Automotive News Europe - March 2020 - 7

AUTOMOTIVE NEWS EUROPE

COVER STORY

Tesla software upgrade example.

"Tesla is able to incorporate the
entire learnings of the vehicle fleet,
so its cars get better as they age,"
one automotive analyst said.

It's possible to boost the acceleration in the Tesla Model 3 for $2,000.
But to fully realize the potential of overthe-air upgrades, Toyota must revamp
its electronic architecture, Luca said.
"Tesla planned its cars from the beginning with this purpose. For us, so far, it
is an add-on. The car was not conceived
in this way," Luca said, adding that it
was now a "priority" to introduce a new
architecture.
Another key to tapping this revenue is
the 5G network, which will allow more
information to be transmitted more
quickly. The research firm Gartner said
that by 2023 automotive applications
will represent 53 percent of internet of
things [IoT] data transmitted over 5G,
as cars connect to cloud servers and
their environment.
BMW says it will be the first automaker to
offer a car with 5G capability when it unveils the iNext electric SUV in 2021, but
others are pushing forward as well. "It will
enhance the experience we already offer
the customer," said James Mallinson,
BMW's head of vehicle connectivity.

10 times faster than 4G
The ability to send more data at speeds
around 10 times faster than 4G will enable a range of benefits, Mallinson said,
including high-definition map updates,
movie streaming for passengers and
so-called V2X communication that lets
the car broadcast its location to enhance safety.

MARCH 2020

Infotainment specialist Harman won the
contract to supply technology for the
iNext's 5G connectivity. Harman says it
is building on technology from its parent
company, Samsung, to position itself as
the go-to company for automakers looking to deliver features wirelessly.
"The revenue model is shifting from a
one-time sale to continuous revenue
post-sale," said Vishnu Sundaram,
head of telematics at Harman. "Having
seamless connectivity will be pivotal for
those revenue streams."
Harman says that a series of deals
will make it the leading company in
5G telematics by 2022. It also offers
cloud-based services via its Ignite on-

The revenue model is
shifting from a one-time
sale to continuous
revenue post-sale."
-- Vishnu Sundaram,
Harman head of telematics

line platform (see interview, Page 20)
that automakers can incorporate in
new models. Among the offerings is a
post-sale software upgrade that will unlock existing capabilities within a car's
speaker system.

Will drivers pay?
Still, it's unclear which connected options customers will actually buy -- and
if they do, if they will continue to do so
year after year.
A big red flag for the post-sale revenue
model came last year when BMW said
customers with its latest OS7 operating system would be charged for Apple
CarPlay, which lets drivers with Apple
phones migrate apps and features into
the dashboard screen, after a one-year
trial period. CarPlay, like Android Auto,
is usually offered as a free feature.
But after a backlash from customers in
the United States and UK, BMW relented and made it free again.
That seems to indicate that some operations of the dash screen are off-limits,
including add-ons such as Car Play and
Amazon's Alexa voice assistant, said
Luca of Toyota. "I think the functionality itself is going to be a commodity, it's
very difficult to [charge for it]," he said.
The ability to get customers to pay to
unlock an embedded feature at a later
date could be manufacturer dependent,

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