From analog instrument panels and AM/FM stereo systems, infotainment has evolved to encompass all the components, hardware and software that enable nearly every interaction between drivers, passengers and the vehicle. Among the functions that fall under infotainment are navigation, smartphone connectivity, over-the-air updates, safety features such as automatic emergency calling and even tasks that will be necessary for autonomous driving such as vehicle-to-infrastructure communications. Suppliers to the field include the world’s biggest tech companies -- Apple, Google and Microsoft -- which are providing the in-vehicle operating systems that power ever-larger central and dashboard screens. Beatriz Minamy, a senior analyst at IHS Markit, talked to Automotive News Europe News Editor Peter Sigal about current and future trends in infotainment, and why automakers see it as a likely revenue stream.
How do you define infotainment?
The concept of infotainment has evolved over time. In the past it was focused on the driver, for instance providing navigation or music, but with new technology and notably connectivity, the number of services has increased. Also, user experience (UX) and user interface (UI) have become more prominent. So infotainment now also includes software, UX/UI and other services like over-the-air updates. It’s delivering more value to both the driver and, now, the passengers.
What other domains are included in infotainment?
It includes all connected services, which are part of what we call the software-defined car. And, within connected services we can even include autonomous-driving features to be activated in the future if the vehicle has the right hardware and software. On the hardware side, which influences UX/UI, it includes displays, virtual personal assistants and cockpit domain controllers, an important new trend. The area of the vehicle cockpit is starting to get more complex and consolidated overall.
What metrics do you look for to give you an idea of the scope and growth of the market?
We have a methodology for measuring the volume and value of these technologies, supported by our vehicle production and sales forecasting team. If we go more into the KPI (key performance indicators), there are many ways to measure the efficiencies of various components. For example, map companies can monitor whether or not you activate their services, and also the percentage of data that is utilized or exchanged. If we look at the area of data monetization, using data that the vehicle can provide, information about how you drive the car can be used for usage-based insurance and predictive maintenance. The vehicle is a source of various types of data that can be mapped and quantified and evaluated from a performance point of view.
Can you put a figure on the size of the infotainment market?
Overall, the trend is that this market will grow in the future, and we can see that reflected in different components. If we are talking about connectivity, for example, what we consider embedded telematics [emergency calling, roadside assistance, stolen vehicle tracking, over-the-air updates] and hybrid telematics [using smartphones in addition to embedded technologies], the market will reach $7.9 billion by 2025. In terms of volume, from 2020-25 the market will grow from 41 million to 65 million vehicles produced annually that will have the capacity of exchanging data through these telematics.
How do consumers rank the infotainment experience when buying a new car?
Design is always an important parameter, and that includes interior design. Design also means the screen size, the ergonomics and the UX/UI, because it’s useless to have a big screen that does not have a good resolution or is too complex to understand. Other factors are the intuitiveness and responsiveness of the system, if it's too slow while clicking. But, of course, buyers will see the real functionality of [infotainment] features only when they use them.
We have seen automakers seeking to become digital service providers, primarily through over-the-air upgrades or performance enhancements. How far away is this from reality?
We have begun to see various types of subscription modes or free trial periods. What we see on the global level is that in the U.S. subscriptions are more developed for services such as emergency calling, whereas those have been mandated in Europe. We expect the market to grow for services involving in-vehicle payments such as fuel, parking, functional over-the-air updates, e-commerce and delivery services. We have found that 48 percent of car owners with in-vehicle car payment capabilities expect to use that feature. And 80 percent of customers say they would be ready to share their driving behavior data if it won’t increase their insurance cost. So as long as the customer can get a benefit for it -- and the systems is complaint with the General Data Protection Regulation -- they will be happy to share their data.
What other specific services would buyers want to pay for after the sale?
That's a very good question. Today what we are seeing is driver-centric: Clients in Europe are ready to pay for real-time traffic, parking, tolls -- anything that provides an immediate benefit while they are driving. Services that require data-sharing such as usage-based insurance and in-vehicle payments are growing, but that growth will be at a different rate than in China, where people are more willing to share data, or other regions. As long as the vehicle has the right software and the right hardware, services can be activated such as Tesla’s EV range extender.
How do you see the automotive software platform market developing?
Open-source operating systems will dominate this area in a few years, mainly thanks to lower development costs. For example, a company using open source software could already have 70 percent of a production-ready project. It also supports third-party integration so it’s more flexible. We have to mention Android Automotive when we are talking about the key trends in operating systems platforms. It’s a Google product that can offer services such as Google Maps, voice assistant and the Play Store. Some big automakers are collaborating with Google on this, including PSA Group [as well as Volvo Cars and its subsidiary, Polestar]. We also see some cases of a proprietary OS [operating system], like in the case of VW.OS, which is a Linux-based system.
VW has had some software issus with the launch of the Golf 8 and the ID3. Is this related to VW trying to go its own way rather than using an established product?
The story of VW.OS is quite interesting. What they aim to do is to have control of their entire vehicle architecture and to own the data. That is where these services and data business models will develop. Other automakers have decided to share that with other parties, such as Google for example. Automakers are following different strategies because they not only need to think about what is happening inside the vehicle, but also what is happening outside the vehicle, with the Internet of Things and Smart Cities, for example.
What are some of the trends in UX and human-machine interfaces inside the cockpit?
A big trend is virtual personal assistants (VPAs), meaning voice-control features. We have estimated that by 2025, 85 percent of the head units produced will have embedded voice capability. The VPAs are disrupting how we interact with the car. They can allow drivers to just talk to the car and ask for specific directions rather than having their attention diverted to adjust the infotainment system manually.
Has the huge vertical central screen offered by Tesla influenced mainstream automakers?
I have seen the [new Mercedes-Benz] S-Class and the display orientation has changed [to a large vertical central screen and separated instrument cluster display] from the previous MBUX, which was more of a long-dashboard screen. Such vertical screens are being seen in more models, such as the Renault Clio and Polestar 2. I hope this is based on UX/UI analysis and overall usability analysis. Tesla has become a reference for the industry in terms of innovation in many domains, not only for software, but also for electric vehicles and autonomous driving. It’s an iconic, aspirational brand and in a way it is setting the direction in the in-vehicle technology world.
Is it time to consider Apple, Google or Microsoft as automotive suppliers, and for consumers, is it important to have those brands attached to the car?
To answer your first question, we can definitely consider Apple and Google as automotive suppliers, probably not yet Tier 1 but as software and technology suppliers for sure. Both have an important brand awareness among consumers that can be translated via their collaborations with automakers. But this could taken two ways: as a positive, but also some people are very careful about who they share their data with.