Smartphone Integration Triggering More Sophisticated Infotainment Systems

The entry of Apple and Google in the automotive space has elevated the concept of a base car infotainment system, said Sachin Lawande, president-Harman’s Infotainment division, in a presentation at the Pacific Crest Global Technology Leadership Forum webcast Monday from Vail, Colorado.

Integration with smartphone platforms is “driving greater awareness” of infotainment systems, Lawande said. Consumers want smartphone capability in their cars and are “no longer satisfied” with the car radio, he said. Yesterday’s entry-level system is “going away, to be replaced by a base infotainment system” that will include a radio, plus music services and navigation features accessible through the smartphone, he said.

Until two or three years ago, carmakers plugged in a basic AM/FM radio with a CD player as the default entertainment option for a vehicle, Lawande said, and now are asking suppliers like Harman for a “bigger screen system” capable of integrating with the major smartphone operating systems. “It’s good for Harman because it has expanded our business,” Lawande said. Previously, the car radio was a “commodity,” he said, but now that the base system is being redefined, “it’s lifting the content and bringing more opportunity.”

Early on, Harman had “extensive discussions” with Google about bringing capabilities from the Android platform into the automotive world that led to establishing the Open Automotive Alliance, Lawande said. The upshot was expanding the scope of the base car system by adding “more content and sophistication to it.” The exposure was positive for Harman, he said. OEMs that weren’t Harman customers are “now talking to us about doing work for them,” he said.

That’s crucial for Harman’s expansion in infotainment. The company wants more traction among Japanese OEMs selling into the U.S. market and it hopes to secure contracts with Ford, the only one of the big three U.S. automakers it doesn’t have one with, Lawande said. Harman is “actively working on presenting our business case” to Ford, an account that’s “strategically important” for Harman to penetrate, he said. On gaining acquisitions among Japanese OEMs, Lawande cited the difficulty of entering a market segment that’s “not a level playing field the way we would like to see.” But with “significant changes” happening in the automotive space with technology, connectivity and a focus on “usability,” Harman hopes to convince Japanese OEMs that they “can’t rely on people in Japan” to determine what’s right for the U.S. market.

Another change in the automotive space is the shift from a hardware-based model to one that’s software-based, Lawande said. A Mercedes-Benz S class vehicle today has roughly 150 electronic control units, or computers, which translates to about 40 million lines of computer code, with half of that computing power devoted to the infotainment system, he said. Some 70-80 percent of Harman’s effort now is software-related, compared with 80-20 percent hardware/software seven years ago. “The business has changed and forced us to change how we do business,” Lawande said. Having retooled itself as a software company, Harman now uses that as a differentiator. “We have done a better job of transforming ourselves” than others in the industry, he said.

A major challenge facing infotainment system suppliers and OEMs is simplifying the user interface. Lawande outlined the stack of applications that have to be integrated within an infotainment system, including navigation, connectivity through Wi-Fi and Bluetooth, safety solutions and media playback. Those applications have to reside on top of an operating system and then work within the human machine interface of the vehicle platform, which Lawande defined as “what makes a system look like a Mercedes or BMW system.” User feedback from yearly service quality studies indicates “usability” is one of the biggest areas “where there can be a lot of improvement,” Lawande said. “There’s a lot of technology packed into systems and the big challenge is how to interface with them,” he said.

The current percentage take rate of customers opting for an infotainment system is in the “low 20s,” Lawande said. Harman sees that number rising to the high 20s by 2016, with every additional percentage point contributing $75 million revenue. The take rate will grow “substantially higher” “as consumers demand the capability” and OEMs use infotainment as competitive leverage, he said.