Issue: Jul 2005


Tuning in to the future



Panasonic has set itself the goal of becoming the “number one car electronics manufacturer in Europe”. Automotive Purchasing News’ Nick Palmer asked Panasonic’s European head Shigeru Matsuda to look at some of the trends in automotive electronics.

by Nick Palmen

Panasonic has set itself the goal of becoming the “number one car electronics manufacturer in Europe”. Automotive Purchasing News’ Nick Palmer asked Panasonic’s European head Shigeru Matsuda to look at some of the trends in automotive electronics.

The European market for Automotive InfoTainment systems shows a healthy growth. Analysts from several different marketing research companies expect a robust growth from 2,6 Million € in 2003 to 9 Million € in 2010. An innovation potential that is far beyond the comparable figures in other markets will support this trend. The dashboard of the future will increasingly become a complex multifunctional human machine interface for entertainment, information, navigation and comfort functions.
Currently the completely connected car that integrates all comfort and InfoTainment functions still seems to be out of reach. But if the focus is set to High End Cars from premium carmakers like Audi, BMW and DaimlerChrysler we already see the spearheads of the coming trends.
The first remarkable push for InfoTainment systems came, when digital units replaced analogue systems. In 2002 only in Western Europe 13 Million players for digital media were installed in cars, which is the equivalence of 850 Million €. On the long term DVD’s will replace CD’s and MD’s. It is not only the higher capacity that pushes this trend. DVD’s also bring with them the advantages of ease of use and the possibility of storing all kinds of data.
HDD on the other hand offer an even dramatically higher capacity than the DVD. Additionally an HDD is a read and write media; an HDD equipped Navigation system has the option of dynamically changing it’s own database. The potential disadvantage of a the complications how to load the data on the HDD are subject of intensive research at PASE.
Navigation systems find their niche
It has been a long road from the time when navigation systems were seen as only high-end toys for a few customers when they were first introduced in the early 90’s. Nowadays the increasing density of traffic and falling prices the demands for navigation systems let them propagate from high-end cars down into mid–end ones.
One way to characterize navigation systems is to describe them as off-board or on-board systems. On-board systems carry their navigation base with them whereas off-board systems are connected to a navigation server via a high-speed wireless connection. Off-board navigation even comes with new business models like pay-as-you-go where the driver is charged for every-route guidance.
Despite some very optimistic predictions 2-3 years ago, almost all analysts expect that onboard navigation will remain mainstream for the next 4-6 years. The expectations concerning the UMTS network, one of the major technological pre-conditions for new generations of on-board navigation systems, have been reduced due to technological delays and the expected connection fees and the acceptance of the users to pay these fees, respectively. On the other hand pay-as-you-go models have not yet been the success the promoters of these models have expected.
The overall market for navigation systems in Western Europe had a volume of 2,8 Million units, which generated a total turnover of 1,3 million €. Analysts expect a growth of *4 until 2010.
Digital Audio broadcasting
Politically unclear strategies and the lack of achievable receivers have up to now prevented the breakthrough for the European invented digital audio broadcasting system DAB.
Somehow, never before in the past decade the environment for DAB has been so good as it is in these days. In UK the BBC has been able to create very dense coverage for DAB, which will be adopted also by other European countries. Also for the first time in 2002 achievable home equipment receivers have been brought on the market. Current figures talk about a number of half a million DAB listeners in UK in 2003 and a doubling of that figure by end of 2003.
Also the carmakers have understood the benefits of the media. In a dramatic change of their previous policy they decided to define DAB downlink combined to GSM uplink as being the basis for Telematic architectures despites their old plans that were UMTS centric.
Model Year 2005 will see a lot of new cars being introduced into the market that have DAB receivers originally equipped. Satellite based digital radio, which can be predicted to become a tremendous success in northern America will have to compete with the AM based Digital Radio Mondial in Europe; a system, for which the pan-European broadcaster RTL already gave a strong commitment. Analysts expect only an OEM equipment ratio of 1,8 % in 2010 fro satellite based S-DAB, which is far away from the figures calculated for north American system XM.
Demands for World Platforms
The diversification in technology requirements for different markets is a major challenge for Automotive InfoTainment suppliers like Panasonic. Examples are the different technical standards for digital radio as well as the demands of different carmakers for brand-specific as well as market-specific human machine interfaces.
Developing a proprietary solution for every market and every brand would lead to a number of different developments that have an exponential relationship to the factors brand/market. Obviously this strategy would not be a preferable one.
The definition of a world platform strategy has to start with the separation of Core Technologies and Boundary Technologies, respectively.
Typical examples for Boundary Technologies are:
· FM broadcast Data Services (RDS and comparable)
· Digital Radio Technologies (DAB, XM, DRM, etc. )
· Brand Specific HMI design
· Brand Specific HMI functionality
· Country/Market specific HMI design (Languages, Fonts, Cultural preferences)
The strategic decision between case-by-case development and platform-oriented development is always to be seen with respect to the area of conflict between Development Costs and Unit Costs.
A development in which, for example, a basic motherboard is equipped with technology/brand specific motherboards might result in a very optimized development cost statement. For sure it will result in unit costs that are unacceptable for mass production industry.
Another potential trap for companies in the definition of world platforms is the Overloading of the core technologies. In the wish of being as global as possible the core technology will be defined with respect to every potential variation. At the end of the lifetime of the product analysis sometimes show, that 80 % of all realized variations have been made with 20% of the core technologies potentials.
Therefore the clear objectives for world platform design are:
· Separation of Core Technology and Boundary Technology
· Design for manufacturing: minimizing the extra costs for variations
· Limitation of the core technologies variation widths to the really needed
The traditional regional value chain is changing to a global value web, like Internet auction. Marketing, sales and service will remain regional. However, R&D, development and manufacturing will be more globally optimized. Successful suppliers must be global and able to make quick decisions.


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