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Between Waze and a Thin Hard Place

Between Waze and a Thin Hard Place
by Roger C. Lanctot on 10-27-2016 at 4:00 pm

 Car makers, semiconductor companies and wireless carriers are all excited these days about creating cars that can drive themselves. Billions of dollars are being spent on acquisitions and investments in companies and technologies that can make this happen. But there is a fly in the ointment by the name of Waze.

To create cars capable of automated driving, car makers and their supplier partners are having to replicate the functional capacities of the human brain and nervous system including vision systems and networks. In essence, the industry is being forced to create something we might regard as a “thick client” – a sentient car with sufficient storage and processing power to deliver a safe and reliable automated driving experience.

The alternative to the thick client is the “thin client” – in this case a smartphone. The thin client gets the job done by accessing off-board (cloud) resources to facilitate its decision-making. The best search and speech recognition solutions in cars today are either entirely cloud-based or hybrid on-board/off-board systems.

When Audi, BMW and Daimler came together to acquire the map data company, HERE, from Nokia, the intent was clearly to build an automated driving capability upon the foundation of HERE maps. If cars were going to drive themselves sooner or later, they’d need maps on-board and HERE was the big dog of embedded maps in cars.

Much was made at the time of the desire of car manufacturers to preserve their independence from Google and Apple and any other tech industry interlopers. So the HERE acquisition was something of a turf war over ownership of the customer relationship and the technology going into the cars.

The key differentiation between HERE as a source of map data and Google – aside from the ever-present Googlian invasion of privacy – was the fact that HERE actually provides a data set that resides in the car. Arch-rival TomTom also provides a map data set to its significantly smaller customer base of car makers. Google does not provide an on-board map, although it enables chunks of map data to be downloaded on an ad hoc basis.

Much has been made in the press lately of the onset of Apple’s CarPlay and Alphabet’s Android Auto smartphone integrations for cars. The hullabaloo over these increasingly widespread systems in new cars and the aftermarket revolves around the fact that they are creating headaches for car dealers and consumers (according to J.D. Power and Consumer Reports) even as they proliferate and begin to make smartphone navigation projection from the phone into the dashboard screen a reality.

But whether you snap your phone into a mount on your dashboard or connect it to your on-board infotainment system, the prevalence of smartphone navigation generally and Waze in particular is putting pressure on the pricing of built-in navigation systems. More importantly, it will ultimately cause consumers to reconsider buying the built-in navigation system if the price delta is too great.

As car makers lay the groundwork to enable automated driving the need for an on-board map will become increasingly imperative. In fact, the need for an up-to-date on-board map will become more important than ever.

If consumers abandon the idea of on-board navigation in favor of the good enough navigation experience of Waze on a smartphone – the progress toward automated driving will be severely impeded. And the risk is real because Waze is not only good enough navigation, for many it is becoming the preferred source of traffic information and, a dirty little secret, speed traps – or safety zones, as they are euphemistically described in Europe. Some Waze users won’t go anywhere without the app.

Car makers like BMW and Daimler are taking steps to provide for real-time hazard notifications and incremental map updates to match Waze’s perceived advantages. But the challenge extends beyond Waze. Toyota launched an OpenStreetMaps-based projectible smartphone navigation app in the U.S. last year. Apple is steadily replacing TomTom’s maps with OSM in dozens of countries around the world.

Meanwhile, Waze availability in dashboards continues to advance. Ford is expected to offer Waze via its SDLink app integration and Waze is also accessible via MirrorLink.

Waze’s viral marketing and crowd-sourced platform represent a formidable pothole on the path to automated driving for the masses. There are steps auto makers can take to preserve their long-term automation objectives. I will explore this topic in more detail in my keynote at next week’s TU-Automotive Europe event in Munich –

Smartphones have given us so much. They have the power to save time, fuel and lives on the road – as long as drivers don’t get distracted. They can enable entirely new business models and market opportunities. But good enough solutions don’t cut it when you are trying to transform an industry. Self-driving cars will need an on-board map to get them through thick and thin.

Roger C. Lanctot is Associate Director in the Global Automotive Practice at Strategy Analytics. More details about Strategy Analytics can be found here:

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