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App Store in the Car - It's Not 'App-ening

by Roger Lanctot | 10月 28, 2012

It is true that some of the latest systems launched by the likes of Chrysler, GM, Renault and PSA have sexy user interfaces featuring familiar and unfamiliar icons – but icons nonetheless. If you’ve seen the videos for Renault R-Link, then you have had the experience of imagining those videos as television advertisements sufficiently compelling to attract buyers. Similarly, GM’s CUE, with its icon-based answer to Ford’s MyFord Touch perceived UI misstep, has already been featured in ads derived from promotional videos.

It all feels and looks so good that it is painful to bring it to a screeching halt, but I am here to say (write) that it all has got to stop. The icon-based interface is already passé. In fact, the icon-based interface is worse than passé, it is a low value-add mimicking of the predominant mobile device interface made famous by Apple and Android. The good news is that it is already being supplanted and surpassed by automotive optimized solutions.

The App Trap

Companies, such as Toyota, that opted for icons (or boxes in the case of Entune) have trapped themselves. Toyota’s choice, for example, of OpenTable and MovieTickets apps on the default home screen is a classic case of a too-rigid application of a particular paradigm. In this case, the focus on apps and icons replaced clear thinking about the driving experience and the user experience.  The good news is that change is on the way from Toyota.  The bad news is that much of what has gone before will be scrapped.

Aware of this fundamental shortcoming, Chrysler has opted for a combination of main screen plus icons as a kind of compromise. But even here the result is a cluttered, dare I write it, distracting presentation of information – and unnecessarily so.

While it is true that we now think of functions as apps and we think of apps as icons, the dialectic doesn’t end here. The apps, or applications, actually need not be rendered as dedicated icons, they can be functioning in the background, designed to nominate themselves or to be accessed when and where they are needed. Or they could be accessible as source content via more familiar car-oriented interfaces.  (BMW's i-Drive desktop paradigm - mouse and dropdown - remains competitive but could use some rethinking.)

The company currently coming closest to achieving a kind of next generation user experience is Pioneer with its Zypr cloud-based app platform where multiple off-board applications are woven together into a single user experience. Unfortunately Zypr itself has its shortcomings, especially as currently manifested as the Bespoke system in Scion vehicles in the U.S.

But Zypr is on the right track and Toyota is to be saluted for taking the risk of deploying this unproven solution. Zypr UI designers understand that we need not be so literal, as an industry, as to represent every function as an app icon. Accessing Facebook while driving doesn’t make much sense, but allowing my music source to recommend music based on the preferences of my circle of “friends” may make sense.

The urge to develop driving-related apps is also well conceived and well-intentioned, but the outcome is likely to be less so. OEM-specific apps designed for driving-related activities, though clever, are destined to be ignored by consumers.

The market has moved on from “apps” to off board “functions” integrated virtually into on-board systems - with off-board processing occurring transparently in the background. Consumers are flocking to apps, but they are flocking to the apps that their friends and neighbors are using and recommending. They are not looking for “new” apps that no one else has ever heard of or, worse, that are only accessible on a particular brand of car or in a particular app store.

It is also important to bear in mind that the overwhelming majority of apps are free.  More on that later.

The drive for app development is part of the effort to improve daily relevance for telematics platforms.  If people don’t use it (every day), so the conventional wisdom goes, they won’t renew it (ie. pay for it).

The King of All Apps

The apps that consumers report using most frequently are often navigation and traffic related.  But there is one application that remains the king of all apps in the car representing the greatest single lowest common denominator for in-vehicle functionality: the radio.

If there is one thing that car makers have gotten right in the early app development and deployment activities it is the focus on Internet radio and streaming audio applications.  From GM to Toyota to BMW to Mercedes, the short list of early app development invariably features Pandora, MOG, Aupeo!, Tunein Radio, and iHeartRadio.

Audio content rules in the car and there is nothing simpler, safer or more appealing for a driver than simply turning on the tunes.  In fact, the audio-related smartphone applications that are coming into the car are so compelling that they justify the significant development dollars spent.  And they have such large user followings that they help to sell cars – or so some car makers lead us to believe.

BMW is a particular case in point, focusing on iPhone app connectivity based on the 40% of BMW drivers that own iPhones.  (The figure is higher for BMW’s Mini mark.)

Consumers Want Smartphone Apps

Smartphone apps showed up for the first time in Strategy Analytic’s latest consumer surveys in Western Europe and North America in 2012 (results below) described by respondents as “must have” technology in the car.  While specific apps were not named or specified, it is clear that auto makers have universally picked up on the fact that consumers want their tunes and they want them delivered in a creative, convenient and customized manner.

The rise of IP-based audio content delivery to the car has even spurred SiriusXM, the U.S. satellite operator, to contemplate a shift to a hybrid satellite-cellular model (in the form of its recent selection by Nissan to provide telematics services in North America).  The single most successful subscription-based content delivery platform in cars worldwide – SiriusXM - has seen the writing on the wall in the onset of Internet radio and streaming audio apps in cars and has begun its transition to a two-way broadband pipe.

Of course, there is a more primal urge behind the deployment of apps in cars.  Some car makers clearly expect to sell apps and or content via in-vehicle app stores.  This is yet another ill-conceived notion, but one that has allowed OEMs to justify the embedded modules to their boards.

Justifying an embedded module based on anticipated app store revenues is a cynical move based on some pretty ridiculous assumptions.  After all most apps are offered for free or with a nominal charge.  But if it means consumers will benefit from an enhanced ownership experience and enhanced safety even though they may never make any purchases, maybe the ends justify the means. 

Expecting app stores based on embedded modems to generate revenue is equivalent to making overly optimistic estimates of renewal rates for telematics systems.  Car makers keep looking to the embedded modem to deliver the “killer app” that will pay for the cost of the modem.

This pay for play mindset has ushered in subsidized relationships – such as the SiriusXM model – where connected service providers pay for access to dashboard real estate.  To this day car makers working with SiriusXM in North America are addicted to the subsidy checks from SiriusXM.  Only recently have they reconsidered this dependency as SiriusXM has intensified its push for Satellite Radio 2.0 which requires new, more expensive hardware and further non-recoverable engineering investments.

A similar subsidized relationship exists between Sprint and Chrysler on the newly minted Uconnect telematics platform.  Sprint hopes to make up in subscription, app and content revenue what it is investing in Uconnect.  The likelihood of Sprint successfully monetizing Uconnect is slender indeed.

The problem with the subsidized model is that it prevents clear thinking on the part of the OEM.  Vehicle connectivity is primarily intended to enhance the vehicle ownership experience by enabling vehicle diagnostic and prognostic functions intended to strengthen the bond between the customer and the car and, at the same time, the original dealer.

Subsidized models – which usually don’t provide for dealer compensation – are doomed to failure over the long-term since they do nothing to strengthen the customer bond and only create headaches for dealers.  Dealers make no money selling the connectivity platform and barely understand it.  They get little to no vehicle information from the system, but they are expected to support customers who complain about apps the fail to function properly.

Leave the App Stores to Google and Apple

It is the opinion of this analyst that app stores are best left to Apple and Google and mobile devices and generally are not intended to be linked to the embedded modem.  Consumers will not want to “own” an app in their car that they cannot access or use outside the car.

In this context, though, it is still possible for OEMs to rationally justify some native app development for high usage, in-vehicle apps.  The examples today are limited to app platforms from BMW, GM and Ford, most of which emphasize access to audio content.

Native app development in support of audio-focused apps is justifiable based on the frequency of use and the need for automotive-safe interfaces.  And these apps generally enable the use of popular apps acquired outside the car, merely making possible a safer in-car experience.

Among the growing roster of audio apps, there is one audio app that stands out in a competitive Internet radio and streaming audio marketplace: Aupeo!  Unique among the growing ranks of Internet radio and streaming audio offerings, Aupeo! distinguishes itself with a global platform – available in 43 countries worldwide – integrated with social networks (allowing Facebook friends to influence music recommendations), and optimized for use in the car.

While applications such as Pandora have moved quickly to adjust their application to better suit mobile users – the source of the company’s greatest user and usage growth in the past two years, Aupeo! was conceived for mobile usage.

Another player positioned for global deployment is TuneIn Radio with listeners in 200 countries (are there that many?) and available for download in 100.  TuneIn’s more forgiving business model allows the company to plow its revenues back into ongoing content acquisition including regional soccer leagues and podcasts, of which the service has two million.

Players such as Aha, Stitcher and Pandora have significant traction in the U.S., but have struggled to bring their products to a global audience.  Aupeo! captures the automotive industry’s priorities best with its stated focus on a global, social and optimized offering.  Newcomers to the automotive audio app space will be advised to fulfill those three pillars if they hope to be successful.

Implications

Navigation and traffic applications will always see high usage rates in cars, especially as navigation-centric experiences enable additional content and services such as parking, fuel pricing, and speed cameras.  But the proliferation of audio applications in the car is a special case leveraging true daily usage for a unique, in-vehicle entertainment experience.

While location is rarely a relevant signifier for music choices, time of day, weather and the preferences of friends may have meaning.  Audio applications that enable a social listening experienced optimized for safe use in a moving vehicle have the power to transform content consumption in cars.

What is emerging is a hybrid listening experience capable of acquiring and organizing content from multiple sources (digital or analog radio, satellite, cellular or storage device) and managing the quality and nature of delivery based on the available connections.  In the not distant future a source might even be a fellow driver in a nearby vehicle.

But, as an industry, let’s not make the mistake of assuming that consumers will pay for an app that can only be used in the car.  And as an industry let’s eschew subsidized connectivity models that pervert the intended purposes of embedded systems – to improve customer satisfaction and the ability to capture aftermarket revenue via the dealer network.

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