Vol. 23, No. 6◆◆ hansenreport.com July/August 2010

Multiple AC Charge Revolutionary New Coupler Standards for Electrohydraulic Brake System EVs Emerge Integrated Brake System Is Smaller, function of brake force amplification, Lighter, Simpler which in conventional systems requires a DC Fast Charging Standards Still in vacuum booster, as well as the pressure Early Stages Thomas Leiber—son of Heinz Leiber, modulation at each wheel in ABS/ESC With automotive electronics standards the man who invented ABS—chose last mode. The EC motor provides extremely like CAN, FlexRay, Autosar and Genivi, month’s automotive electronics confer- accurate pressure control and thus signifi- the Germans have been the pioneers, but ence in Ludwigsburg, Germany, to disclose cantly shorter braking distances, espe- when it comes to connecting plug-in elec- the details of his integrated modular brake cially on slippery roads, with no trade-off tric vehicles to the grid, it is the Ameri- system (IBS), a development he and his in stability. Winter road tests in March of cans, with cooperation from the Japanese, father have been working on for six years this year showed single-digit percentage who have been out front on standards. at their firm, LSP Innovative Automo- improvements in the stopping distances of “We always invited anyone to attend tive Systems GmbH. The new electrohy- an LSP test car, a Golf V equipped with our meetings, but I think we did get an draulic braking system, which fully IBS, compared with a Golf VI with ESP early step into this,” said Gery Kissel, an integrates hydraulic braking, ABS and Plus. The company expects to see even engineering specialist with General Mo- ESP into a much-simplified package, is greater improvements in the future. tors and the SAE J1772 task force leader, not only superior in functionality to con- The motor has an integrated ball screw who began work on the AC coupler stan- ventional pneumatic/hydraulic systems in that moves a piston of a tandem master dard more than three years ago. “We had mass production today, but is less expen- cylinder (TMC). In normal braking, the new product coming down the pike [the sive to manufacture, since it is half the piston is moved forward to amplify brake GM Volt extended range electric vehicle] weight, one-third the volume and 70 mil- force with all four valves open. When the and we knew we needed a standard. The limeters shorter. target pressure is reached, the piston re- Japanese, through JARI, have been IBS replaces most of the components mains in a defined position or the valves aboard from day one,” he added. JARI is used in ABS/ESC systems today. There is are closed to maintain pressure. In ABS the Japan Automobile Research Institute. no vacuum pump, no vacuum booster and mode, the pressure at each wheel must be Mr. Kissel started standardization ef- no reciprocating pump for ABS. IBS re- varied, and that is done by sequentially, forts with the AC interface because AC quires only four solenoid valves and a and in some cases simultaneously, opening will cover 90% of the early charging re- pressure sensor. Conventional ESC sys- and closing the valves to each wheel quirements. “We wanted the lowest cost, tems have 12 valves. while the piston of the TMC reciprocates most reliable AC interface we could de- The crux of the new braking system is very dynamically between different posi- sign. We focused on that primarily be- a highly dynamic, electrically commu- tions. The pressure gradients that can be cause plug-in hybrids or extended-range tated (EC) motor that takes over the Turn to Brake System, page 3 electric vehicles like the Volt will be the predominant types you will see, at least LSP’s Integrated Modular Brake System (IBS) initially, because of the cost of the batter- , p ▲ ies. To get a 100-mile range in a battery ESPESP ∆∆pp ◆ Piston control electric vehicle requires a substantial, very defines pressure costly battery pack. Because EREVs have 2. IBS gradient and ∆p an engine, you can use a smaller battery ∆∆VV V pack that doesn’t require a lot of charging switching ∆ ◆ High positive and Switching valve ∆VV power. The other reason is the infrastruc- valve negative pressure ture itself. Low power AC electrical out- gradients possible lets are everywhere.” Published in January 2010, SAE J1772 Σ 4 valves for ABS ◆ Individual car Σ 4 valves for EC motormotor withwith ball covers two levels of onboard AC charg- and ESP functions ABS and ESP PressurePressure sensor screwball screw adaptation by ing. Level 1 handles 120 volt (100 volts function sensor software Turn to Charging, page 2 Source: LSP Innovative Automotive Systems Charging... Continued from page 1

AC for the Japanese) charging from stan- SAE J1772 Charging Interface hours. Such DC charging stations are in- dard home outlets capable of 15 or 20 tended for consumers and for businesses. amps, about 1.9 kilowatts. Level 2 handles Terminology Unlike AC charging, where the 208 to 240 volt AC charging at up to 80 ◆ AC Level 1 Charging charger is onboard the vehicle, the DC amps, or 19 kilowatts. Not only does the 120 V AC charging from standard 15 or 20 charger, which converts AC power to DC, standard comprehend physical character- amp NEMA outlet, onboard vehicle charger is off board and connects directly through istics such as the number of pins and their (approximately 1.9 kw) the charge coupler to the vehicle battery layout, but it also specifies some intelli- ◆ AC Level 2 Charging bus. Not all vehicles will have DC charg- gence. For example, the charge plug that 208 V – 240 V AC charging up to 80 amps, ing capability. you hold in your hand cannot be powered on-board charger (approximately 19 kw) As a first step in a process that will until it is plugged into and commanded by ◆ DC Charging (Fast Charging) take at least a year before a fast charge the vehicle. And the vehicle must auto- Off-board charger connects directly to the SAE standard is approved, Mr. Kissel’s matically detect that the plug is engaged vehicle’s high-voltage battery bus task force has been looking at the DC to prevent anyone from driving away Charger is controlled by the vehicle, which charge coupler that was developed for the while it is still connected. Level 1 and allows for extremely high power transfer Japanese market by JARI (see Japan Elec- Level 2 connectors have five pins: two for (>100 kw) and thus faster recharge times tric Vehicle Standard G105-1993). The power, one for ground and two for the (minutes instead of hours). Actual charge JARI coupler is now being promoted glo- analog communications between the ve- rate is limited by battery chemistry, infra- bally by CHAdeMO, a group of 226 busi- hicle and the charging equipment. structure and other factors. nesses led by Toyota, Nissan, Mitsubishi But while NAFTA and Japan, which Source: Gery Kissel, GM and SAE J1772 Task Force Lead Motors, Fuji Heavy and Tokyo Electric together are responsible for 21% of the “We expect to issue IEC standards cov- Power. CHAdeMO is a shortened form world’s vehicle production, are in har- ering three types of AC connectors and for the equivalent of “charge for moving.” mony with SAE J1772, the rest of the inlets by the end of this year or very early This connector has already been de- world isn’t. The International Electro- next year,” said Gregory Nieminski, who ployed in Mitsubishi Motors’ i-MiEV elec- technical Commission (IEC) is consider- chairs the Industrial Plugs and Socket tric vehicle launched in Japan a year ago. ing publishing standards covering three Outlets working group at IEC. “The chal- It will also be deployed in the Nissan Leaf different AC connector/vehicle inlet lenge in Europe is that each country has electric vehicle due this fall in the U.S., pairs: a single-phase, 5-pin connector that its own national electric code regulations Europe and Japan. The Leaf is coming to corresponds closely to J1771; a three- and they are different.” market with two charge receptacles: a phase, 7-pin connector proposed by Ger- Even after the IEC’s forthcoming stan- continued on page 3 man and other northern European dards are published, electric vehicle plug carmakers; and a single- and three-phase, standardization will remain in a state of 5- or 7-pin connector for the Italians. flux in Europe. “While we have an agree- The Chinese, who have not yet for- ment, it isn’t set in stone. Our standards © 2010 Paul Hansen Associates, 150 mally joined the IEC committee, recently are the type that will constantly need up- Pinehurst Rd., Portsmouth, NH 03801, proposed yet another connector standard dating,” said Mr. Nieminski. “In the next USA. Telephone: 603-431-5859. Fax: 603- which, while similar to the German ap- year or year-and-a-half I expect we’ll be 431-5791. Email: [email protected]. proach, is incompatible with any of the back at them, revising and improving All rights reserved. Materials may not be standards the IEC is developing. them. The different connector types will reproduced in any form without written eventually need to be merged so you can permission. SAE J1772 AC Charge Coupler drive an electric vehicle from Italy to Ger- The Hansen Report on Automotive Electron- many without confusion.” ics is published 10 times a year, monthly; That worthwhile objective, to move July/August and December/January are toward one AC connector throughout combined issues. The annual print subscrip- Europe, was agreed to by members of the tion rate is $787. Back issues are available European Automobile Manufacturers As- for $50 each. Index and multi-user electronic sociation (ACEA) in a statement issued subscription information is available at in June. ACEA called for a uniform solu- www.hansenreport.com. Paul Hansen Asso- tion for all new vehicles by 2017. ciates is a strategy and market research firm consulting to the electronics industry. Fast DC Charge Systems Publisher/Editor Paul Hansen Mr. Kissel’s SAE task force is now turn- ing its attention to interface standards for Managing Editor/ Brianne Wolfe high power (greater than 100 kilowatts) Circulation Manager DC charging capable of recharging an Director of Marketing Michelle Long Source: SAE electric vehicle in minutes instead of ISSN 1040-1105 Page 2, July/August 2010 The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com Brake System... Continued from page 1 achieved with the highly dynamic motor lic pipe connections compared with 180 hesitant to bring a new system to market, are significantly higher than pressure gra- contacts (60 connector pins plus 120 even though IBS uses many components dients of conventional systems, particu- crimping contacts) for electric brakes. that are already in mass production. Auto- larly at lower pressures where pressure “The hydraulic pipe connection to each motive tier ones generally try to avoid gradients are five times higher. By con- wheel is well proven and extremely reli- licensing, preferring their own develop- trolling the position of the piston, the able,” said Dr. Leiber. ments. We went public and built our own pressure can be controlled very precisely. LSP signed its initial tier-one licensing test car to make it common knowledge The IBS motor was developed by LSP agreement for the integrated modular that this is real. Our goal is to establish initially for use in electric valve trains. brake system two years ago, but went pub- IBS as a global standard. At least two While electric valve train systems haven’t lic in Ludwigsburg in June in order to carmakers say they have concrete plans to gone into series production, LSP motors drum up more global interest following a put IBS into production.” designed for that application have already winter test presentation to major OEMs in LSP was founded in 1998 by Thomas been through more than 1,000 hours of March in Arjeplog, Sweden. That first Leiber and his father, Heinz Leiber, who engine testing. agreement is with a German tier-one prior to that was head of development at “What is especially unique about the brake system supplier. Bosch and later vice president of the elec- motor is its low inertia combined with Dr. Leiber, who is currently in ad- trical and electronics division at Daimler- extremely high torque,” said Dr. Leiber. vanced talks with both Asian and U.S. Benz. While Thomas Leiber now owns “Unlike most motors, which are designed suppliers and OEMs, expects to complete the company and is CEO, Heinz Leiber to run at constant speeds, this motor is two more unrestricted licensing agree- actively contributes advice and ideas. designed to accelerate and decelerate ex- ments in the very near future. “Asian With 20 employees, LSP focuses on inno- tremely fast. Its low inertia is provided by companies are especially eager to get a vative mechatronics systems. two air gaps between the rotor and stator, hold of this new technology, while incum- Even though IBS is mature in func- which makes the rotor extremely thin,” bents in Europe have a slower decision tionality and has a series stage design, Dr. he explained. The electrically commu- process,” he noted. Leiber expects it will take four to five tated motor uses a Hall angle sensor. Dr. Leiber acknowledged that selling a more years before it is brought to market At half the cost, IBS is an especially new brake system approach to the auto- in a production vehicle. “The normal pro- promising alternative to electric brake motive industry has not been easy: “The cess requires three years of winter testing, systems. It is far less complex and there- big tier ones have made huge investments at least. Brakes are the most conservative fore more reliable. IBS requires 12 hydrau- in their existing technology, so they are system on the vehicle,” he said. ◆

Bosch Forecasts Charging... Continued from page 2 Penetration of Alternative J1772 Level 2 plug receptacle for charg- vehicle is connected to the charging sta- ing at 110/220 volts, and a Level 3 tion it could download large infotainment Powertrains by 2020 CHAdeMO receptacle. files or receive software updates. Having to install two separate recep- “We will use powerline carrier (PLC) Total Global Vehicle Production tacles is something SAE planners are try- technology for off-board communica- 2008 70 million ing to avoid and the reason they have tions,” said Mr. Kissel. “The data signal 2012 82 million been working on a single receptacle that will come from the power pins, so we 2020 103 million will work for either AC or DC charging. won’t need any more physical pins to have this. Now we are trying to figure out “We’re trying to bring it all down into one Electric vehicles and plug-in 19.2 connector so it is simpler for the cus- which PLC technology is best; there are hybrids lots of different flavors. Besides us, some Hybrid vehicles tomer—just like fueling the car. There is 3.0 only one spot for that,” said Mr. Kissel. IEC/ISO groups are also looking at this Other (FlexFuel, CNG, LPG) and we hope to come up with a single “While the Japanese have done a lot of millions of vehicles good work with the CHAdeMO connec- physical layer, globally,” he explained. 6.0 tor, it is incompatible with our [dual-pur- Indicative of how aggressively the 9.4 pose connector] approach.” world is pursuing vehicle electrification, 0.3 4.8 Along with their work on the quick the IEC has received responses from engi- 1.9 charge, engineers working with the SAE neers in 17 countries who want to work 0.002 0.6 on the dual-purpose AC-DC connector on fast charging standards. “We have not yet held a formal meeting on DC charging are also thinking about what standards 4.2 7.2 10.2 might be needed to facilitate high-band- hardware. We’re just getting started. It width communications between the grid will take up to two years before we finalize 2008 2012 2020 and the vehicle. For example, while the requirements,” said Mr. Nieminski. ◆ Source: Bosch The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com July/August 2010, Page 3 The Company Profile... Sirius XM Radio

Thumbnail Sketch Pro Forma Revenue and EBITDA 2009 Revenue by Source Non-GAAP pro forma results from Sirius XM are used 2005 to 2010 CAGR: 28% 2009 Total: $2,527 million throughout this profile. Equipment, 2.0% in $ millions Headquarters: 1221 Avenue of the Advertising, 2.0% Other, 3.6% Americas, New York, NY 10020; Tel. 212- 584-5100; www.sirius.com 2009 Revenue: $2,527 million Subscribers, Net Loss: $441.3 million 92.4% Net Cash Provided by Operating 801 1,571 2,059 2,437 2,527 2,750 Activities: $433.8 million Working Capital Deficit: $1,144 million as 2005 2006 2007 2008 2009 2010 Satellite Radio Subscribers by Year of March 31, 2010 (Est.) 2003 to 2010 CAGR: 43.4% Long-Term Debt: $3,147 million million Stockholders’ Equity: $152.0 million as of 19.9* Adjusted EBITDA 20 19.0 March 31, 2010 in $ millions 17.3 Market Capitalization: $3.75 billion as of 18.8 2005 (971) 15 July 23, 2010 2006 (679) 13.7 Largest Shareholder: Liberty Media Corp., 2007 (565) 10 9.2 with 40% of shares; General Motors and 2008 (136) American Honda are minor shareholders. 4.4 2009 463 5 Employees: 1,514 at year end 2009 2010 (est.) 575 1.6

Sales per Employee: $1.63 million 0 Product: up to 170 channels of music, 2003 2004 2005 2006 2007 2008 2009 2010 sports, news, talk and weather program- Sirius bought out rival XM Satellite *Company estimate ming broadcast coast to coast in the U.S. Radio in a $3.5 billion deal that received Subscribers: 19,527,448, as of June 30, final FCC approval in July 2008, 17 urban areas where tall buildings can block 2010, a 6% year over year increase months after the two companies first an- the satellite signal. Subscription Price: $12.95 per month plus nounced their intention to merge. XM Facing high development costs and no $1.98 music royalty fee shareholders received 4.6 shares of Sirius revenue for several years until they began 2010 Average Revenue per Subscriber: stock for each XM share they owned. broadcasting, neither company had ever $11.48 per month for the quarter ending Trading of XM stock was stopped on July shown a profit and both had accumulated March 31, 2010 28, 2008. Shares of the combined com- a significant amount of debt. As credit Churn Rate: In the second quarter of 2010, pany, now named Sirius XM Radio, are markets tightened in late 2008, after the just 1.8% of self-pay subscribers gave up traded on the NASDAQ under the sym- companies merged, Sirius XM was able to their subscriptions each month, down from bol SIRI. Both SDARS licenses are now refinance $1.25 billion of XM’s debt but 2.0% in the second quarter of 2009. held by the new entity. still had more than $1 billion coming due Although XM built up its subscriber in 2009, at a time when automotive sales Background base earlier than Sirius, at the time of the were falling fast and the company had In 1992 the United States Federal merger each had about nine million sub- agreed not to raise subscription prices as a Communications Commission (FCC) al- scribers. The Sirius satellite system con- condition of the FCC’s approval. located 25 MHz of the S-band, between sists of four orbiting satellites and 125 Close to declaring bankruptcy in Feb- 2,320 MHz and 2,345 MHz, for commer- terrestrial repeaters that transmit to Sirius ruary 2009, Sirius XM reached a $530 mil- cial satellite radio. Five years later, the satellite radio receivers. Sirius has a spare lion loan agreement with Liberty Media FCC auctioned two SDARS (satellite satellite in storage and another under con- that gave Liberty Media a 40% share of digital audio radio service) licenses to struction that is scheduled to be launched the company. Liberty Media Corporation broadcast in the S-band. One of those li- in the fourth quarter of 2011. owns a large collection of media, enter- censes was purchased by American Mo- The XM network consists of four orbit- tainment and communications ventures bile Radio Corp., which became XM ing satellites, two of which transmit XM including investments in QVC, Expedia, Satellite Radio; the other by Satellite CD signals while the other two serve as in- Starz Entertainment and the Atlanta Radio Inc., which became Sirius Satellite orbit spares, and more than 650 terrestrial Braves baseball team. Long term debt at Radio. XM, founded in 1992, launched its repeaters. XM plans to launch a fifth sat- the close of the first quarter 2010 was $3.1 first satellite in 2001; Sirius, founded in ellite in the fourth quarter of 2010. The billion. 1990, launched its first satellite in 2000. terrestrial repeaters improve reception in

Page 4, July/August 2010 The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com The Company Profile Continued

2009 Subscribers by Type Stockholders’ Equity (Deficit) by Year Sirius XM Penetration of U.S. Auto Sales 325.0 Total Subscribers Year-End 2009: 18,772,758 in $ millions percent 60 60 55 Paid promotional, 8.5 37.4 16.3% 50 44 (389.1) (792.7) 40 Self-pay, 32 83.7% 30 21 Note: Self-pay subscribers are those who pay for 20 their own subscriptions. Paid promotional subscribers 2005 2006 2007 2008 2009 are those with free trials whose subscriptions are 10 paid for by carmakers, who receive a discount from Note: Only 2008 and 2009 are pro forma results. 0 Sirius XM. 2005 - 2007 show stockholders’ equity in Sirius 2006 2007 2008 2009 2010 Satellite Radio. (Est.) 2009 Subscribers by Source Sirius XM Stock Price 7/08 - 7/10 After free trials, 47% of customers who Total Subscribers Year-End 2009: 18,772,758 bought vehicles with satellite radio receivers 3.0 became paying subscribers. Rental, 0.6% 2.5 Retail, 2.0 acquiring the music it broadcasts. In July 1.5 2009, Sirius XM added a music royalty fee OEM, 58.2% 41.2% 1.0 of $1.98 per month. While the company 0.5 has made no decisions on future pricing, it 0.0 is reasonable to expect that it will raise 7/08 10/08 1/09 4/09 7/09 10/09 1/10 4/10 7/10 subscription prices after July 2011. Source: BigCharts.com Post-Merger Integration All XM and Sirius radio receivers are Once the merger of XM and Sirius was and XM channels that was mandated by created equal. They are built to spec using approved, the company turned its atten- the FCC as a condition of the merger. chipsets designed by Sirius or XM. “We tion to integrating the day to day opera- The integration of the two companies’ put every manufacturer’s satellite radios tions of the two organizations, eliminating satellite fleets won’t be complete for the through type approval to make sure it redundancies and rationalizing their pro- foreseeable future, because the company meets our specs,” explained Steve Cook, gramming. says it expects to maintain both XM’s and group vice president and general manager In a fourth quarter 2009 conference Sirius’ satellite broadcasting infrastructure of Sirius XM’s automotive division. call with analysts, Sirius XM CEO, Mel “for years to come.” Shutting down one or “Whether it’s made by Panasonic or Karmazin, said: “The merger provided sig- the other system would quickly obsolete Harman Becker, we don’t see any differ- nificant cost synergies in our fixed cost nine million receivers, which would have ence in the way they process the satellite base, which consequently allowed us to to be replaced at considerable expense. radio signals.” reach scale more quickly than others. Our Sirius XM declined to respond to a re- The satellite radio chipsets used in fixed cost base dropped nearly $350 mil- cent report from Strategy Analytics that Sirius and XM receivers are sourced from lion since 2007. This fact has allowed the OEMs had been notified by the company two companies: STMicroelectronics, the combined company to increase pro forma that the Sirius platform would be termi- primary supplier, and Analog Devices. adjusted income from operations in 2009 nated by 2016, and that they must all plan by nearly $600 million in one year and by to provide only the XM platform. How- Connection with Carmakers over $1 billion over two years.” ever, the company’s stated plans for future Sirius XM Radio’s primary means of Of the more than 130 channels cur- satellite launches do not seem to support distributing satellite radios and acquiring rently available on either the XM plat- that transition. Sirius XM has scheduled a new subscribers is through the sale or form or the Sirius platform, 106 are 2011 launch of a new Sirius satellite and a lease of new vehicles. According to com- common to both. By adding the Best of third quarter 2010 launch of a new XM pany estimates, subscribers generated XM package for $4 more per month, satellite. Each has an expected life of 13 through automotive OEMs account for Sirius subscribers can receive a selection to 15 years. 58% of the total subscriber base. The of popular XM programming. Likewise, As part of its merger agreement with company says it has agreements with ev- XM subscribers can receive a selection of the FCC, Sirius XM agreed not to raise ery major automaker to offer either Sirius Sirius channels by subscribing to the Best subscription prices beyond the basic or XM satellite radios as factory-installed of Sirius. This “best of” offering nearly monthly price of $12.95 until July 28, equipment in their vehicles sold in the eliminates any demand for the interoper- 2011. The FCC did agree that the com- United States. Most carmakers pay for able radio capable of playing both Sirius pany could pass through cost increases for continued on following page The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com July/August 2010, Page 5 Sirius XM Radio trial subscriptions at a reduced rate. In the present unavailability of factory-in- return, some receive a commission for These vehicle brands install Sirius XM stalled smartphone connectivity. Arbitron subscribers who convert to self-pay status. radios in 100% of vehicles sold in the U.S. has estimated the U.S. total average Sirius XM has agreements with many Listed alphabetically weekly audience for online radio at 42 major carmakers to be informed when, Acura million (17% of people12 years of age or and to whom, a certified pre-owned ve- Audi older), most of whom listen at home or hicle equipped with a satellite radio is Buick work, compared with Sirius XM’s weekly sold, so that customer can be offered a Cadillac audience, which Arbitron estimates to be satellite radio subscription. Sirius XM also GMC 35 million mostly in-car listeners. has agreements (negotiated by XM Radio) Hyundai AM and FM broadcast music, however, to make bandwidth available to Honda Infiniti is still the dominant in-car audio enter- and to OnStar for telematics data trans- Jaguar tainment. Ninety-two percent of Ameri- missions. Kia cans over the age of 12 have access to In the second quarter of 2010, the per- Lexus AM/FM radio. A Nielsen Company study centage of customers who converted their Lincoln (except Town Car fleet vehicles) published in October 2009 found that free trial subscriptions to paid subscrip- AM/FM broadcast radio captured 74.2% tions was 46.7%, up significantly from access to online radio, 28% use or own an of the listening time of a representative 44.3% in the second quarter of 2009. For iPod, and 23% use or own an MP3 player sample of in-car listeners; satellite radio the full year 2009, 55% of all new vehicles other than an iPod. While just 9% of accounted for just 5.5% of listening min- sold in the U.S. were equipped with satel- Americans have BlackBerries and 7% utes. lite radios. Sirius XM says it is on target to have iPhones, the use of these and other It should be pointed out that not all increase the penetration of satellite radios smartphones is accelerating rapidly. listeners yield the same amount of rev- installed in new vehicles to 60% in 2010. Most satellite radio listening happens enue for broadcasters, according to Sirius Already many premium car brands sold in in the car, but carmakers have been quick XM. In 2009, each Sirius XM listener ac- the U.S. and even non-premium brands to respond to consumer demand for por- counted for $71 in revenue; a terrestrial such as Hyundai and Kia have 100% pen- table device connectivity in their cars, radio listener accounted for between $10 etration of satellite radio receivers. (See which means increased competition for and $20; and Internet radio listeners each the list in column two.) Sirius XM. Most carmakers already pro- delivered about $1.25. vide input jacks to play MP3 devices on Competition the audio system, but Ford and BMW will Satellite Radio’s Strengths Competition among providers of audio be among the first to offer smartphone Sirius XM Radio has two main advan- entertainment is more intense than ever. operability through the vehicle’s controls, tages over AM/FM radio, including HD When XM and Sirius satellites were beginning in 2011. All major carmakers versions of AM/FM radio: Sirius XM launched in 2000-2001, AM/FM radio will follow suit soon afterward. broadcasts are available coast to coast, and CDs were the main competition. By Smartphones will not only be able to which eliminates the problem of lost sig- 2007, when XM and Sirius applied for play back stored music, podcasts and other nal as you drive out of an FM station’s permission from the FCC to merge, they audio programming on the vehicle’s audio range; and most Sirius XM programming stated that their competition in the mar- system, but they will also be able to is commercial free. ket for audio entertainment services in- stream Internet radio to the vehicle. When comparing satellite radio to cluded not only terrestrial radio and CD One knock on Internet radio is its cost. Internet radio streamed to the car, Mr. players, but HD Radio, Internet radio, While access to sites such as Pandora are Cook noted two more advantages of Sirius iPods and other MP3 players, and mobile free, smartphone data plan costs could be XM. “The first is that we have very high phones as well. These competitors give going up. New iPhone users will soon quality reception in the vehicle. That is potential satellite radio subscribers attrac- have to pay AT&T $25 per month to not always the case with trying to stream tive alternatives to paying nearly $15 per download up to two gigabytes of data, Internet radio over today’s 3G networks. month for in-car entertainment. about enough for 400 songs or nearly 30 Wireless networks were designed for voice Only a small minority of Americans hours of music. That is considerably more traffic, not music. You get dropouts; the today listen to satellite radio program- expensive than satellite radio, although listening experience is very inconsistent.” ming; other audio entertainment plat- smartphones certainly provide additional Sirius doesn’t specify the bit rate or objec- forms and devices are much more popular. functionality. tify in any way the sound quality of its According to data provided by Arbitron According to the same Arbitron/ radio broadcasts. and Edison Research, only 12% of Ameri- Edison Research study mentioned above, Another advantage, said Mr. Cook, is cans 12 years of age and older own or use “Six percent of mobile phone owners have satellite radio’s ease of use. “Changing sat- a satellite radio, whereas 64% have broad- already streamed audio from their phones ellite radio channels is much easier than band Internet access, 52% say they have and played it through their car,” despite changing Internet radio programs. On Page 6, July/August 2010 The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com The Company Profile Continued

and download it to their car at a later FCC Approved Merging XM and Sirius with Conditions date. When the Federal Communications company from XM and Sirius channels for Commission (FCC) first issued the only two $16.99 per month; a “mostly music” (or Data Services satellite broadcast licenses in 1997, it ruled sports, news or talk) package for $9.99 While nearly all of Sirius XM’s revenue that one licensee could not acquire control per month for each genre; “family will continue to come from its lineup of of the other licensee. On July 25, 2008, friendly” packages for $11.95 per month music, news and talk radio channels, the after 17 months of consideration, the FCC for either XM or Sirius, or $14.99 per company has been adding a number of approved the merger of XM and Sirius, month for combined programs from both other services to its product line. For ex- deciding the merger would serve the public platforms. ample, Sirius Backseat TV is available as a interest if the following “voluntary commit- ◆ Make 4% of the channels available to factory-installed option on select ments” by the combined company were Qualified Entities (minority-owned Chrysler, Dodge and Jeep models, and met. companies) and 4% to educational or through aftermarket retailers. ◆ Cap subscription prices at $12.95 per informational programming. Sirius XM also offers a number of month for 36 months, and after 30 ◆ Offer consumers interoperable receivers telematics-like services that are useful to months the FCC will seek public within nine months. people in their vehicles. Sirius Traffic pro- comment on whether or not the cap ◆ No exclusive manufacturing agreements; vides real-time traffic flow, accident alerts should be extended or modified. make IP available to any device manufac- and construction related detours or delays ◆ Within three months following the merger, turer to develop satellite receivers. to vehicles with navigation systems that offer consumers alternative program- ◆ Provide service to Puerto Rico via have been adapted to present the informa- ming packages including: an “à la carte” terrestrial repeaters. tion. The traffic flow feature costs $3.99 option; “best of” packages that combine ◆ No localized programming, advertising or per month. programming selected by the new blocking local sports broadcasts. Beginning with the 2009 model year, all Ford vehicles equipped with its Next Generation Navigation System received Sirius XM you can easily and safely hop eral models of Blackberry and Android six months of Sirius Radio service and six from a commercial-free music channel to mobile devices. Limited plans with 20 to months of Sirius Travel Link. Travel Link a major league baseball game, right over 25 channels of Sirius XM content are provides a suite of services that includes to an interview with Oprah Winfrey. You available to mobile phone users through real-time traffic, weather, fuel prices, can’t do that with Internet radio, and in AT&T, Alltel, Sprint and RIM. sports scores and movie listings. At the the vehicle simplicity and ease of use is conclusion of the six-month trial, Travel king.” 4G Link subscribers pay $1.99 per month on Acknowledging the growing strength Designed for data communications, 4G top of the cost of a Sirius XM radio sub- of the competition, Sirius XM notes in its high bandwidth, low latency cell-phone scription. 2009 10-K: “The past few years have seen networks, when they emerge over the As a way to distinguish itself from a steady increase in the audio quality of next several years, will present more com- smartphone apps, Sirius XM will concen- Internet radio streams and in the amount petition to Sirius XM satellite radio trate on services like traffic flow, gas of audio content available via the Web, broadcasts, since they will improve the prices, weather, sports and stock updates. resulting in a steady increase in Internet quality of audio and video downloads for “We are trying to focus on data services radio audience metrics. We expect that smartphone users. that have relevance in the vehicle and improvements from higher bandwidths Even so, Mr. Cook is looking forward need to be updated continuously. That is and wider programming selection are to the rollout of 4G and intends to take so much easier than trying to call up a bit likely to continue making Internet radio advantage of 4G to enhance the services of information on your smartphone,” Mr. an increasingly significant competitor in Sirius XM offers. “Our competition con- Cook noted. the near future.” tinues to evolve, and 4G will ramp up Sirius XM expects the popularity of its The company has begun participating the potential for even more audio com- data services to increase as more in the Internet radio market. In 2009 it petitors, but we also plan to use the carmakers are installing large displays, launched its Premium Online service, technology to make our service more even in vehicles without navigation. through which subscribers can access compelling,” he said. “Data services is clearly a growth area for more than 120 channels for an additional Sirius XM has not yet announced any us,” said Mr. Cook, who suggested that $2.99 per month. Last year Sirius XM re- specific service enhancements in the other services will be introduced over the leased an app for the iPhone and iPod works. One possible application of 4G next several years. One example of future Touch that lets subscribers access the on- would be to time-shift a specific program. services the company is working on is pro- line content through those devices. In Subscribers could request a program that viding airline flight information and air- 2010 it added similar applications for sev- was broadcast at an inconvenient time port delays. ◆ The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com July/August 2010, Page 7 Alpine Electronics, Fiscal Year 2010 Fiscal year 2010 ended March 31, 2010. fewer consumers were spending on high tronics for Automotive) organization, al- FY 2010 Consolidated Sales: ¥168,586 end audio-system options or aftermarket lows smartphone-based applications to be million ($1.8 billion); Audio Products system upgrades. accessed and controlled through the Segment sales accounted for 42% of total Sales in the Audio Products Segment vehicle’s infotainment system. At the sales; Information and Communication were ¥70.4 billion, down 20.3% com- 2010 Consumer Electronics Show, Alpine Equipment, 58%. pared with the previous year, due in part launched its IDA-X305S head unit, Change from FY 2009: down 14.3% to a shift in consumer demand away from which can stream Pandora Internet radio FY 2010 Net Loss: ¥1.25 billion, com- traditional CD players toward infotain- in the car using an app on the driver’s pared with a net loss of ¥9.3 billion the ment systems according to Alpine. Those iPhone. prior year integrated systems are sold through In FY 2010, 82% of Alpine’s sales were Outlook for FY 2011: Sales are expected Alpine’s Information and Communica- outside the domestic Japanese market. to increase by 6.8%, to ¥180,000 million tion Equipment Segment. Sales in that That trend is likely to continue in fiscal ($2 billion). Alpine is forecasting a 2.5% segment declined as well, but to a lesser 2011 as Alpine introduces a line of new, net profit margin. Audio Products sales degree, 9.4%. Alpine noted that naviga- cost-effective products designed for small are expected to decrease slightly in FY tion sales in Europe and the United and mid-sized cars in emerging markets. 2011, by less than 1%. Information and States were tempered by the growing pen- The company will emphasize R&D in- Communication Equipment sales will in- etration of portable navigation devices vestment in car information communica- crease 12.1%, according to Alpine. and smartphones with navigation fea- tions, especially navigation equipment, Alpine says a shift in demand toward tures. where it sees market opportunities. Al- more compact cars, as a result of both Alpine has partnered with Nokia and pine will also invest in lightweight, en- government incentives to consumers and NAVTEQ to incorporate Terminal Mode ergy-efficient, inexpensive products for increased vehicle sales in emerging mar- technology in future Alpine infotainment hybrid and electric vehicles, and in up- kets, was a factor in its sales decline. It systems. Terminal Mode, developed by grading its line of driver-assist products also noted that because of the recession Nokia and the CE4A (Consumer Elec- such as rearview camera systems. ◆ Convergence 2010, Be There If you are a player, or would like to be a everything have to be built into the ve- keynote address on Tuesday morning by player, in the global automotive electron- hicle. We can also embrace what is Derrick Kuzak, group vice president, glo- ics industry, the place to be on October brought into the vehicle, such as bal product development, Ford Motor 19-20, 2010 is Cobo Hall, Detroit. If you smartphones, and what is beamed in from Company. Mr. Kuzak, who is a key archi- can afford to participate in only a couple the cloud and elsewhere. That is changing tect of Ford’s business turnaround, was for of automotive electronics conferences the architecture, technology and business a time Ford’s top electrical engineer—he each year, this is one you shouldn’t miss. assumptions.” is one of us. Ford and Microsoft, with plenty of The Blue Ribbon Panel will address For more please visit www.sae.org/con- support from the Society of Automotive the implications of this extension of auto- vergence. ◆ Engineers, have planned a conference motive electronics beyond the vehicle’s that promises to inform and provide ecosystem in a plenary session on Tuesday, The Carmakers Speak Panelists ample opportunity to network with the October 19, at 10:00 a.m. The subject will ◆ movers and shakers. Partnerships Driving be further explored in a technical session Jim Buczkowski, director of electrical and Smart Mobility is the conference theme, Tuesday afternoon. Other technical ses- electronics systems engineering, Ford ◆ inspired no doubt by the partnership be- sions will generously cover vehicle electri- Micky Bly, executive director of global tween Ford and Microsoft that brought us fication, partnerships with academia, electrical systems, hybrids, electric vehicles the Ford Sync connectivity platform. vehicle safety, systems engineering and and batteries, GM ◆ “Every technical session has an under- creating value through collaborations. Marc Duval-Destin, director for research lying theme of partnership associated with In a plenary session on Wednesday and advanced engineering, PSA ◆ it,” noted K. Venkatesh Prasad, senior morning, I will moderate the Carmakers Kristen Tabar, general manager, Elec- technical leader, electrical and electronic Speak Panel, which will feature top elec- tronics, Toyota Motor Engineering & system research and advanced engineering trical engineers from seven of the world’s Manufacturing ◆ at Ford. Prasad is part of the team of Ford major carmakers. I will ask them about Alan Amici, head of electrical/electronics and Microsoft executives who have the challenges they face, about standards, engineering, Chrysler ◆ planned Convergence 2010. how suppliers can help, about electrifica- Yoshio Suzuki, senior chief engineer, “Another big emphasis this year is that tion, electronics reliability and where they Honda R&D ◆ consumer electronics devices have arrived think the next great automotive electron- Elmar Frickenstein, executive vice presi- in a very big way and many of the tradi- ics innovations will come from. dent of electrics/electronics and driving tional business models are being chal- Another Convergence 2010 highlight experience environment, BMW Group lenged,” said Prasad. “No longer does I am very much looking forward to is the Page 8, July/August 2010 The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com