Live from CES 2016 – What We Know So Far, What You Need To Know

Live from Las Vegas! On the eve before the official start of CES, we have already seen a number of key automotive technology announcements setting the stage for a huge week in connected car, autonomy, as well as significant increases in alternative mobility solutions challenging traditional private vehicle ownership models as we know them today. In the hopes of putting into context the myriad of breaking news, we have bucketed them into a few key themes to support your upcoming meetings, or for those of you following along from home.

Rapidly Increasing Automotive OEM Bets on Mobility Solutions

Right out of the gate, General Motors announced an eye-popping $500 million investment in ride-sharing #2 Lyft (one half of Lyft’s latest $1B financing round). GM will take a board seat, and will work to ensure deployment of GM vehicles into the hands of Lyft drivers. Secondly, GM announced plans to further collaborate with Lyft on increasingly autonomous vehicle fleets, taking a page from rival Uber’s increasing strategy to invest in greater autonomy. With Sidecar out of the picture in the U.S., this is setting up to be a 2-player race (with numerous partnerships also recently announced in an effort to gain global scale, especially in Asia). This week Audi also announced a $28M investment in Silvercar, a rental service that only provides silver Audis to consumers. The Austin-based startup allows for easy rental service through a mobile app and car unlock via scanning a QR code. And at the Ford press conference followed by a lunch with key analysts including SBD, CEO Mark Fields further reiterated Ford’s continued commitment to mobility overall, yet stopped short of addressing rampant industry speculation on a broader Ford + Google vehicle solution.

Faraday Future's Exciting/Curious Unveil

We unfortunately only know a LITTLE bit more about the mysterious China-backed Faraday Future than we knew this weekend. Faraday unveiled the FFZero1, a single-seat all-electric concept, which according to Faraday, can produce as much as 1,000 horsepower. While frustrating to some that more specifics were not offered toward a “production” vehicle (including hints at a value-added connected services model), the fact that a start-up could gather such interest provides a playbook in innovative marketing for any major automaker to consider. Between the secrecy, drip drip digital news approach (including a leaked photo 24 hours before the actual press conference), and bold predictions about the future, this is a company you want to know more about, and want to root for. A long way to go for pure disruption (and remember that Tesla took ~10 years to launch the Model S from initial incorporation), give them at least a B+ for creating the buzz to stand-out while everyone is rushing to Vegas to do the same.

Apple CarPlay and Google Android Auto Phone Projection Solutions Gain Volume Automakers

Yesterday, both Ford and FCA announced full support for CarPlay and Android Auto and widespread deployment across their next generation Infotainment systems. All MY2017 Ford models with SYNC 3 on a go forward basis will include both phone projection solutions, and MY2016 models will be upgradeable later this year. Fiat Chrysler also announced full support for both platforms, likely coming on vehicles with FCA’s new Uconnect system expected to launch later this year. While no longer a differentiator, the roll-out of these two OEMs (following previous roll-outs from volume brands GM, VW, and Hyundai) will ensure both platforms have significant scale and volume to attract developers and gain broad consumer awareness (and likely adoption).       

Other Automakers (Besides Toyota) Considering Ford’s SmartDeviceLink

On the flip side, Toyota announced that it will officially adopt SmartDeviceLink (SDL) in its next-generation systems, leveraging Ford’s open-source standard for phone projection and alternative to Apple and Google (besides MirrorLink). While Toyota grabbed headlines for bucking major C.E. (“Anti-Apple”), Ford announced that other automakers are also considering SDL including PSA, Honda, Mazda, and Subaru among others. While Ford is committed to the Big 2 Smartphone replication platforms, establishing scale via an OEM-guided alternative would certainly give automakers more negotiating power. Two major OEMs (with potentially more to follow) provide meaningful scale in the same developer race Apple and Google have dominated to date.

Microsoft Back in the Game!

While Ford’s SYNC 2 (MyFord Touch) provided a setback to Microsoft’s Connected Car ambitions, we continue to see progress from Redmond especially in deployment of its Azure Cloud solutions supporting OEM and Tier 1 service rollouts. Last year, Ford disclosed that Microsoft Azure would be the IT backbone of its soon to be launched SYNC Connect services (leveraging an embedded modem and Cloud architecture for the first time in a major way). This week, Microsoft announced winning the Nissan Europe Telematics business for providing services to the Nissan Leaf as well as Infiniti vehicles. And earlier this morning, Harman also unveiled a strategic partnership with Microsoft, showing off automotive-modified Microsoft Office 365 functionality (to make calls and calendaring easier amongst others), as well as live in-vehicle access to an in-vehicle version of Microsoft Cortana, the Virtual Assistant receiving numerous industry accolades overall.

Race for Object Detection & Deep Learning

MobileEye (among others) has set the automotive world on fire the past two years, gaining significant market share with leading object detection hardware and algorithms which are a critical lynchpin to increasingly autonomous cars. This week, two heavyweights made their case for “deep learning” (at low latency) solutions to significantly improve object detection options for automakers. QUALCOMM announced their new automotive-grade Snapdragon 820A equipped with Zeroth, which includes a deep learning algorithm able to analyze and classify images and sounds. QUALCOMM demonstrated how it can recognize specific objects like people, animals, or hand gestures. The SoC also comes paired with a QUALCOMM LTE modem capable of 600 mbps download and 150 mbps upload. And not be outdone, yesterday’s NVIDIA press conference which SBD attended featured the unveiling of the Drive PX 2 supercomputer. NVIDIA announced that the PX 2 harnessed the computing power of 150 Apple Macbooks, had a water-cooled solution ready for automakers today which fits neatly into the trunk, and announced Volvo as their first customer. NVIDIA further shared a vision for a common reference platform between all cars within an OEM fleet and the Cloud – meaning that vehicles would leave the dealership lot pre-tested, and if one vehicle “learned” from an anomaly in the field, it would send back improvements for all cars in the vehicle fleet to improve. A major step forward if costs, and complexity, can be managed.

Other Key Trends from Today’s TU-Automotive Consumer Telematics Show (CTS)

• SBD brought to life the voice of the customer via partnering with Morpace on a dynamic 6-person consumer panel on-stage, gauging their desire and willingness to accept greater autonomy, integration of their vehicle with the broader IoT, as well as allowing the audience to hear consumer’s perspectives on “can’t miss” features. The “C” in CES is there for a reason!
• Most panelists at today’s show agreed that the technology for increasingly autonomous vehicles is ‘almost there’ (e.g. LIDAR becoming cheaper, etc.). However, HMI is of greater importance, which needs to offer a consistent and clear user experience – and that customer acceptance is the biggest issue which needs to be done gradually.
• Automotive cybersecurity continues to evolve quickly (including Harman’s purchase of automotive security player Towersec to further differentiate its offerings as fully secure), and today’s panelists suggested that because of the challenges of 2015, almost all automakers agree cybersecurity is now a critical issue. Several OEMs are aiming for a level of security that would be considered unacceptable for many automotive applications, and therefore choices must be made.
• Expert panelists spoke further on vehicle data challenges – numerous applications that could be implemented in the car have not vs. Smartphone Apps that fully use the sensors and data available. Various approaches to securely share data between automakers were further discussed, but remain unsolved.

What did we miss (I know, we just couldn't cover everything and call it a summary)? Look for more updates this week, and for those here in Las Vegas hope you are enjoying an exciting event.