connected car - partnering for value · adoption success comes from clear benefits, standard...
TRANSCRIPT
IBSG - 1© 2005 Cisco Systems, Inc. All rights reserved.
CONNECTED CAR - PARTNERING FOR VALUE
A Cisco Perspective
Marc Girardot - IBSGDirector EMEAAutomotive Lead
Geneva, March 1rst , 2005
1
© 2005 Cisco Systems, Inc. All rights reserved. IBSG - 2Marc Girardot – Automotive Lead – [email protected]
IT’S ALL ABOUT ADOPTION !
Mobile Phone Adoption Internet Users
0
100
200
300
400
500
600
700
800
1990 1997 2000 2003
Mill
ions
of u
sers
Internet Adoption Airbag Adoption
Telematics Adoption
?0
100
200
300
400
500
600
700
800
2005 2010 2015 2020
Mill
ions
of v
ehic
les
0
100
200
300
400
500
600
700
800
900
1000
1990 1993 1996 1999 2002
Mill
ions
of A
irbag
s
Source: AutolivSource: Internetworldstats
• IP & Ethernet• Netscape, Microsoft• Access Information
• NHTSA agreement (87)• Autoliv, TRW, Takata• Saves lives
0
250
500
750
1000
1250
1500
1750
2000
1991 1995 1999 2003
Mill
ions
of u
sers
Source: ITU
• GSM standard• Nokia, Ericsson• Mobility
© 2005 Cisco Systems, Inc. All rights reserved. IBSG - 3Marc Girardot – Automotive Lead – [email protected]
ADOPTION SUCCESS COMES FROM CLEAR BENEFITS, STANDARD TECHNOLOGIES & ECOSYSTEM READINESS
CONNECTED CARSUCCESS FACTORS
WHAT SUCCESSWOULD LOOK LIKE
CustomerBuy-in
Infra-structure
Ready
OEMBuy-in
AlignedEco-
system Inter-operable
Secure
Scalable
Standardized
CostsEfficient
ClearBenefits
KEYSUCCESSFACTORS
ALIGNEDECOSYSTEM
VALUE
TECHNOLOGY
Connected CarIdeal Adoption Curve
0
100
200
300
400
500
600
700
800
2005 2010 2015 2020M
illio
ns o
f veh
icle
s
Source: Cisco IBSG analysis
IBSG - 4© 2005 Cisco Systems, Inc. All rights reserved.
WHERE IS THE CAPTURABLE VALUE?
© 2005 Cisco Systems, Inc. All rights reserved. IBSG - 5Marc Girardot – Automotive Lead – [email protected]
GLOBALINJURY BURDEN
GLOBAL ROAD MORTALITY
ROAD INJURIES AND FATALITIES ARE UNBEARABLE BOTH IN HUMAN AND FINANCIAL TERMS
Disability-adjustedLife Years Lost in 2002
7,1
4,3
10,0
3,6 4,6
8,9
0
2
4
6
8
10
12
Africa Americas South-East Asia
Europe MiddleEast
WesternPacific
Mill
ions
Source: WHO 2004, Global Burden Disease Project, OECD
38+ MillionDALYs
lost globally
OECD ROADMORTALITY
In OECD countries, cost of these fatalities
is estimated at
$450 Billion
Distribution of Global Injury Mortality by Cause
2002
Road Traffic 22,8%
Others 77,2%
Fatality ratesper 100,000 inhabitants
9,5
11
5,9
8,2
15,2
19
0 5 10 15 20
Australia
EU
GB
Japan
USA
Global
New technologies can reduce fatalities by 40%
OECD estimates
New technologies can reduce fatalities by 40%
OECD estimates
1,2M
© 2005 Cisco Systems, Inc. All rights reserved. IBSG - 6Marc Girardot – Automotive Lead – [email protected]
AND ROAD CONGESTION COSTS TO THE COMMUNITY AND THE ENVIRONMENT ARE ENORMOUS
• Average urban motorist in the US spends 46 hours per year in traffic and in EU countries around 66 hours per year (30% of their commute time);
• Congestion results in 11+ billion-hours of delay annually in the US and Japan
• Fuel consumption during congestions accounts for 1% of GDP; the average urban motorist produces 4.9 tons of carbon dioxide a year
• Time wasted in traffic in OECD countries accounts for 2% of total GDP;
• The impact of traffic congestion on the Tokyo economy is estimated at $50Bn;
CONGESTIONFACTS
CONGESTIONFINANCIAL COSTS
in Billion of Dollars
150 160
125
38
0
20
40
60
80
100
120
140
160
180
USA EU Japan SouthKorea
$810 Billionwaste in OECD
alone
Source: OECD, Texas Transportation Institute, US Dept. of transportation, Cisco analysis, TokyoMK, ePrinciples 2002
© 2005 Cisco Systems, Inc. All rights reserved. IBSG - 7Marc Girardot – Automotive Lead – [email protected]
HOWEVER DIRECT BENEFITS/SAVINGS TO THE AUTO SECTOR – REBATES & WARRANTY- ARE MORE LIMITED
GENERATION YHARDER TO SATISFY
GROWING AUTODIVERSITY
New AutoProduct Offerings
60 59 59
45 54 7572 91
111
0
50
100
150
200
250
2000 2002 2004
# of
mod
els
Variants
New based existing platforms
New Platforms
177204
245+15%+15%+20%+20%
GROWINGINSTALLED BASE
Motor VehicleInstalled Base
200
300
400
500
600
700
800
1980 2004
Mill
ions
of v
ehic
les
$15 Billionyearly warranty costs
-$60 Billion
in rebates
Sales SatisfactionStudy 2004
800
810
820
830
840
850
860
870
880
Under25
Years
35 - 39 50 - 54 65 orolder
Sat
isfa
ctio
n Sc
ore
Generation Y customerswill probably require
connectivity
Generation Y customerswill probably require
connectivity
Source: Anthony Downs, McKinsey, Deustche Bank, Detroit News, Cisco analysis, JD Power 2004 Survey
© 2005 Cisco Systems, Inc. All rights reserved. IBSG - 8Marc Girardot – Automotive Lead – [email protected]
AND DESPITE INTEREST FOR ENHANCED CAR COMMUNICATION ENABLED FEATURES, THERE’S LIMITED WILLINGNESS TO PAY FROM END-USERS
CONSUMER INTEREST
50%
66%
25%
17%
10% 25%
0% 20% 40% 60% 80%Percentage Respondents
18-24 years old interest In digital media/games on the road
Americans who wantnavigation systems
Surveyed individuals reporting desired infotainment functions available on car
Blue tooth availability in North America (% of OEMs)
Cars available with Rear Seat Entertainment
UNWILLINGNESS TO PAY
• Value-added services are limited to the developed world;
• Consumers bundle new technologies to overall price of the car;
• Relatively slow take-up of in-car GPS shows reluctance to pay;
• Mobile devices such iPods and mobile DVD players extend home entertainment at limited cost;
• Probably maximum monthly service subscription-fee can’t be above $10/m;
$10 Bnin added-value services,
$90 Bngames, video entertainment &
sportsSource: Telematics Research Group (TRG), PwC Global entertainment industry report, Cisco analysis
© 2005 Cisco Systems, Inc. All rights reserved. IBSG - 9Marc Girardot – Automotive Lead – [email protected]
TRAFFIC & SAFETY SERVICES SHOULD BE THE DRIVING FORCE OF CONNECTED CAR INITITIATIVES
CONNECTED CARVALUE* LANDSCAPE
Connected Safety
$ 450 Bn
Connected Real-time
Traffic$810Bn
WarrantyConnectedSolutions
$15Bn
LoyaltySolutions
$60Bn
ConsumerVA Services
$10Bn
Entertainment$90Bn
0
5
10
0 5 10Ease of Capture
Con
nect
ivity
Impa
ct
Source: Cisco IBSG analysis
+-
+
-
Note: * Number equals total waste or growth opportunitynot all can be captured by Connected Car
FOLLOWSFOLLOWS
FOCUS
IBSG - 10© 2005 Cisco Systems, Inc. All rights reserved.
INTERDEPENDENCIES OR THE NEED TO PARTNER
© 2005 Cisco Systems, Inc. All rights reserved. IBSG - 11Marc Girardot – Automotive Lead – [email protected]
CONNECTED CAR HAS SOME SPECIFIC ROADBLOCKS TIED TO INTERDEPENDENCIES
INNOVATION RISK FRAMEWORK
SPECIFICS ABOUTTELEMATICS
• Governments and emergency response eco-system need to be integrated;
• Emergency device suppliers coordinated with communications platform;
• Platform need partly to be crash-resistant and fully mobility compliant (hand-over…);
• Frequencies used need to be standardized internationally and made available in major countries;
• Communications infrastructure need to be multi-channel, pervasive on a territory and 100% reliable and secure;
• Car software must be 110% secure from outside or inside attacks, disturbance or false-manipulations;
• Car is an extension of the office or the home, thus all this will need be interoperable over time;
• Dealers will need to be trained to maintain and upgrade these platforms,
• Devices have different lifecycles than the car and thus need to be car-agnostic as well as robust and evolutive;
StrategyStrategy
Initial MarketTarget
Initial MarketTarget
Expectations for Success
Expectations for Success
OutcomesOutcomes
Inter-dependence
Risk
Inter-dependence
RiskInternal
RiskInternal
RiskIntegration
RiskIntegration
Risk
Source: Ron Adler, INSEAD
Total Pof success= πi (Pof successi)Total Pof success= πi (Pof successi)The more interdependencies, the higher
the chances of failure !The more interdependencies, the higher
the chances of failure !
© 2005 Cisco Systems, Inc. All rights reserved. IBSG - 12Marc Girardot – Automotive Lead – [email protected]
AREAS REQUIRE STANDARDIZATION AND FOCUSED COORDINATION FROM A LIMITED SET OF PARTNERS
INTERACTION & INTERDEPENDENCY RISK AREAS
SOLVING TELEMATICSBOTTLENECKS
• Car interaction with the Internet will require scalable and evolutive interface/security with car BUS CAN;
• Car-2-Car and Car-2-Infra-2-Car communications require standards in protocols as well as in technologies for road infrastructure;
• So-called seamless communications to and from the car will require to build and mutualizewireless infrastructures (notably in the countryside) for the car as well as a clearing-house process/ organization to enable access-roaming across different service providers and technologies.
Source: IBSG analysis
Car Network
Car-to-car Mesh Network
Internet
Real-timeTraffic
ConnectedSafety
Entertainment orVertical Solutions
Authorities (Gov, road…)
& Service providers
Communications& Security
TechnologyLeaders
OEMs & Tier1 Suppliers
IBSG - 13© 2005 Cisco Systems, Inc. All rights reserved.
PARTNERING WITH CISCO
© 2005 Cisco Systems, Inc. All rights reserved. IBSG - 14Marc Girardot – Automotive Lead – [email protected]
A NETWORK OF NETWORKS CISCO RELEVANCE
THE CONNECTED CAR BUILDS WELL INTO CISCO’S VISION ON A NETWORK OF NETWORKS
Car Network
Car-to-car Mesh Network
Internet
WiFi
MobileMetro
Networks
VPN
MobileIPV6
MobileAccessRouter
Routing
HomeNetworking Security
MobileIPV6
CarrierClass
WiFi
Entreprise
LagunaIPV6
Leader
#1
Homeland Security
#1
The car network becomes the
natural extension of Home NW and
Entreprise NW
© 2005 Cisco Systems, Inc. All rights reserved. IBSG - 15Marc Girardot – Automotive Lead – [email protected]
CISCO’S MOBILE IP AND TECHNOLOGY MAKE THE CAR ARCHITECTURE APPLICATION AND ACCESS AGNOSTIC
CISCO’S IP V6 TECHNOLOGYENABLING CONNECTED CAR ADVANTAGES
• Avoid “reinventing the wheel” in networking technology, wireless communications and security;
• Scale Cisco innovation resources ($3,7Bn) in networking technologies, wireless and security;
• Leverage Cisco’s unique experience in traffic prioritization and quality of service;
• Leverage existing and future wireless infrastructure (Homeland security infrastructure in the US) and roam over different channels of communication;
• Extend usage of existing and future IP applications and devices from home (Linksys by Cisco) or the office (Cisco) to the car;
• Evolution of applications or devices doesn’t depend on upgrade of platform;
Source: IBSG analysis
Cisco 3200 Series Wireless & Mobile Routers
Cisco 3200 Mobile Router for Vehicles Cisco 3200
Wireless Router for Infrastructure
© 2005 Cisco Systems, Inc. All rights reserved. IBSG - 16Marc Girardot – Automotive Lead – [email protected]
CISCO HAS RECENTLY ANNOUNCED AN ORGANIZATION DEDICATED TO PUBLIC SAFETY WHICH INCLUDES MOBILE ACCESS ROUTING
IBSG - 17© 2005 Cisco Systems, Inc. All rights reserved.
CONCLUSION
© 2005 Cisco Systems, Inc. All rights reserved. IBSG - 18Marc Girardot – Automotive Lead – [email protected]
CONCLUSION
• The industry has failed so far;
• Greater standardization is the right direction…
• …but there needs to be much much more focus on value;
• Government, traffic authorities and environmental agencies are also critical stakeholders;
• We all need to partner intelligently coming with our respective forces…
• …and Cisco invites you to a balanced partnership to a clear vision.