The ongoing evolution of mobile technologies from 4G to 5G provides the cellular market with a leg up in terms of competing in the connected car arena.
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Electronic and electrical innovations in automotive information processing, communications, vehicle control and powertrain technologies will be as dramatic over the next decade as was the enormous advancement in smartphone technologies and consumer adoption for these over the last decade. The supply chain in semiconductors, electronic hardware assemblies and software is converging between the two verticals with significant consolidation among suppliers. The wide scope and large scale demand for leading technology platforms such as 4G and “5G” will provide these and their suppliers with significant competitive advantages over those focused exclusively on automotive.
Déjà vu 2007
The revolutionary Apple iPhone was first announced exactly 10 years ago. While Apple was already a master in personal computing and entertainment devices with Macs and iPods, the company was a new market entrant in cellular. The latter’s technologies were at last ripening, which enabled Apple to combine technologies from all the above in creation of this first, highly appealing, modern smartphone. Hitherto, mobile technologies were not up to muster: with ghastly wireless application protocol browsers and only monochrome displays until around 2003, no multitouch and anemic application processors running awkward mobile operating systems and applications. Even the first iPhone model was not much use for anything other than voice, text and offline activities such as listening to iTunes unless it was connected to Wi-Fi, but this was a great way to train its users and make them yearn for more ubiquitous high-speed connections.
Cellular data performance in phones and networks continued to be deficient for another a year or so until 3G iPhones and Android smartphones were introduced beginning in 2008. Improvements over this last decade have been enormous, including 1,000-fold increases in data speeds, much greater pixel densities and a lot faster applications processing with cost reductions driven by Moore’s Law effects.
Similarly, the stars are now aligning with another mobile revolution: in cars. Change is being driven by technological improvements on several fronts, consumer desire to be electronically informed and entertained, demands for improved safety and lower emissions. Suppliers are rising to the challenges and opportunities in their quest for market growth, product differentiation and higher profit margins.
Propelling smarter, better connected, safer and greener cars
In this new revolution, there are many ways electronic and electrical innovations will be applied over the next decade. All the specific functions and technologies are far too numerous to list in this short article. However, here are some broad categorizations with examples of technology supply and demand factors from consumers and governments:
Infotainment
All the capabilities found on smartphones, in living rooms and home offices are coming to cars including navigation systems with traffic congestion updates for the driver and backseat entertainment for passengers.
Safety and comfort
Includes stability control, collision avoidance and self-driving capabilities. Driving is a lot safer than it used to be following the introduction of seatbelts, collapsing steering columns, airbags and highway guardrails. Nevertheless, nearly 1.3 million people die on the roads each year worldwide. Road crashes are the leading cause of death among young people aged 15-29, and the second leading cause of death worldwide among young people ages 5-14. Technology will never eliminate road traffic accidents, but there is still significant scope for improvement and there is increasing demand for legislative solutions. Drivers could benefit enormously with the opportunity to rest or do other work if cars could drive themselves.
Powertrain, control and environment
This includes engine systems, electric and hybrid traction including battery management and wireless charging. As the number of cars in use worldwide increases, emissions of carbon dioxide are significantly contributing to climate change while nitrogen oxides and particulates are major polluters, particularly in urban areas. Three million deaths per year are linked to exposure to outdoor air pollution. New technologies are making cars cleaner, more energy efficient and cheaper to run. Regulators are also demanding these are applied with ever-lower emissions limits.
As cars include more electronic and electrical systems, it makes sense for these to be better coordinated and integrated, particularly in head-unit controllers and in the user interfaces with dashboards, heads-up displays and other controls. Rather than having multiple systems with separate or incompatible internal wired and external wireless connectivity – for example, one protocol for infotainment access and another one for vehicle-to-x collision avoidance – it might make better sense to use a common technology such as cellular. This will have profound effects on how automotive technologies and systems are developed, and significantly affect who and how technologies, components and systems are manufactured and supplied.
Changes in the supply chain for the powertrain
Electronic and electrical systems including associated software are increasingly significant and can account for 30% of a vehicle’s cost. In 2013, the automotive semiconductor market was worth $26.5 billion and increasing at a 6% compound annual growth rate, according to IHS Markit. The cost structure in the automotive sector, including manufacturing and with very different servicing requirements, is also changing most significantly with the switch to hybrid and electric vehicles.
Automotive products must typically be designed and manufactured to more exacting requirements than consumer products, but there are major economies of scale in development of technologies and in production that overlap with other verticals including elsewhere in the “internet of things” and in smartphones. For example, systems typically need to work over extreme temperature ranges and longer service lives. However, Nvidia and others are exploiting their capabilities in application and graphics processing to repurpose their offerings for vehicles. Intel is already offering its Atom processors for automotive applications processing while also buying its way more deeply into the sector by acquiring a 15% share in mapping company Here.
The above convergence is occurring concurrently with consolidation across the semiconductor sector and within the automotive electronics in general. NXP acquired Freescale to become the leading provider of automotive semiconductors. In Qualcomm’s acquisition of NXP, the combined entity will be able to exploit significant technological overlaps between the technology requirements in smartphones and vehicles while providing Qualcomm the expertise and market access that can be a significant barrier to success in the automotive sector. To similar ends, Samsung is acquiring tier-one automotive components supplier Harman.
Mobile is now the biggest technology platform, and cellular – including upcoming “5G” – has automotive in its sights as one of its most promising targets for further development and growth. Ericsson, Orange and car manufacturer PSA Group have signed a partnership agreement to conduct 5G technology pilots for automotive applications. Android and iOS desktops and their apps are popular and expected on car console displays as they are on smartphones and tablets. Apple reportedly has ambitions to be a full-blown car manufacturer producing electrical vehicles with autonomous driving. Cars combine needs for enhanced mobile broadband with ultra-reliable and low-latency connections, even if only around 90 million new vehicles per year, versus 1.5 billion smartphones, does not represent an opportunity for “massive IoT” – the third leg of the 5G stool. Other pure-play automotive suppliers and technologies will have a tough competitive battle in the path of mobile players as they evolve from 4G and 5G.
Keith Mallinson is a leading industry analyst, commercial consultant and testifying expert witness. Solving business problems in wireless and mobile communications, he founded consulting firm WiseHarbor in 2007.
