,833,003 (+4.6) FY 2001 Consolidated Sales: ¥1,221.9 1,272,851 (-3.1) 713,521 (-2.6) 577,119 (-4.6) 1,202,037 (-7.6) billion ($9.8 billion) Honda 1,315,433 (+6.6) 891,649 (+12.8) 427,953 (-6.3) 1,376,831 (+7.0) Change from FY 2000: up 8.3% 814,615 (-15.1) 467,971 (-9.9) 362,062 (-21.6) 841,703 (+0.3) FY 2001 Net Profit: ¥25.7 billion ($206 729,951 (-1.1) 268,356 (-12.5) 484,632 (+7.5) 128,409 (-11.2) million) or 2.1% of sales, compared with a ( ) = % change vs. the prior year Source: Maruboshi Japanese Automobile News loss of ¥7.2 billion ($58 million) in fiscal 2000. FY 2002 Estimated Profit: ¥3.8 billion FY 2002 Estimated Sales: ¥1,310 billion ($30.6 million) FY 2001 Consolidated Sales: ¥188 ($10.6 billion) Car audio products accounted for billion ($1.5 billion) FY 2002 Estimated Profit: ¥40 billion 70.3% of sales in FY 2001, compared with Change from FY 2000: down 0.4% ($321.3 million) 61.8% of FY 2000 sales. Car navigation FY 2001 Net Profit: ¥1.3 billion ($10.4 In July 2001, Aisin Seiki, , and car audio/video sales declined slightly. million) or 0.7% of sales Toyota and Sumitomo Electric Industries In February 2001, subsidiary company formed a brake manufacturing company Clarion Advanced Technology, which named Advics. Aisin Seiki holds 40% of FY 2001 Consolidated Sales: ¥460.5 develops Clarion’s in-vehicle computing the , which will be based in billion ($3.7 billion) systems, was spun off as Zandiant Tech- Aichi, Japan, at Aisin Seiki’s headquar- Change from FY 2000: up 7% nologies (Lake Forest, California). ters. In May 2002, Aisin set up a JV with FY 2001 Net Profit: ¥8.1 billion ($65.5 Bosch to produce CVTs (continuously million), 1.8% of sales Denso Corp. variable transmissions) in Japan. Aisin FY 2002 Estimated Sales: The company FY 2001 Consolidated Sales: ¥2,401.1 Seiki is a Toyota Group company. expects 6% growth in sales, to ¥488.1 billion ($19.3 billion) billion ($3.9 billion) Change from FY 2000: up 19.2%, due in Alpine Electronics FY 2002 Estimated Profit: ¥9.5 billion part to a change in the fiscal year for some FY 2001 Consolidated Sales: ¥196.1 ($76.6 million) or 1.9% of sales subsidiary companies in Japan. As a result, billion ($1.6 billion) Calsonic Kansei sold its wiring harness 15 months of sales are counted for those Change from FY 2000: up 8% operations to Sumitomo Electric and companies. Without that change, group FY 2001 Net Profit: ¥3.9 billion ($31 Sumitomo Wiring, effective July 1, 2002, sales rose 8.3%. million), 2.0% of sales; slightly better and intends to focus more resources on FY 2001 Net Profit: ¥72.3 billion ($583 than last year’s 1.8% margin. cockpit modules. In 2001, North Ameri- million) or 3% of sales, the same margin FY 2002 Estimated Sales: ¥200 billion can subsidiaries Calsonic North America as in FY 2000. ($1.6 billion) and Kantus Corp. merged. continued on page 8 The Hansen Report on Automotive Electronics, Rye, NH USA www.hansenreport.com June 2002, Page 3 The Company Profile... Microsoft Automotive Business Unit

Thumbnail Sketch tomotive software platform will be re- leased in the fall of 2002. This newest ver- WCEfA Design Wins sion will be based on Windows CE .NET, Address: Microsoft Corporation, One OEMs Shipping Today which reflects Microsoft’s view that future Microsoft Way, Redmond, Washington BMW 7 Series (SiemensVDO makes the mobile computing will stem from the In- 98052; Telephone 425-882-8080; fax 425- device) ternet. 936-7329; www.microsoft.com/automotive PSA Citroën Xsara and C5 When Clarion’s AutoPC telematics Products: In-car software components, Toyota SUV device was first announced, the industry including the Windows CE for Automotive Volvo S60, S80, V70 and V70XC found the concept “compelling, not nec- (WCEfA) operating system, APIs, applica- (Mitsubishi Electric makes the device) tions and services essarily for the applications or services that it offered, but for its use of a standard Markets: Worldwide, OEM factory/dealer Aftermarket Devices, operating system,” suggested Gonzalo and aftermarket Shipping in 2002/2003 Bustillos, director of business develop- Parent Expenditures on R&D: 17.3% of Borg ment and marketing for the Emerging revenue in fiscal 2001 Bosch Technologies Group. Mr. Bustillos over- Sales: Insignificant, less than 1% of Clarion sees the marketing and business develop- corporate sales. Denso ment of the Automotive Business Unit. Employees: 80 total; each region has MCI/Panasonic The value of that connected-car-com- between 5 and 15, including software Mitsubishi puter concept diminished significantly development managers, business manag- Nextech ers, engineers and local sales support because the market and the infrastructure people; today there are 8 engineers in were not quite ready, according to Mi- Europe, about a dozen in Japan, and in crosoft. However, in the last five years, point of all mobile communications. Re- Detroit about 4 because support can easily the company has come to believe that gardless of where the consumer is and be flown in from headquarters in Redmond, wireless technologies like Bluetooth and what device she is carrying, Microsoft is Washington. Developers are all in 802.11 make the concept viable now. hoping its .NET technologies will be Redmond, Washington. Microsoft believes its fourth-genera- there. “We are now talking about more Regional Teams: Tokyo, Japan for Asia/ tion Windows CE operating system, ver- than just a particular device, we are also Pacific market; Munich, Germany, for sion 3.5, deals with developers’ demands talking about the [general] platform that European market; Detroit, Michigan, and to be able to individualize telematics/mul- will allow many hardware and software headquarters in Redmond, Washington, for timedia systems, to customize the appear- developers as well as service providers to North and South America ance and functionality of their systems. add value,” pointed out Bob McKenzie, With version 3.5, developers can adapt general manager, Microsoft Automotive their applications for diverse markets, Business Unit. Background building as much or as little as they wish Microsoft’s .NET technologies for de- Microsoft began working on Windows into the basic platform, with the option of velopers do not require Microsoft operat- CE for small footprint, embedded devices adding more later. ing systems, either at the client or at the in 1994, and a derivative of Windows CE, The Automotive Business Unit is part server, nor any particular programming the AutoPC, in 1995. In early 1999, after of Microsoft’s Emerging Technologies language. They provide a universal format a later than expected start, Clarion Group. In 2001, Microsoft changed the that allows easy sharing, adapting or shipped the first AutoPCs to the aftermar- composition of its business segments. The transforming of data over any device with ket in the United States, but sold only internal reorganization reflected a major any programming language. The company about 1,000 units that year. In January change in the company’s vision of the fu- will sell .NET web infrastructure software, 2000, Citroën was the first carmaker to ture, one that revolves around Microsoft server and device software plus web con- introduce the AutoPC on a model line, .NET, and shifts the focus from a specific tent and services, for example, through its the Xsara; it was based on the AutoPC device orientation to a broader web orien- MSN content aggregator Carpoint.com. 2.0, with hardware manufactured by tation, in which the lines between ser- The emerging market for telematics Clarion. Introduced in September 2000, vices and applications blur. software and services, as well as mobile version 3 was a real-time operating sys- hardware, has been pegged by some ana- tem, more reliable and capable of more Looking to the Future lysts at anywhere from $30 million to scalability. Microsoft’s fourth-generation The fifth version of Microsoft’s auto- $100 billion annually, five years from now, telematics, navigation and multimedia motive software platform will be based on but according to Mr. Bustillos, a more re- platform, WCEfA 3.5, was introduced in the Window CE .NET operating system, alistic number is between $10 billion and November 2001. The fifth-generation au- which assumes the Internet as the starting $15 billion. However, he emphasized that

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graphical user interface and the introduc- Windows CE for Automotive 3.5 tion of the Internet.” Microsoft’s fourth-generation telematics, navigation and multimedia platform, WCEfA 3.5, Microsoft intends to invest heavily to was introduced in November 2001, and reflects Microsoft’s latest view that the Internet is make its .NET products successful. The going to be the center of computing. Windows CE for Automotive version 3.5 uses an XML 2001 annual report pointed out that in (Extensible Markup Language) web parser, which allows many applications, regardless of addition to new product-launch expendi- operating system or programming language, to communicate and share data over the Internet. tures, the company intends to invest ap- The next-generation Windows CE for Automotive software platform will be based on the proximately $5 billion in fiscal 2002 in Windows CE .NET embedded operating system and will support a wide array of next- research and development “At the center generation web services. Microsoft expects to ship this newest automotive software platform in of our R&D efforts is Microsoft .NET … the fall of 2002. [which] will create new opportunities for Microsoft and for thousands of developers WCEfA 3.5 has these features: and industry partners by enabling constel- ◆ A platform configuration that enables developers to create compact devices with limited lations of PCs, servers, smart devices and storage capacity; developers can start small and build as much or as little as required by Internet-based services to collaborate the carmaker. seamlessly,” noted the annual report. ◆ Hands-free communications that allow natural speech, not just commands; supports SAPI “Over the next five years, as we infuse (Speech Application Programming Interface), a global standard interface for speech XML Web Services into all our businesses, engines; uses a natural sounding, phonetics-based speech-recognition and text-to-speech we see the opportunities for growth con- technology called SUI (Speech User Interface) in XML file format; is open to a variety of tinuing. This transformation is key to ex- speech engines. panding our revenue stream moving ◆ Driver distraction control, which can prevent access to certain applications and functionality forward.” when the vehicle is moving. ◆ High-resolution graphical user interface that allows carmakers to focus on brand differentia- Sales tion. When we suggested that Microsoft’s ◆ Fast drawing, using GDI-Sub, for navigation maps. reluctance to give us any sales numbers ◆ Audio and video support. hinted at embarrassingly low revenues for ◆ Microsoft Mobile Explorer, a wireless communication platform, is a compact version of the the Automotive Business Unit, Mr. Internet Explorer browser’s software; WCEfA 3.5 also has a full-featured GenIE browser, a McKenzie told us: “Our customers have speech-enabled browser container that delivers the core HTML control for customers and not sold enough to have clear numbers as Internet service providers. this is just beginning. And you know, it ◆ Customized development tools which include flexible, scalable building blocks from which to really doesn’t matter at all to us how choose a variety of development systems, such as ActiveX Controls and Visual Basic, to much we do today, because we are build- create low-end to high-end applications based on car manufacturer requirements. ing relationships, winning designs and ◆ Power management architecture that eliminates the need for a backup battery and ensures shipping products. ... Our business is going rapid startup and shutdown without data loss. to increase for the next decade—that’s for sure. We’ve seen steady progress each the revenue Microsoft receives from undreamed-of ways. The current com- year.” telematics in the next five years is not the pany-wide direction is less device-ori- Today, Microsoft software is used in important point: “We are committed to ented, moving away from “a PC on every production vehicles manufactured by four automotive because automotive is so very desktop” to web applications and web ser- carmakers: PSA Citroën, BMW, Volvo core to what Microsoft’s vision is for the vices, crucial to the company if its rev- and Toyota. Shipments will also go to long, long run. … Telematics is changing enues are to grow as they have in the past. these seven aftermarket suppliers some- the way we talk of mobility. And mobility The revenue growth rate for the entire time in 2002 or 2003: Borg, Bosch, is the core of Microsoft’s greater strategy.” company was 29% in fiscal 1999, 16% in Clarion, Denso, Mitsubishi, MCI/Pana- In addition to the 80 people working in fiscal 2000 and 10% in fiscal 2001. sonic and Nextech. the Automotive Business Unit, another According to Mr. McKenzie, Denso 300 work in the Mobility Group. Ap- Big Investment in .NET and Bosch are committed to using Mi- proximately 500 people in other groups The 2001 annual report stated that the crosoft software for all their product line are available to support the development core of R&D efforts is Microsoft .NET, a in telematics, multimedia and naviga- of Windows CE and .NET for automotive new computing model built around XML tion—everything that requires an operat- applications. web services. In a surprisingly bold state- ing system. While it has been widely For Microsoft, mobility means market- ment, the annual report called Microsoft reported that Bosch lost all its Mercedes ing software that spans many industries .NET “an innovative effort as significant navigation business to Harman Interna- as devices connect in the future in in the development of computing as the continued on following page

The Hansen Report on Automotive Electronics, Rye, NH USA www.hansenreport.com June 2002, Page 5 Microsoft Automotive Business Unit

stock quotes, headlines of the day or the Next-Generation Mobile Information Management: Microsoft’s Car .NET subject line of your email can be sent us- Car .NET solutions will connect the vehicle to the Internet. They will allow easier exchange ing .NET technology. Microsoft will de- of information between devices and servers. Microsoft’s .NET technologies are based on velop products that build on what they do non-proprietary, industry-supported standards. Car .NET combines the Windows CE for best; there are no plans, for instance, to Automotive platform with .NET technologies, for use in telematics applications. do vehicle diagnostics.

Windows CE for Automotive supports the following wireless connectivity technologies: Wireless Infrastructure ◆ 802.11: high-bandwidth, local-area networking (about 100 meters) Many of the things Microsoft talked ◆ GPRS and CDMA: moderate high bandwidth, cellular-based, wide-area networks about five years ago, like Instant Messag- (cities and interstate), for transmitting complex information and graphics ing, hands-free telephony and location- ◆ CDPD (Cellular Digital Packet Data): low bandwidth, cellular-based, wide-area based services are now possible. Mr. networking (cities and interstate) Bustillos told us, “Anywhere in the U.S., ◆ Bluetooth: high-bandwidth, personal area network (about 10 meters) for communica- wireless data technology is already mature tions to handheld devices and service tools, or for connection to cell phones as a enough so that many of the services that gateway to wide-area coverage depend on that wireless link are feasible today, unlike five years ago.” In the future, multiple wireless links tional, Mr. McKenzie advised: “It is not 90% of BMW 7-Series customers world- will be available to the vehicle; some will quite true that Bosch lost all of its wide pick the navigation option. At the continue with limited bandwidth, and Mercedes business. ... And while end of the first quarter 2002, BMW had some will use always-on communications Mercedes was their number-one customer, sold about 10,000 of the new 7 Series. technologies like GPRS (General Packet Bosch till supplies to Opel and Fiat in Eu- Radio Service), 3G (third generation mo- rope.” Windows CE .NET bile services) and paging networks. Cur- According to Microsoft, the company “Our philosophy at Microsoft is that rently, low bandwidth wireless links can will begin shipping to another six auto the Internet is going to be the computer,” bring small amounts of data into the ve- companies in the next three to 12 declared Mr. Bustillos. Microsoft .NET hicle, like instant messaging, simple diag- months. While Microsoft cannot yet re- web technologies will facilitate interac- nostics and traffic information. The play veal who these new customers might be, it tion among various manufacturers’ serv- for Microsoft is that the vehicle software does say that this new business is with the ers, home and office PCs, vehicles and must be capable of discerning how the top ten carmakers, some in the top five. small mobile devices. Microsoft .NET uses links are connected and when which ones Several will be announced in next couple open global web standards set up by W3C are needed. of months. The devices cover a range of (the World Wide Web Consortium). applications from on-board and off-board Some products and services based on Telematics to Multimedia Continuum embedded navigation devices like those in .NET technology have been shipping for a As Microsoft sees it, there is no clear Volvos today, all the way to connected, couple of years; Car .NET is the adapta- distinction between the services provided next-generation or infrastructure-based tion for the car industry. by telematics and those provided by mul- telematics devices. Mr. Bustillos elabo- “Microsoft’s software encompasses ser- timedia products, so that telematics rated on these contracts: “These are not vices, and moving forward, services and broadly includes hands-free email and just high-end vehicles with limited vol- applications are basically one,” said Mr. voice-mail delivery, electronic commerce, umes; most are mid-range vehicles with Bustillos, referring to Microsoft’s new view automated parts/service updates, real-time high production volumes, and most have that its products will involve the Internet traffic updates, satellite radio subscrip- scalable platforms.” much more than in the past. Car services tions, real-time Internet browsing as well Retail prices for devices and systems and content could be accessed through as streaming audio and video. The key currently shipping range from $400 for www.carpoint.com, the auto channel for will be a general-purpose, in-car computer entry level up to $3,000 for end-to-end MSN’s 270 million users. The most that can be scaled up very quickly to more solutions in luxury vehicles. browsed of all car web sites, according to complex multimedia products. Microsoft Mitsubishi Electric Corp. (MELCO) Microsoft, MSN Carpoint is available in intends to use the Car .NET umbrella of today builds the in-car device for Volvo. 19 countries and 11 languages. MSN technologies as a way to add value to The primarily function of WCEfA in Carpoint provides instant real-time traffic products by working with some customers Volvo is navigation. SiemensVDO is the information for more than 68 metropoli- on entry-level devices, followed later by navigation supplier to BMW and uses tan areas via email, MSN Messenger Ser- more advanced devices that will provide a WCEfA in the control display for the vice and certain mobile devices supported richer in-car experience. iDrive functions in the MY 2002 7 Series. by MSN Mobile. Map directions, location According to Mr. McKenzie, greater than services, yellow pages, instant messaging, Key to Success in Telematics is

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Scalability ten to real-time quality standards. The specific technology that we cannot sup- To accommodate the range from hardware must also correctly support real- port—Java. We have legal reasons why we telematics to multimedia products, Win- time operation.” cannot. Lawsuits from Sun prevent us dows CE is scalable from two perspectives, Dedicated Systems Experts (Brussels, from doing that.” There are also technical hardware and software. On the hardware Belgium) is a research group that special- reasons. Mr. Bustillos’ position is because side, you can scale up and down by chang- izes in development support for the infor- the Java platform (J2ME) requires extra ing memory, the CPU and some of the I/ mation systems sector, and in particular, memory for the virtual machine and extra Os, allowing carmakers to add or even dedicated systems. In a technical evalua- processor power for running Java code, it reduce connectivity in future models. tion of Windows CE 3.0, Dedicated Sys- is at a disadvantage in many automotive That is an advantage in getting products tems Experts noted: “Windows CE 3.0 applications. to market quicker. On the software side, has, as far as real-time features and behav- Nevertheless, Microsoft also insists it Microsoft Car .NET can scale up or down ior are concerned, made tremendous stands for an open interface for the car. to receive more information, new applica- progress compared to previous releases. … Mr. Bustillos elaborated: “If a partner tions, as well take on a new user interface. It can now be considered an RTOS.” In wants a Java virtual machine running on a Microsoft’s customers are able to consider that evaluation, QNX RTOS v6.1, from Windows CE technology, that can be a wide range of product offerings, and to- QNX Software Systems (Ottawa, Ontario, done, absolutely, and if a customer comes day, Microsoft’s customers use a range of Canada) was said to live up to its reputa- to us and says they want to do that, then technologies, with some thinking about tion in the industry “as a high-quality fine, I can send them to 2 or 3 companies, phone docking and others about Blue- RTOS … throughout the tests, it per- like Insignia Solutions or NSIcom, that tooth wireless. formed fast and predictable, and never do that. However, the concept of using showed any signs of instability.” virtual machines goes a little bit deeper Japan Consortium A more recent Dedicated Systems Ex- than that because it is not necessarily Java Microsoft’s Windows CE for Automo- perts’ evaluation of three RTOS, all run that the industry is looking for. We have tive Forum in Japan, has 106 companies on Intel x86 platforms, included Windows exactly the same thing [as Java] ... You can with WCEfA programs. The forum is a CE .NET, the successor of Windows CE abstract the OS and you can abstract the consortium of companies working to- 3.0. The evaluation stated that Windows hardware, just as Java is promising.” ◆ gether to share drivers, components, APIs CE .NET “exhibited real-time behavior,” and a common platform across devices, and further, “none of the stress tests ex- Microsoft Automotive beyond just navigation systems. Forum posed any problems concerning stability Business Unit Partners members include the top five or six tier- and robustness.” On the other hand, tests one suppliers, such as Denso, and many of Wind River Systems’ latest RTOS suppliers who support the tier-ones. product VxWorks AE 1.1 “did expose 3SOFT Mecel some acute problems.” The third product Accenture Nextech Co. Windows CE: Real-Time RTOS compared was QNX RTOS v6.1, which Audible Inc. Oasis Silicon The need for RTOS (Real-Time Oper- was found to be “fast, predictable and reli- AutoPCWare Systems ating Systems) arises with the definition able at all times ... the only RTOS that Borg ScanSoft Inc. of an embedded application: What takes has a true message-based client-server ar- Bosch Silicon Motion Inc. priority? How many programs are running chitecture well-equipped to handle today’s BSQUARE Corp. SiRF Technology at the same time? How fast can they re- requirements concerning distributed pro- Clarion Corp. of Softing spond? Real-time operating systems must cessing, high availability, etc.” (Its web America STMicroelectronics be based on reliable embedded, real-time site states that QNX makes the leading Delphi TEGARON or fault-tolerant technologies. Mr. Bustil- RTOS for PCs, and “a fully optimized Java EDS Telematics los told us that Windows CE for Automo- VM” can be derived from QNX RTOS.) Elan Telcontar tive 3.5 does not have problems with Elmic Toshiba RTOS performance, but that perhaps No Support for A-MIC or Java e-SIM TravRoute some developers have issues with the As its new motto suggests, Microsoft EZOS Visteon Corp. implementation of the OS technology supports open standards: “Any Time, Any Fonix Corporation Winlinx and applications. He explained, “Automo- Place and on Any Device.” If that has a Fujitsu Ltd. WirelessCar tive developers need an RTOS as a basis familiar ring to it, remember that Java Ltd. Yaskawa for creating reliable, high-quality devices, promises “Write Once, Run Anywhere.” InfoGation Corp. Corporation but the OS is not the only thing respon- The industry is certainly interested in in- InfoMove Zandiant sible for acheiving real-time performance. dependent CPUs and operating systems. Intel Corporation The developers must also ensure that the Unfortunately, Mr. Bustillos told us: “A- Matsushita Electric applications and device drivers they write MIC, which stands for standardizing an Industrial Co. to run on top of the RTOS are also writ- open interface for the car, has chosen a

The Hansen Report on Automotive Electronics, Rye, NH USA www.hansenreport.com June 2002, Page 7 FlexRay... Continued from page 1 Why FlexRay satisfy its requirements, both technical electromechanical brakes are far easier to In a May 2002 press briefing, the and commercial. build, are more serviceable, more reliable FlexRay consortium wrote: There is an important consideration, and the response time between the Before carmakers decide on a particular which for now favors TTA: Companies driver’s foot and the brakes will get faster. protocol, they should consider these can test prototype TTA systems using ex- “The response time is improved by a FlexRay attributes: isting silicon chips provide by TTA mem- couple orders of magnitude, and that ◆ FlexRay is open for everybody ber, austriamicrosystems. FlexRay won’t enormously improves the link between (OEMs, suppliers and tool vendors). be able to supply engineering samples the driver’s intentions and the braking ◆ In FlexRay there is no exclusivity. until 2004. Those will be provided by maneuver,” noted Mr. Baker. Another ◆ No royalties FlexRay members Motorola, Philips and benefit of EMBs is they are much easier ◆ Qualification will be made through Texas Instruments. TTA lists no other to integrate with other chassis systems. conformance testing. chip provider members besides austria- And since with EMBs there is no direct microsystems. link between the brake pedal and the While FlexRay advocates say they like brakes, the disconcerting feedback felt on FlexRay because of the way it performs Safety Critical By-Wire Applications the brake pedal when ABS pulses during and because it can be flexibly applied to Whether carmakers choose FlexRay or emergency braking will not be an issue. a broad range of vehicles, they like it best TTA, a safety-critical communications As with any new technology, cost is a for its commercial attributes. Simply put, network is an essential ingredient in major obstacle in bringing electrome- FlexRay is a much better business deal brake-by-wire and steer-by-wire systems, chanical brakes to market. All but the than TTA. “There are no royalties linked which do away with all hydraulic compo- smallest cars will require 42-volt power with using or implementing any piece of nents. The first of these systems to come systems in order to actuate the brakes the technology, declared Ben Baker, who to market will probably be electrome- with good dynamics. Forty-two-volt sys- runs GM’s Electrical Center. “In the chanical brakes (EMBs), and they won’t tems are expensive and will stay that way FlexRay consortium, all members agree to appear in production passenger vehicles at least until 2007. Another major cost provide for free whatever intellectual until 2007, at the earliest. Electric brakes factor comes with the redundancy re- property is relevant.” Before making the do away with hydraulics and power the quired with EMB systems. Extra compo- decision to join the FlexRay consortium, brakes with powerful, quick-response nents need to be added to the braking General Motors shopped for the right electric motors. According to Ben Baker, system so it will operate 100% of the time, communications protocol that would compared with regular hydraulic brakes, without the possibility of failure. ◆

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FY 2002 Estimated Sales: Denso is grew 6.7% to ¥261.2 billion ($2.1 million) or 4.2% of sales forecasting an 8.4% drop in sales, to ¥2.2 billion). FY 2002 Estimated Sales: ¥222 billion trillion ($17.7 billion). Change from FY 2000: 3.4% ($1.8 billion) Sales in Japan in fiscal 2001 grew 4.1% FY 2001 Net Profit: ¥8.05 billion ($64.8 FY 2002 Estimated Net Profit: ¥8.5 to ¥1,643.1 billion ($13.2 billion). In the million), which is 1.2% of sales, down billion ($68 million) or 3.8% of sales Americas (North, South and Central) from 2.8% of sales in FY 2000. sales grew 37.6%, to ¥643 billion ($5.2 FY 2002 Estimated Sales: ¥720 billion Unisia Jecs billion). Excluding the effects of the ($5.8 billion) FY 2001 Consolidated Sales: ¥199.4 change in the reporting period, sales in FY 2002 Estimated Net Profit: ¥11 billion ($1.6 billion) the Americas grew 9.5%. billion ($88 million) or 1.5% of sales Change from FY 2000: up 2% Domestic sales grew 6.9% mostly due FY 2001 Net Profit: ¥1.8 billion ($14.7 Nippon Seiki to increased sales of hard disk drive million), 0.9% of sales FY 2001 Consolidated Sales: ¥111.7 navigation and DVD navigation systems. Unisia Jecs will become a wholly- billion ($896 million) Contributing to Pioneer’s 6.5% overseas owned subsidiary of Hitachi Ltd. on Change from FY 2000: nearly flat, up growth was increased sales of digital October 1, 2002 through an exchange of just 0.6% satellite radio tuners in the United States. stock. The company will then be known FY 2001 Net Profit: ¥4.8 billion ($39 as Hitachi-Unisia Automotive Ltd. million) or 4.3% of sales, vs 1.5% of sales Hitachi now owns 16.7% of Unisia Jecs; in fiscal 2000 Tokai Rika Nissan Motor Co. is currently the largest FY 2001 Consolidated Sales: ¥222 shareholder with a 25.3% stake, Robert Pioneer billion ($1.8 billion) Bosch GmbH has a 10.1% share. ◆ FY 2001 Consolidated Sales: ¥651.3 Change from FY 2000: up 3.8% billion ($5.2 billion). Car electronics sales FY 2001 Net Profit: ¥9.3 billion ($74.6 Page 8, June 2002 The Hansen Report on Automotive Electronics, Rye, NH USA www.hansenreport.com