Connected Cars Drive New Opportunities
“Connected cars” controlled by a vehicular communications system have started to merge onto our roadways. A recent study estimated that by 2020, 90 percent of cars will have an embedded communications system, known as C2X, linked to traffic lights, onboard car diagnostics, roadwork warnings, and other emergency and commercial services.
C2X, also known as telematics (telecommunications and informatics), is an integrated system of radio and communications protocols that sends, receives, and stores vehicle information for safer, greener, and smarter driving. Furthermore, C2X is already producing revenue. A pay-how-you-drive plan in Europe rewards drivers for safe driving and has contributed to a 42 percent growth in telematics-based insurance policies in 2014. In North America, the total number of insurance telematics policies is forecasted to increase from an estimated 4.2 million policies at the end of 2014 to 32.5 million policies by 2019, representing a compound annual growth rate of 50 percent.
While there are many concerns about protecting personal driving-related data, a study among 900 drivers across Europe partially funded by the European Union (EU) shows that nine out of ten drivers are eager to use C2X features. The same study concludes that in-vehicle notifications to inform drivers about speed limits, plus continuous in-car weather monitoring, would reduce fatalities and injuries. The conclusions were based on more than 1.5 million kilometers of driving in Europe.
Safeguards such as Advanced Driver Assistance Systems (ADAS) are designed to alert drivers to potential problems and help them avoid accidents by taking control of the vehicle. “The next-generation driver assistance systems will also have increased automated driving capabilities and will take over some driving tasks under controlled conditions,” says Christian Ress, Ford Motor Company’s Technical Expert in Connectivity. “However, full vehicle automation is still in the research phase, and the speed at which solutions take hold will be determined largely by customer and societal acceptance of new technologies.” Smart Cities also expect numerous benefits from efficient driving, or even less driving, which will significantly reduce carbon-dioxide emissions. Future connections into roadside and backend Car-to-Infrastructure (C2I) will enable new C2X applications that find available parking opportunities quickly and notify the driver before a trip that public transportation would be faster.
Requiring C2X Services
In 2016, it will be mandatory in Europe for new cars to be equipped with an onboard communications system that automatically contacts emergency services and alerts other cars in the vicinity in case of an accident. Other convenient services will emerge such as scheduling maintenance and adjusting customized settings for driver and passenger comfort. Car malfunctions can be detected in real time and perhaps solved via instructions transferred by software from a service center. If troubleshooting cannot fix the problem, the car can be directed to the nearest garage for physical repairs — for which the system will automatically ask the owner for verification and approval before making the appointment.
It is expected that car manufacturers will differentiate themselves by developing C2X-enabled function and application portfolios. Designed principally to satisfy safety concerns, C2X-enabled services will be created and monetized to put convenience and preventative maintenance into a single activity. Although manufacturers will initially control access to the data concerning critical auto parts, over time we can expect changes in the control of data ownership and transferability as second and third party providers rise to influence this growing market. Strong security is required to ensure compliance with strict EU privacy policies for transmitting real-time vehicle data. Updates will be required to ensure that vehicles are compliant with different standard specifications that will vary in each region. Ongoing cooperation between auto industry standards committees and government agencies will be an essential feature as C2X progress unfolds.
Dr. Ing. Dirk Eilers, Business Unit Manager, Business Automotive Unit, Fraunhofer ESK, a research partner of Huawei, explains: “One obstacle on this path is the lack of regulations needed to address liability in autonomous driving situations. Recognizing the importance of this issue, the EU has already taken steps to fund various research projects in the area of connected driving over the past few years and announced urgently required initiatives to help solve the lack of corresponding regulations.”
Disruptive Business Models
Unlikely companies such as Google, Apple, and even Alibaba have entered the connected car market — and traditional car manufacturers are not far behind. C2X functions are becoming an integral part of the car itself and will no longer be considered after-market products.
As a global solutions provider, Huawei acknowledges the need to partner with car manufacturers. Although not IT or telecom companies, car builders are Original Equipment Manufacturers (OEMs) with extensive knowledge of automation within the sector. Together with the OEMs, Huawei is adding value to the efforts of the highly skilled workforce in the automotive ecosystem.
“With e-mobility, growing shared economies, and autonomous driving on the horizon, new requirements and challenges are developing rapidly and many critical questions have to be answered soon,” said Huawei’s Dr. Luo Jijun, VP of Solution Management and Marketing Europe, at the Huawei C2X Expert Forum held in Chieming, Germany on September 29 and 30, 2015 to an audience of automotive experts. “These existing trends will force all traditional market participants to face and master disruptive developments that are shaping the future of transportation and communication concepts.”
Whenever a consumer buys a new car from a top brand, that new owner can be assured onboard telematics capabilities are installed and integrated. Following the trend established by software vendors for PC and mobile devices, car manufacturers also expect to send their customers C2X-related updates directly to the on-board vehicle systems. This way, customers will not be stuck with one version of the operating system or applications software, but rather they will register for a subscription that ensures access to the latest features delivered via cloud-based services.
Some new Mercedes-Benz cars already have Huawei modules onboard for telematics and multimedia applications. Huawei expects to further its reach in the automotive sector with LiteOS, a proprietary software operating system designed to power a wide range of smart devices. The LiteOS Application Program Interfaces (APIs) are built to enable third-party developers to easily write new applications for smart devices with embedded processors. Third-party partnerships will also be developed to aggregate these components into resource pools, and these resource pools into ecosystems that will include roadside assistance, navigation, and fleet management services.
Thinking Outside the Car
The market for C2X and connected cars is quite different from Huawei’s traditional carrier and enterprise technology markets. Today, Huawei has semi-conductor solutions that are packaged to provide GSM and LTE-based communications functions in combination with GPS, but it is Huawei’s work as a global leader in the development of 5G broadband wireless protocols that will prove essential for assisted driving.
Employing a team of more than 500 experts dedicated to 5G research and having established partnerships with over 20 universities, including Harvard, Stanford, the Technical University of Munich, and Tsinghua University, Huawei estimates that its total investment in 5G research and development will be USD 600 million by 2018. Among the many corporate-level partnerships and collaborations is Huawei’s relationship with the Fraunhofer Institute in Munich, Germany where integrated vehicle systems is one of the institute’s key research areas.
Looking outside the car, Huawei solutions for data centers, communications carriers, and cloud services are the connective fabric for bringing a wide range of on-the-move services that will include everything from vehicle monitoring to media content and even priority hospital access at great distances from the primary facilities. Nearly every C2X function will need a robust back-end system outside the car — likely provided by a partner ecosystem — to fully process the data and information that is most beneficial to drivers and their passengers.
Strategic Partnerships and Stakeholders
Car manufacturers need strong partners in the IT and carrier businesses to operate C2X services on a global scale. For example, cars in Europe are subject to different environmental regulations than those in the Middle East. After years of use, the collected data sets between Europe and the Middle East will be quite different. Integrated cloud services provided by qualified ICT partners will enable automobile manufacturers to provide uniform driving experiences in all possible local conditions.
A newcomer to the automotive industry with no legacy solutions to overcome, Huawei has received strong recognition from Mercedes-Benz, BMW, and Audi for its technology, which indicates a bright and promising future with the C2X platform for the telecommunications giant.
For example, any car equipped with a Huawei processor and communications module is designed to have direct access to monitor critical data that can be transferred to nearby service centers located around the world via secure 5G and eLTE networks. Open-source cloud services operated by Huawei and auto industry partners are providing connectivity between the C2X telematics platform to navigation, eCommerce, and direct-to-consumer media systems.
As a global ICT company, Huawei customers include telecommunication carriers, national and local governments, multi-national enterprises, small- and medium-sized businesses, and consumers. Huawei currently has global partnerships with more than 50 telecommunications companies, such as telecom giant Vodafone and Big Data enablers like European software maker SAP.