Smartphones force car navigation to redefine itself (Part 1)

Traditional car navigation systems are now facing the need to redefine themselves. This is due to the rise of smartphones. Faced with smartphones that are always online and can continuously increase their functionality through application software, car navigation systems have no power to fight back. In order to promote the evolution of in-vehicle information terminals, automobile companies and in-vehicle product companies are stepping up their actions.

The rise of smartphones is causing a huge change in the car navigation market. The first to be affected are simple car navigation devices (PNDs). Their development momentum has plummeted from its former heyday.

Swedish research company Berg Insight said that global PND sales in 2011 were 33 million units, 5 million units less than the 38 million units in 2010. By 2016, it is expected to drop to 23 million units.

As for multi-function built-in navigation systems, the supply is expected to increase in the future as automobile companies are increasing the number of original equipment. However, we are not sitting back and relax. Consumers who have learned about the convenience of smartphones are beginning to seek an open environment for the previously closed automobile information terminals. Just as domestic mobile phones that support Japan's independent standard "i-mode" have transformed into smartphones that can permanently access the open Internet, automobile information terminals are also ushering in a period of redefinition.

In fact, "there is a growing consensus among consumers that smartphones, which offer constantly updated maps and real-time information on traffic jams, are more convenient than built-in navigation systems" (a car navigation system company). Today, traditional car navigation systems cannot compete with smartphones in terms of hardware performance, permanent Internet access, and flexibility.

Concentration on independence and dependence

Automobile companies and automotive product companies, which have sensed the threat from the rise of smartphones, are preparing to reform in-vehicle information terminals through three strategic attempts (Figure 1).

Figure 1: Automotive products polarized in smartphone linkage
At present, automotive products that are linked to some functions of smartphones have been launched. In the future, it is expected that the focus will be on smartphone-type products equipped with only HMI such as displays and buttons, and all applications will be executed by smartphones, and standalone products with the same functions as smartphones.

The first strategy is to abandon the direct confrontation with smartphones and launch "smartphone-type car products" that fully rely on smartphones. The operation of application software (hereinafter referred to as applications) and Internet communication are handed over to smartphones, while car products focus on operating systems such as the display and touch panel of the car display. Smartphones and car products are connected through USB, wireless LAN and Bluetooth. Services closely related to cars, such as navigation functions, are provided by automobile companies, car navigation companies or their partner companies in the form of smartphone applications.

The second strategy is to improve the functions of the car navigation system itself and launch a "standalone car product" with functions equivalent to those of a smartphone. In other words, the car product will independently complete the advantages of smartphone navigation applications, such as real-time map updates and expanded functions through additional applications. Although basic operations do not require the help of a smartphone, network connection functions such as DLNA (digital living network alliance) are required to play music and other content stored in the smartphone.

The third strategy lies between the two. This is the "hybrid in-car product" strategy, where the current in-car navigation function is maintained in the in-car product, and other functions that cannot be realized are supplemented by smartphones connected through external interfaces. In addition to the communication function relying on the smartphone, the coordinated application with Internet radio and SNS is also executed by the smartphone, and then displayed on the display of the built-in navigation system or played through the in-car speakers.

However, it is widely believed that such hybrid in-car products are transitional products that will be eliminated in about five years. In the future, in-car products will be concentrated on two poles: smartphone-type and standalone. This is because "the car navigation system-centricism represented by current in-car dedicated products will sooner or later be broken, and the navigation function will become one of many applications" (Yoshihisa Matsuoka, executive director and head of the marketing strategy department of Clarion).

Simply put, if a hybrid mechanism must be adopted, "it only needs to be installed on independent vehicle products (to implement the application of the mechanism)" (Toyota e-TOYOTA Director Hiroyuki Yamada). In other words, hybrid vehicle products will be swallowed up by independent vehicle products sooner or later.

Differentiate with the cloud

As car navigation systems become polarized, the challenge in the future will be how to differentiate products. Whether it is a smartphone-based car product or a standalone car product, users can freely add applications, making it difficult to compete on the overall usability of the product through navigation functions and operability like traditional car navigation systems. To this end, car navigation system companies are thinking of strengthening HMI (human machine interface) and expanding services via Internet servers, that is, "cloud services."

In terms of HMI enhancement, the competition focuses on the quality of touch panel response and recognition, the ease of use of the operation keys (steering switch) built into the steering wheel, and the sound quality optimized according to the in-car environment. Considering that the time for voice and gesture operation will become more and more mature in the future, the configuration of microphones and cameras that facilitate operation from the driver's seat will also become an important factor.

In terms of cloud service expansion, it is necessary to provide functions such as speech recognition, speech synthesis, language understanding, information retrieval, information collection and analysis, online storage, etc. The ultimate goal is to aggregate information related to vehicles and individuals in Internet servers and use this information to provide accurate information services to each user (concierge service).

If a concierge service can be implemented, the possibility of users using their own products regularly will increase. This is because once they switch to another company's product, the data accumulated in the past will no longer be available. On the contrary, if they continue to purchase products from the same company, their previous personal data can be carried over, thus maintaining a consistent usage environment.

"When replacing a conventional car navigation system, preferred locations and music and other content had to be re-entered, but new-age car products will free users from such tedious tasks" (Clarion Matsuoka).

That being said, the strategy of combining cloud services with terminals to attract users is actually the specialty of Google and Apple in the United States. Moreover, many people believe that "it is only a matter of time before Google and Apple officially enter the automotive field" (car navigation system developers).

Currently, Japanese companies still have a high share of in-car products such as built-in navigation systems, but Korean and Taiwanese companies that have joined forces with Google and Apple's products may soon sweep this field. Below, I will introduce the measures taken by Japanese companies for smartphones to avoid such a situation (Table 1).