Apps in Automotive – Future Opportunities and Business Cases

November 6th 2013

Jack Bergquist – Senior Analyst IHS AutomotiveJack.bergquist@ihs.com

© 2013 IHS

Who is IHS Automotive?

Powertrain & Alternative Propulsion

Light Vehicle Sales

Light Vehicle

Production

Component Sourcing and Supply Chain

Medium & Heavy

Commercial Vehicles

Technology Analysis:

Infotainment ADAS

Supplier Sourcing

Network Planning /

Performance Management

Same Day Analysis

IHS Automotive delivers the most comprehensive range of business and product intelligence on automotive infotainment and communications technologies.

Technology Analysis:

Infotainment, Hybrid-EV,

ADAS

© 2013 IHS

Automotive Technology Solutions Group

3

IHS Automotive Technology Solutions

Group

Infotainment Systems

ADAS/Safety

HMI/ Usability

Consumer Preference

Hybrid EV

Software & Apps

© 2013 IHS

Western European Smartphone App Integration Unit Sales 2010 - 2019

4

2010 2011 2012 2013 2014 2015 2016 2017 2018 20190

1000

2000

3000

4000

5000

6000

7000

8000

Western European Vehicles Sales with Smartphone App Integra-tion

Total Vehicles with Smart Phone App Integration

Unit

Sale

s (K)

© 2013 IHS

Global Smartphone App Integration Unit Sales

5

2010 2011 2012 2013 2014 2015 2016 2017 2018 20190

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Global Smartphone App Integration Unit Sales

Total Vehicles with Smart Phone App Integration

Unit

Sale

s (K)

© 2013 IHS

European Telematics Sales 2010 to 2020

6

© 2013 IHS

Global Telematics Sales 2010 to 2020

7

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20200

10000

20000

30000

40000

50000

60000

Global Vehicle Sales with Smart Phone Integration

Total Vehicles with Smart Phone Integra-tionUn

it Sa

les (

K)

© 2013 IHS 8

• Largest existing app ecosystem in the industry, still TBA for MyFord Touch • Open architecture for app development worldwide• Rich vehicle API data source to harness, also harnessing OpenXC• Forecasted WW cum. sales of App-Enabled Fords – 13.6M units by 2018• Forecasted NA cum. sales of App-Enabled Fords – 10.4M units by 2018

Take-Away

© 2013 IHS 9

• Open architecture for app development worldwide• Rich vehicle API data source to harness• Forecasted WW cum. sales of App-Capable GMs – 30.5M units by

2018• Forecasted NA cum. sales of App-Capable GMs – 17.2M units by 2018

Take-Away

© 2013 IHS 10

Best Future Architecture for Automotive Apps?

10-20 Apps

OEM Chosen Driver Chosen

Digital Media Input

Smartphone

Phone App Integration SW

(E.G. MirrorLink)

Apps Head Unit Software Based

Flexible Platform

Embedded Head Unit Apps

2012-2020

CE App Store with Auto Apps

Fast moving with lots of different apps – will need a standard to be truly effective

© 2013 IHS

What Apps Have Respondents Paid Most for on Their Smart Phones

11

45%

10%

9%

6%

5%

5%

3%

3%

2%2%

2%2%

2%1% 3%

Games Navigation Health and Fitness Business Driver aids

Sports Live traffic information Social Networking Internet television Internet radio

News Travel Weather Remote Services Others

UK - What Type of App Have Respondents Paid Most for on Their Smartphone?

Source: IHS © 2013 IHS

28%

23%

8%

7%

6%

6%

5%

4%

3%

2%2%

2% 2%2% 1%

Games Navigation Health and Fitness Business Social Networking

Others News Internet television Driver aids Live traffic information

Sports Weather Travel Internet radio Remote Services

Germany - What Type of App Have Respondents Paid Most for on Their Smartphone?

Source: IHS © 2013 IHS

© 2013 IHS

What Apps Have Respondents Paid Most for on Their Smart Phones

12

40%

12%9%

7%

5%

5%

3%

2%

2%

2%2%

2%2%

1%6%

Games Business Health and Fitness Navigation

Sports Internet radio Driver aids Weather

Internet television Live traffic information Social Networking Travel

Remote Services News Others

US - What Type of App Have Respondents Paid Most for on Their Smartphone?

Source: IHS © 2013 IHS

25%

21%

18%

6%

6%

5%

4%

3%

3%3%

1%1%1% 1%

Business Games Navigation Live traffic information

Driver aids Health and Fitness Internet television News

Remote Services Social Networking Internet radio Travel

Weather Sports Others

China - What Type of App Have Respondents Paid Most for on Their Smartphone?

Source: IHS © 2013 IHS

© 2013 IHS

How Often do Users Use Web Radio in the Car?

13

UK

US

Ger

man

y

Chi

na

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Whenever I'm in the car Frequently (3-5 times a week) Occasionally (1-2 times a week) Never

Country

Per

cent

age

of R

espo

nden

ts

How Often do Respondents Who Have Access to Internet Radio in Their Car Listen to it? - By Country

Source: IHS © 2013 IHS

© 2013 IHS

Would Users Prefer to Have Embedded Navigation or Smartphone Based Navigation?

14

UK

US

Ge

rma

ny

Ch

ina

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

App on smartphone Embedded in car's dashboard/head unit Others

Country

Pe

rce

nta

ge

of

Re

sp

on

de

nts

Would Respondents Prefer to Have Navigation and/or Traffic Apps on Their Smartphones which can be Connected to Their Car or Already Embedded in the Head unit? - By Country

Source: IHS © 2013 IHS

© 2013 IHS

What Apps do Users Use Most Regularly in the Car?

15

18%

13%

10%

6%6%6%

5%

4%

3%

3%

28%

Google Maps/Navigation Facebook Mail for Outlook Facebook Pages Manager Candy Crush Angry Birds Adobe Reader BBC News TomTom Twitter Others

UK - Please Rank Your Top 3 Apps in Terms of Frequency of Use on Your Smartphone Whilst in the Car

Source: IHS © 2013 IHS

16%

14%

10%

10%5%8%

4%

4%

4%

4%

21%

Google Maps/Navigation What'sApp Messenger Facebook Adobe Reader wetter.com NAVIGON GPS Navigation 2 Facebook Pages Manager YouTube Angry Birds Others

Germany - Please Rank Your Top 3 Apps in Terms of Frequency of Use on Your Smartphone Whilst in the Car

Source: IHS © 2013 IHS

© 2013 IHS

What Apps do Users Use Most Regularly in the Car?

16

12%

10%

10%

9%

6%6%

5%

4%

4%

4%

30%

Tencent WeChat/Tencent QQ Mail for Outlook AutoNavi Navigation Baidu Map Navigation Quickoffice Angry Birds Careland Navigation Navigation Dog QQ Music Plants vs. ZombiesOthers

China - Please Rank Your Top 3 Apps in Terms of Frequency of Use on Your Smartphone Whilst in the Car

Source: IHS © 2013 IHS

16%

11%

9%

9%

7%5%5%

3%2%

2%

30%

Google Maps/Navigation Facebook Pandora Candy Crush Facebook Pages Manager Angry Birds Adobe Reader TomTom - Eco Routes

Document Free (Mobile Office Suite) iHeartRadio/iHeartAuto Others

US - Please Rank Your Top 3 Apps in Terms of Frequency of Use on Your Smartphone Whilst in the Car

Source: IHS © 2013 IHS

© 2013 IHS

Is Privacy an Issue for Consumers?

17

UK

US

Ger

man

y

Chi

na

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Want app usage information to remain private Be willing to share app usage information in exchange for free services Not sure

Country

Per

cent

age

of R

espo

nden

ts

Would Respondents Mind if Information from Their Car Apps Was Used By Car Makers, Dealers, etc. in Exchange for Free Services? - By Country

Source: IHS © 2013 IHS

© 2013 IHS

Would Respondents Still Buy a New Car if it Didn’t Offer Apps?

18

Male Female0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

No, would not affect my decision, would still buy the carYes, even if all the vehicles I was considering had some available apps, I would have a strong pref-erence for the vehicle with the most, or best selec-tion of appsYes, would affect my decision, would reconsider buyingYes, would affect my decision, would not buy the car

© 2013 IHS

Downsides to Apps in Automotive for Developers

• Cost to integrate multiple SDKs.

• Lack of direct revenue opportunities.

• Loss of branding.

• Slower update cycles.

• Limits on usability and increased time and cost to create a “safe” HMI.

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© 2013 IHS

Benefits for App Developers for Apps in the Car

• Brand awareness?

• Drive more customers to your place of business / smart phone app?

• Direct revenue from app sales / vehicle manufacturer?

• Advertising?

• Others?

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© 2013 IHS

Panel – Automotive Apps Harnessing Car Connectivity

• Moderator – Jack Bergquist, Senior Analyst, IHS Automotive

• Ralf Hug – Consultant, Trajectory Group

• Theo Kamalski - Manager Regulatory Affairs and Patent Engineer Business Unit Automotive

• Robert Hrabak – Connectivity Specialist, General Motors

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