Distortion of "Fast Clockspeed" Product Development:
Using Web-based Conjoint Analysis, Clockspeed Analysis and Technology
Strategy for an Automotive Telematics System
by
Sean M. Newell
M., Electrical Engineering, University of Detroit Mercy (1995)
B., Electrical Engineering, University of Detroit (1992)
Submitted to the System Design and Management Program
in Partial Fulfillment of the Requirements for the Degree of
Master of Science in Engineering and Management
at the
Massachusetts Institute of Technology
February 2001
C Sean M. Newell. All rights reserved.
The author hereby grants to MIT permission to reproduce and to distribute
publicly paper and electronic copies of this thesis document in whole or in part.
Signature of Author:
System Design and Management Program
January 2, 2001
X7
Certified by:
Ely Dahan
Thesis Supervisor
Assistant Professor, Sloan School of Management
Accepted by:_______________
Steven C. Graves
LFM/SDM Co-Director
Abrpam Siegel Professor of Management
Accepted by:
Paul A. Lagace
LFM/SDM Co-Director
Professor of Aeronautics & Astronautics and Engineering Systems
MASSACHUSETTS INSTITUTE
OF TECHNOLOGY
AUG 0 1 2002
LIBRARIES
BARKM
ACKNOWLEDGEMENTS
I want to thank the management of Ford Motor Company, especially Cary Wilson, Chuck
Teske, and Tim Donovan, for supporting my efforts in the System Design and Management
program. I greatly appreciate the constant support of my supervisor, Chuck Rodgers. I also
thank the many engineers and marketing personnel from Ford, General Motors, Wingcast,
Visteon, Motorola, Alpine, Alps, Nokia, and ATX Technologies who found the time to
contribute to this research.
I owe a debt of gratitude to my friends and colleagues of the System Design and
Management program without whose critical thinking, lively classroom discussions, and zest for
life this program would not be as exceptional and prominent as it is today. Thank you for
sharing your ideas and helping shape my vision of the future.
My sincere gratitude goes to Ely Dahan, who graciously accepted yet another SDM thesis
candidate even though his advising plate was already quite full. Professor Dahan's positive
attitude, openness to new ideas, and strong pedagogical influence are key factors in my decision
to explore this exciting research.
I thank my parents for instilling in me a great appreciation of education and for always
showing their pride in the academic accomplishments of their children. I thank my young
children, Hannah and Ryan, for trying to understand why Daddy always seemed to be going to
Boston. Your smiles, hugs, and kisses meant so much to me as I learned about optimal product
design and NPV and you learned your colors and ABCs.
Most of all, I give my deepest thanks to my wife, Jenny. Thank you for managing
everything around the house for two years so that I could go to MIT, for being my best friend
and for doing all the wonderful things you do.
Jenny, I dedicate this thesis to you.
2
BIOGRAPHY
Sean M. Newell has 10 years of work experience in automotive engineering at Ford
Motor Company and General Motors Corporation. He currently is the Electrical Launch Leader
and Lead Electrical Systems Engineer for the Taurus/Sable vehicle line at Ford. Previous
assignments include product engineering, quality engineering, design engineering, computer
aided engineering, and manufacturing. In 1997, he jointly received patents in the U.S. and
Europe for a "Two-Step Power Door Locking System and Method of Operation."
Mr. Newell received his bachelor's degree in electrical engineering at the University of
Detroit in 1992 with honors. In 1995, he obtained his master's degree in electrical engineering at
the University of Detroit Mercy with honors. He currently serves on the advisory board for the
College of Engineering & Science at the University of Detroit Mercy.
3
Distortion of "Fast Clockspeed" Product Development:
Using Web-based Conjoint Analysis, Clockspeed Analysis and Technology Strategy
For an Automotive Telematics System
by
Sean M. Newell
Submitted to the System Design and Management Program
in Partial Fulfillment of the Requirements for the Degree of
Master of Science in Engineering and Management
ABSTRACT
Telematics, a new technology, highlights the acceleration occurring in the automotive electronics
industry's rate of technological change or "clockspeed." A major element of mobile multimedia,
telematics is the convergence of telecommunications and information technology within the
vehicle, enabling the seamless transport of information that provides various services to and from
the vehicle or mobile communication devices. Fast clockspeed products like telematics demand
extremely quick and timely concept selection and product development. Existing
electrical/electronic product development processes are designed to interface with the slower
development of the vehicle as a whole. This often results in conflict and a compromise of speed
and innovation for electrical/electronic features. Telematics is an excellent example of an
exciting technology that does not fit into the automotive product development process.
The research identifies weaknesses in existing product development for telematics and suggests a
methodology that includes three tools that help address these shortcomings. First, telematics
product development must incorporate web-based conjoint analysis that enables more frequent
and efficient market research. Second, clockspeed analysis is needed to measure the acceleration
of change occurring in electrical/electronic products, assess the impact of modularity, and
identify power shifts in the supply chain. The personal computer industry is used as a
comparator. Third, technology strategy analysis of telematics and the emerging standardization
of vehicle electrical/electronic architecture highlights the creation and capture of customer value
through strategic designs. The use of these tools will cause a distortion in the strategic planning,
concept development, and system design of a telematics system. The methodology suggests the
correct phases of the product development process to incorporate the new information these three
methods of analysis provide. A framework for handling conflicting information from the three
methods is also proposed. Finally, the author predicts the diffusion rate of select telematics
features and components for the North American market.
4
TABLE OF CONTENTS
ACKNOWLEDGEMENTS ......................................................................................................
2
BIOG RA PHY ................................................................................................................................
3
A B STR A C T ...................................................................................................................................
4
TABLE OF FIGURES ..................................................................................................................
7
TABLE OF TABLES ....................................................................................................................
8
CHAPTER 1. INTRODUCTION...............................................................................................
9
9
1. 1 M O TIV A TION .........................................................................................................................
1.2 DIFFICULTIES OF INTEGRATING FAST CLOCKSPEED PRODUCTS INTO AUTOMOBILES ............ 9
10
1.3 R ESEARCH A PPROACH .........................................................................................................
II
1.4 FOCUS AND C ONTRIBUTIONS ...............................................................................................
12
CHAPTER 2. TELEMATICS OVERVIEW...........................................................................
12
12....
2 .1 IN TRO D U CTION ..............................................................................................................
14
16
18
19
2.5 TELEM ATICS ORGANIZATIONS...........................................................................................
20
2.6 MARKET AND TECHNICAL UNCERTAINTY OF TELEMATICS ..............................................
..... 21
2.7 TELEMATICS SUM M ARY ..........................................................................................
2.2 CURRENT TELEMATICS SERVICES.....................................................................................
2.3 POTENTIAL FUTURE TELEMATICS SERVICES........................................................................
2.4 COMPANIES OFFERING TELEMATICS SYSTEMS .................................................................
23
CHAPTER 3. RESEARCH HYPOTHESIS & METHODOLOGY .................
3.1 INTRODUCTION ...................................................................
3.2 RESEARCH HYPOTHESIS .....................................................................
3.2.1
3.2.2
3.2.3
3.2.4
----------------------..........................
23
24
Generic ProductDevelopment ProcessAnalysis......................................................
New Market Research Requirements Neededfor Fast Clockspeed Products...........
Clockspeed Analysisfor Telematics is Crucialbut Lacking....................................
Technology Strategy is Required to Capture Value through Standards...................
3.3 RESEARCH METHODOLOGY ....................................................
24
26
31
35
36
CHAPTER 4. PRODUCT DEVELOPMENT PROCESS: AUTOMOTIVE EXAMPLE. 39
.
4.1 INTRODUCTION ....................................................
4.2 PLANNING PHASE .........................................................
4.2.1
4.2.2
4.2.3
4.2.4
----------------------------..................................
-------------------------............................
... ..... ... .....
CorporateStrategy................................................................
Vehicle Timing Plan......................................................................
System s EngineeringProcess....................................................................................
Customer Needs Assessm ent ....................................................................................
39
39
40
41
42
44
50
4.3 TELEMATICS CONCEPT DEVELOPMENT ..................................................................
4.4 SYSTEMS DESIGN - TELEMATICS INTEGRATION INTO ELECTRICAL/ELECTRONIC SYSTEM
55
- - - --......................................................-----ARCHITECTURE .....................................................-
4.4.1 MechanicalPositioningof Components ...................................................................
5
55
4.4.2 Open versus Closed Architectures.............................................................................
4.4.3 The Trend Toward Modularity..................................................................................
4.5 PRODUCT DEVELOPMENT PROCESS SUMMARY..................................................................
57
58
59
CHAPTER 5. WEB-BASED CONJOINT ANALYSIS..........................................................
61
5.1 IN TRO D U CTION .....................................................................................................................
5.2 WEB-BASED CONJOINT ANALYSIS TEST DEVELOPMENT ..................................................
5.3 WEB-BASED CONJOINT ANALYSIS TESTING PROCESS ......................................................
5.4 WEB-BASED CONJOINT ANALYSIS SUMMARY .................................................................
61
62
64
67
CHAPTER 6. CLOCKSPEED ANALYSIS USING THE PERSONAL COMPUTER
INDUSTRY AS A COMPARATOR .........................................................................................
69
6.1 IN TR O D U CTION .....................................................................................................................
69
6.2
6.3
6.4 SUPPLY C HAIN D ESIGN ........................................................................................................
6.5 CLOCKSPEED ANALYSIS SUMMARY...................................................................................
70
71
CLOCKSPEED MEASUREMENT OF CONSUMER AND AUTOMOTIVE ELECTRONICS..............
MODULARITY AND PRODUCT ARCHITECTURE .................................................................
73
78
CHAPTER 7. TECHNOLOGY STRATEGY ANALYSIS FOR STANDARDS-DRIVEN
80
MA R KET S ..................................................................................................................................
7.1 IN TR OD U CTION .....................................................................................................................
7.2 TECHNOLOGY LIFE CYCLES AND S-CURVES .....................................................................
7.3 VALUE CREATION THROUGH STANDARDS ..........................................................................
7.4 ESTABLISHING STANDARDS..............................................................................................
7.5 EXPLOITING STANDARDS..................................................................................................
7.6 TECHNOLOGY STRATEGY SUMMARY.................................................................................
80
80
83
84
87
89
CHAPTER 8. DISTORTION OF THE PRODUCT DEVELOPMENT PROCESS..... 90
8.1
8.2
8.3
8.4
IN TRO D UCTION .....................................................................................................................
TOOLS - NEW INFORMATION PROVIDED ...........................................................................
TIMING - WHEN TO CONSIDER NEW INFORMATION ..........................................................
TRADEOFFS - HANDLING CONFLICTING INFORMATION....................................................
90
90
93
94
CHAPTER 9. CONCLUSION..................................................................................................
98
9 .1 C ON CLU SION .......................................................................................................................
9.2 P RED ICTION S .......................................................................................................................
98
99
9.3 SUGGESTIONS FOR FUTURE STUDY ....................................................................................
102
APPENDIX - TELEMATICS AND AUTOMOTIVE TERMINOLOGY ............
106
6
TABLE OF FIGURES
Figure 1 - Telem atics System Overview ....................................................................................................
14
Figure 2 - Generic Product Development Process................................................................................
24
Figure 3 - Virtual Customer Research Exploits 3-Dimensions of the Web Adopted from Dahan & Hauser
29
(2 0 0 0 ).................................................................................................................................................
Figure 4 - User Interface for Virtual Concept Testing of Crossover Vehicles......................................
Figure 5 - Clockspeed of Telematics, Consumer and Communication Electronics...............................
Figure 6 - Double Helix Model of Industry Dynamics Adopted from Fine (1998)................................
Figure 7 - Mainframe Supply Chain for Integral Architecture Adopted from Fine (1998)..................
Figure 8 - Personal Computer Supply Chain for Modular Architecture Adopted from Fine (1998).........
Figure 9 - Technology Life Cycle Adopted from Henderson (1999)...................................................
Figure 10 - R esearch M ethodology............................................................................................................
Figure 11 - Focus on Initial Three Phases of Product Development.....................................................
Figure 12 - Automotive Vehicle Timing Plan Milestones......................................................................
Figure 13 - System s Engineering "V" Process .......................................................................................
Figure 14 - Program Timing and Systems Engineering "V" Overlay.......................................................
Figure 15 - Wingcast Telematics Survey Questionnaire Sample..........................................................
Figure 16 - ATX Telematics Services Customer Preference Survey....................................................
Figure 17 - Telematics Integration into Systems Engineering "V" Process...........................................
Figure 18 - Telematics System Concept Block Diagram...........................................................................
Figure 19 - Display Concepts: Text, External PDA, and Graphic-capable Screen.................................
Figure 20 - Packaging of megaCar Telematics Components.................................................................
Figure 21 - Block Diagram of Open Vehicle Network with Customer Gateway..................................
Figure 22 - AMI-C Physical Topology of Automotive Electronic Network..........................................
Figure 23 - Scenes from Telem atics V ideo Clip........................................................................................
Figure 24 - Card Example of Web-based Conjoint Test........................................................................
Figure 25 - Twelve-card Selection Process User Interface for Crossover Vehicle Test.........................
Figure 26 - Clockspeed Differences between Vehicles and Electronics................................................
Figure 27 - Clockspeed Effect on Telematics Customer Value Adopted from Ito (2000)....................
Figure 28 - Make versus Buy Decision Matrix Adopted from Fine......................................................
Figure 29 - Telematics Electronics Supply Chain Example...................................................................
Figure 30 - Telematics Services Supply Chain Example........................................................................
Figure 31 - IBM Personal Computer Supply Chain Adopted from Fine (1998)..................
Figure 32 - Automotive Telematics Supply Chain Example.................................................................
Figure 33 - Telematics Technology Life Cycle.....................................................................................
Figure 34 - U sing S-curves for Telematics............................................................................................
Figure 35 - Customer Adoption or Diffusion Curve...............................................................................
Figure 36 - S-curve Effect for Standard-Driven Products .....................................................................
Figure 37 - Capturing Value from Standards Adopted from Murray (1999)..........................................
Figure 38 - Telematics Technology Life Cycle and S-Curve Integrated Analysis.................................
Figure 39 - Proposed Usage of Web-based Conjoint Analysis...............................................................
Figure 40 - Proposed Usage of Clockspeed Analysis and Technology Strategy....................................
Figure 41 - Three Methods of Distortion and Influence Sources ..........................................................
7
31
32
33
34
35
36
38
39
42
43
44
46
47
49
51
53
56
58
59
65
66
67
70
71
75
76
76
77
77
81
82
86
87
88
89
93
94
95
TABLE OF TABLES
&
Table 1 - Current and Potential Telematics Service Offerings .................................................
17
Table 2 - How Virtual Customer Research Exploits Web Technology Adopted from Dahan
H auser (2 00 0)........................................................................................................................
30
Table 3 - Concept Alternatives for Telematics Components ...................................................
52
Table 4 - Customer and Engineering Attributes for Telematics ..............................................
54
Table 5 - Benefits of AMI-C Architecture Adopted from Robinson (2000) ........................... 84
Table 6 - Key Engineering Attributes Identified by Clockspeed Analysis ............................... 91
Table 7 - Key Engineering Attributes Defined by Technology Strategy ................................. 92
Table 8 - Projections of Telematics Components for North America........................................
102
8
CHAPTER 1. INTRODUCTION
1.1 Motivation
Many firms grapple with increasing the efficiency and effectiveness of the product
development process, particularly with new products that involve rapidly changing technologies.
Telematics is an example of the acceleration occurring in the automotive electronics industry's
rate of technological change or "clockspeed." A major element of mobile multimedia, telematics
is the convergence of telecommunications and information technology within the vehicle,
enabling the seamless transport of information that provides various services to and from the
vehicle or mobile communication devices. Developing the dominant telematics system will
require speed, flexibility, and efficiency.
Current telematics systems, however, are developed within the framework of existing
vehicle product development processes. Fast clockspeed product development teams have
difficulties meeting all the timing, cost, and customer satisfaction objectives in the confines of
the existing paradigm. Often, this results in conflict and a compromise of speed and innovation
in electrical/electronic features.
1.2 Difficulties of Integrating Fast Clockspeed Products into Automobiles
Fast clockspeed products such as telematics demand extremely rapid and accurate
concept selection and product development processes. Much research has been done to speed up
the development of new products (Wheelwright & Clark, 1992; Urban & Hauser, 1993;
Reinertsen, 1997; Smith & Reinertsen 1998; Cusumano & Nobeoka, 1998; Wood & Otto, 2000).
However, existing electrical/electronic product development processes are designed to interface
9
with slower, overall vehicle product development process. There is no research that covers this
area of product development.
Electronic components can go through several design and life cycles during the
development of a single vehicle. The standardized and sequential process of design,
development, and testing for all vehicle systems and components can cause risky late changes or
overly conservative designs. Vehicle teams often find conflict resulting from inconsistencies
between customer wants and engineering discipline. Telematics is an excellent example of an
exciting technology that does not fit into the automotive product development process.
1.3 Research Approach
This thesis approaches the product development process from the participant's viewpoint
to understand issues of designing and building fast-changing electronics within an automotive
development cycle. A literature search focusing on the early phases of the development process
was conducted. Product development, market research tools, and strategic management
techniques were examined. Chapter 2 provides an overview of telematics. Chapter 3 reviews
the research hypothesis that identifies weaknesses in existing product development for telematics
and suggests a methodology that includes three tools to address these shortcomings. Chapter 4
provides an automotive product development case example to baseline existing telematics
development processes. Chapter 5 discusses the concept of web-based conjoint testing, a virtual
customer market research tool that enables more frequency and efficiency. Chapter 6 provides a
clockspeed analysis that measures the acceleration of change of electrical/electronic products,
assesses the impact of modularity, and identifies potential power shifts in the supply chain. The
personal computer industry is used as a comparator. Chapter 7 suggests a technology strategy
for telematics and the emerging standardization of vehicle electrical/electronic architecture to
10
illustrate strategic design and economic implications. Chapter 8 integrates the use of those tools
causing a distortion in the existing strategic planning, concept development, and system design
of a telematics system. The chapter also suggests where in the development process to
incorporate the new information provided by these three analyses and offers a framework for
handling conflicting information from the three methods. Finally, in chapter 9 the author
predicts the diffusion rate of selected telematics features and components for the North American
market.
1.4 Focus and Contributions
The focus of this research is on identifying and elaborating on new tools for an
automotive product development team tasked with incorporating advanced, fast clockspeed
products. The research does not attempt to formulate a product development process completely
or to be prescriptive. This thesis analyzes an existing automotive product development process
and works out methods to improve it. The contribution is a sound and useful framework of stateof-the-art market research tools, clockspeed analysis, and technology strategy within the context
of an automotive design cycle.
11
CHAPTER 2. TELEMATICS OVERVIEW
2.1 Introduction
In the United States, people spend an estimated 500 million passenger hours per week or
25 billion hours per year in their vehicles.' Customers wish to be seamlessly connected at home,
office, on foot, and in the vehicle and are purchasing cellular phones, pagers, and personal digital
assistants (e.g., Palm Pilots@) to achieve this, yet no integrated product ties together these
information and communication services. Telematics is the automakers' solution to this
customer need.
This section defines telematics and reviews the technology and infrastructure required for
its delivery. Section 2.2 describes the telematics services found on the market today. In section
2.3, telematics concept vehicles and potential future services are discussed. Section 2.4 covers
telematics' competitive landscape, including automakers, suppliers, infrastructure providers, and
aftermarket companies. Section 2.5 highlights the organizations establishing telematics
standards and the member companies. Section 2.6 provides insight into market and
technological uncertainty about telematics. Section 2.7 summarizes the chapter.
Telematics brings together elements of telecommunications and the Internet to the
vehicle. As part of mobile multimedia and infotainment, telematics fits into the network and
digital media category; many believe it will radically change the automotive market. Other
segments of mobile multimedia include systems for navigation, sound and visuals, networking
and digital media, and human interface. Telematics is an in-vehicle, wireless, two-way voice and
data communication technology with the capability of determining the location of your vehicle
'Goldman Sachs investment research estimate (January 2000)
12
and that relies on elements from the navigation and human interface (i.e., voice recognition)
segments.
Several major infrastructure elements are required to develop and distribute telematics
services.
*
Content aggregation/generation
"
Services delivery/consumer care
*
Airtime transmission
"
In-vehicle hardware
*
Human machine interface
Content providers such as Yahoo or CNN generate information that can be filtered per customer
preferences. The call center infrastructure provides information and services through operator
conversation and wireless (e.g., cellular) data links. Carriers like Sprint and Verizon are needed
to provide the airtime transmission between the vehicle and the call center.
The telematics subsystem residing in the vehicle handles the voice input, audio output,
and visual displays and functions as a wireless communication link. Current telematics systems
generally use hands-free, voice-operated, cellular communication devices, a global positioning
system (GPS), text displays (e.g. radio) and possibly a satellite receiver all built into the vehicle.
Typically, the customer pushes a button and the telematics system sends vehicle-specific location
data to a customer service representative at a call center available 24 hours a day. Depending on
the type of service requested, a customer service representative or an automated system would
handle the request. A typical telematics system is represented in the following figure.
13
Figure 1 - Telematics System Overview
2.2 Current Telematics Services
Currently available services found in vehicles equipped with telematics include:
Roadside Assistance: A customer service representative determines the customer's
vehicle location through GPS and dispatches a service vehicle for towing, fuel delivery, or to
change a flat tire.
Route Guidance: A customer service representative gives directions to a desired
destination.
Traffic Information: Customers can request up-to-date traffic alerts for profiled routes
while traveling or via the Web before the trip begins.
Inbound E-Mail: Customers can access e-mail accounts and request inbound mail to be
read (converted from text to automated speech) to them.
14
Personalized Information Services: Select personal information including news, weather,
sports, and stock portfolio updates can be requested through an operator and displayed in the
vehicle.
Voice-Activated Communication: Hands-free operation of the communication device
through voice commands, such as saying numbers aloud for automatic dialing or a name for
dialing pre-programmed numbers.
Emergency Assistance: Occupants can call a customer service center for emergency
services in the event of an accident or medical emergency.
Automatic Airbag Notification: In the event the airbags deploy, a customer service
representative automatically contacts the occupants to determine the nature of the emergency.
Fire rescue, ambulance, or police are dispatched to the vehicle's location as required.
Location-Based Points-of-Interest: A customer service representative can use GPS to
help the customer locate the nearest gas station or a nearby restaurant. Points of interest include
ATMs, hotels, banks, golf courses, movie theaters, etc.
Stolen Vehicle Locator: The customer service representative can help the customer find
the vehicle if it is stolen or assist if the driver is lost.
Remote Vehicle Diagnostics: Dealerships receive electronic diagnostic codes from the
vehicle to help them identify necessary repairs. They can also send updated software
calibrations.
Vehicle Find/Alert: Customers who need help finding their vehicle in large parking lots
can call the customer call center, which will send an electronic message to the vehicle "telling" it
to flash its headlights and taillights and activate the horn so the customer can find it.
15
Concierge Service: A customer service representative will make travel or dinner
reservations, order sports tickets, send flowers, etc. upon request.
2.3 Potential Future Telematics Services
In addition to the services entering the market today, many automotive experts predict the
emergence of advanced telematics services. Examples of advanced telematics services can be
found in concept cars such as the Network Vehicle from Delphi Automotive and the megaCar
from megaCar AG. These vehicles have features and capabilities that not long ago would be
found only in a James Bond film. The Network Vehicle can capture satellite broadcasts, receive
DirecTV@ and DirecPC@ data at 400 kbps, uses IBM speech recognition for hands-free control,
and incorporates Sun Microsystems Java@ API (application programming interface). The
megaCar comes equipped with an Internet personal computer with Pentium Ill
500MHz
processor, Windows NT@, and a 17.3" flat panel display. It also has peak mobile 150 kbps
online connectivity, real-time videoconferencing at up to 30 frames/sec, and high fidelity audio.
The vehicle even has screens for passengers in the rear seats that can display movies or video
games.
Other emerging services include automatic location-based traffic warnings, automatic
points of interest information for vacationers, inbound/outbound email that can be read to the
driver, web-page access, personal digital assistant (PDA) synchronizing of phone, address, and
calendar information with the vehicle to do hands-free phone calls and provide navigation
directions. Bluetooth technology is predicted to be a great enabler for wireless communication
of consumer electronics with the vehicle. A short range (< 10 meters) wireless protocol,
Bluetooth allows information transfer between willing devices. Bluetooth-enabled devices like
cell phones, PDAs, and laptops are widely expected to enter the North American market in 2001.
16
Radio frequency identification technology will also be available to provide location-based
information (e.g., construction zones, icy road conditions) to the vehicle.
Telematics companies are also becoming interested in position-commerce (p-commerce),
the next generation of e-commerce. Electronic financial transactions and marketing information
exchanges are tailored to the consumer's profile and location. For example, a driver could ask
her telematics system for an email or pager notification as soon as she is within five miles of a
particular store that carries the new Palm Pilot® XI. The customer call center operator or
automated server would enter this request and send her an alert when she is near a Best Buy store
that has the item on sale. Best Buy may offer her an additional 5% off the purchase price if she
purchases it within the next hour as part of their p-commerce marketing promotion.
Telematics services can be grouped into five categories: safety, security, productivity,
convenience, and entertainment. The following table lists some of the services, how they are
grouped in the five categories, and gives a relative time scale for their introduction to market.
Table 1 - Current and Potential Telematics Service Offerings
Time
Safety
Security
Productivity
Convenience
Entertainment
- Stolen Vehicle
- Route
-Concierge
- Streaming
Tracking
Guidance
Service
Web Video
- Automatic
- Remote Door
- Phone/fax
- Position-
- Online games
Airbag
Notification
Unlock
- Vehicle Alert
- Email/Voicemail
commerce
- Fast Pass
- Satellite Radio
- Roadside
Assistance
toboothc
- Home
- Personalized
Information
Services
Security/
- Remote
Lighting Control
Diagnostics
/
- Emergency
Assistance
- Automatic
Traffic Warnings
17
2.4 Companies Offering Telematics Systems
The first generally recognized automotive original equipment manufacturer (OEM)
application of telematics is the RESCU@ (Remote Emergency Satellite Cellular Unit) system,
offered on Lincoln Continentals since the 1995 model year. A first-generation telematics
system, RESCU provided only airbag notification and basic operator-assisted services. With a
price tag of over $2000, the system had very small market penetration. Ford Motor Company
has recently pledged to install its next generation of the RESCU telematics system in all Lincoln
vehicles in 2001. Ford will also be offering telematics in its Jaguar brand vehicles via the Jaguar
Assist system.
General Motors brought its first generation of telematics system to the broader
automotive market with Onstar@ in 2000. Recently, GM announced that Onstar® would be
available on the majority of its 2001 vehicles. Current pricing for GM's Onstar@ services is
$199 per year for a basic safety/security package. Some of GM's vehicle brands, such as upscale
Cadillac, are offering the service free for one year. Onstar@ comes as standard equipment on
most 2001 GM vehicles, and prices will likely reflect some of the additional cost of telematics
components. A dealer-installed option will cost $695 plus labor.
Several other automakers have already introduced or announced plans to introduce
telematics, including DaimlerChrysler, Toyota, Honda, and Nissan. Currently, most telematics
systems are being rolled out on premium or luxury brands, such as GM's Cadillac, Ford's Lincoln
and Jaguar, DaimlerChrysler's Mercedes, and Toyota's Lexus. Mercedes, for example, is
offering its Tele-Aid® system on all its cars and trucks for 2001. Mid- and entry-level vehicles
18
are expected to follow within a few years, sooner for companies like GM and Ford, who are very
aggressively moving into telematics.
The automotive electrical/electronics suppliers developing these telematics systems
include Visteon, Delphi, Motorola, Siemens, Alpine, Bosch, Nokia, and Denso. Aftermarket
telematics systems are also available, including Microsoft's Auto PC@ and Alpine's May Day@
system.
Customer call center companies serving the North American market include ATX
Technologies, GM's Onstar®, American Automobile Association (AAA), Cross Country Group,
and a joint venture between Ford and Qualcomm tentatively called Wingcast. Other automotive
OEMs, such as Toyota and Honda, have announced agreements to use telematics services from
ATX, Onstar@, and Wingcast for vehicles sold in North American markets. As with the Jaguar
Assist system, which relies on ATX for call center service, each automotive OEM will probably
try to brand its own version of telematics service regardless of which company provides it.
Automakers aligning with GM's Onstar@ may have difficulty in achieving this, however,
because of the marketing and name recognition of the Onstar@ brand.
2.5 Telematics Organizations
The Automotive Multimedia Interface Collaboration (AMI-C) is a worldwide
organization of vehicle manufacturers and suppliers that was created to facilitate the
development, promotion, and standardization of electronic gateways for automotive multimedia
and telematics. AMI-C was founded in 1999 to develop a set of common specifications for a
multimedia interface for vehicle electrical/electronic systems. The auto companies or affiliates
participating in AMI-C are numerous: BMW, Daimler Chrysler, Fiat Auto, Ford, GM, Honda,
19
Mitsubishi, Nissan, PSA Peugeot Citroen, Renault, Toyota, and Volkswagen. Together these
companies produce over 95% of the world's automobiles. The goals of AMI-C are to:
" Provide a convenient method for consumers to use their consumer and
communications devices in the automotive environment.
" Foster innovation of new features by creating a stable and uniform hardware and
software interface in the vehicle.
" Reduce time to market and facilitate upgrades of evolving vehicle electronics.
*
Support deployment of telematics by defining specifications for the telematics and
information interfaces between the vehicle and the outside world.
*
Decrease relative costs of vehicle electronic components.
*
Improve the quality of vehicle electronic components through reduction in
variations.
Initially, AMI-C is focusing on navigation, telematics, and information.
2.6 Market and Technical Uncertainty of Telematics
The telematics market is projected to have rapid growth: 2
0
2000 - $4 Billion in sales
*
2005 - $17 Billion in sales
0
2010 - $38 Billion is sales
Telematics pricing strategies are being developed and evaluated closely by the
automakers and call center companies. Automakers are hoping to generate a continual revenue
2
Source: U.S. Telematics Marketplace: Strategis Group (1999); Frost & Sullivan
20
stream from telematics subscription fees. Telematics is also expected to be a high profit-margin
product for suppliers and to help build customer relationships. Essentially, telematics can be
viewed as a mobile communications terminal allowing automakers to contact customers
throughout their ownership experience. As Steve Millstein, CEO of ATX Technologies, Inc.,
stated, "automotive OEMs who view telematics strategically rather than as just another invehicle electronics accessory understand that telematics is the linchpin to their emerging ecommerce strategies, reducing marketing expenses, better managing their relationship with their
current customers and increasing brand loyalty." 3
All the benefits and advanced features mentioned are just possibilities, however. Much
of the success of telematics depends on customer acceptance of telematics and technological
advancements in key areas. The list of potential obstacles to market growth is long. Sufficiently
valuable online content, possible regulatory issues regarding driver distraction while using
telematics, and cost are all factors that must be addressed. Technological uncertainty also
hinders the acceptance and diffusion of telematics into mainstream vehicles. Among these are
wireless communication bandwidth, speech interface to the vehicle, and a current lack of open
standards. The industry is searching for the "killer application" or group of applications that is
economically and technologically feasible and will cause demand for telematics systems to rise
dramatically.
2.7 Telematics Summary
An exciting technology expected to increase customer value and satisfaction, telematics
might radically change the way consumers use automobiles. Current and potential telematics
services cover the spectrum of safety, security, productivity, convenience, and entertainment.
3 ATX press announcement, November 2000
21
All major automotive OEMs are racing to develop the right mix of features and technology to
deliver this value to the customer. Other non-automotive competitors, most with ties to the
personal computer and software industries, are vying for a piece of this lucrative business. The
AMI-C was created to guide and develop an open standard for telematics interfaces. Successful
implementation of telematics will be a challenging task because of market and technological
uncertainty. Existing rules of business, supply chains, and product design will be broken, and
new strategies and methodologies will likely emerge.
22
CHAPTER 3. RESEARCH HYPOTHESIS & METHODOLOGY
3.1 Introduction
Developing products requires a process. People must understand and identify needs; they
must create, communicate, build and test. Each company has its own set of circumstances,
product portfolios, competitors, and other factors that result in its own product development
process. However, most product development processes are characterized by three phases:
understanding the opportunity, developing a concept, and implementing the idea (Otto & Wood,
2000). Defining the opportunity and transforming knowledge into viable concepts is
challenging. Doing it within a budget and at the optimal window of opportunity is rare.
In section 3.2 is a hypothesis defining the key areas of struggle in the telematics product
development process. Section 3.2.1 analyzes recent literature on product development processes.
Three areas of weakness in existing telematics product development processes are identified. In
section 3.2.2, the requirement for more frequent market research from customers than is provided
in the standard product development process is developed. In section 3.2.3, the importance of
clockspeed analysis to measure the acceleration of change in electrical/electronic products,
assess the impact of modularity, and identify power shifts in the supply chain is discussed.
Section 3.2.4 covers how technology strategy analysis of telematics and the vehicle
electrical/electronic architecture will give insight into the implications of standardization.
Finally, in section 3.3, a methodology is proposed to address these shortcomings in the generic
product development process.
23
3.2 Research Hypothesis
3.2.1 Generic ProductDevelopment Process Analysis
Ulrich and Eppinger (2000) break the product development process down into more
detailed phases that provide a useful baseline framework for this research. Their generic product
development process includes six phases: planning, concept development, system design, detail
design, testing & refinement, and production ramp-up. The stages are listed in chronological
order in the figure below.
Concept
Planning PDevelopmen
System
Design
Detail
Design
Testing &
Refinement
Production
Ramp-Up
Figure 2 - Generic Product Development Process
Product development can also be grouped into two categories, small-scale and large-scale
(Ulrich & Eppinger, 2000). Large-scale product development examples include airplanes,
automobiles, copiers, etc. Small-scale product development involves items such as cordless
screwdrivers and portable radios - anything where the entire development team can meet in one
room. This research includes aspects of both small- and large-scale product development. The
development of a telematics subsystem by itself can be considered small-scale. Integrating the
telematics subsystem into the vehicle, particularly into the electrical/ electronic architecture,
involves large-scale product development.
For fast clockspeed products, there is an advantage to choosing concepts as late as
possible in the automotive product development process without jeopardizing the downstream
phases.
This requires exceptional upfront planning and organizational learning. Toyota's
product development system is an excellent example of this strategy (Ward, Liker, et al., 1998).
24
By delaying decisions, Toyota believes it ultimately makes better cars. Their product
development teams explore a large number of concepts up front, and management commits the
required resources. As one Toyota manager phrased it, they "prefer lots of torpedoes to a single
sniper bullet." 4 This quote referred to vehicle styling and body design but seems very applicable
to today's fast clockspeed products. This system is inefficient in some ways, but results in recent
years have been positive. However, even Toyota's late-decision-making strategy cannot mitigate
the cost and quality risks associated with adding the latest electronics technology shortly before
vehicle production.
With so much financial risk attached to faulty designs, automakers tend to be
conservative. Products with new electronic technology often have interface issues with the rest
of the vehicle or electrical system. Examples include shock, humidity, temperature, and
electromagnetic interference. Understanding and mitigate all risk factors involved in adding a
new component is impossible, although moving from integral to modular products reduces that
risk by standardizing many of the interfaces.
According to Sethi (2000), new product quality is correlated to the customer's influence
on the product development process and information integration but negatively impacted by the
company's perceived innovation of the new product and time-to-market pressures. Information
integration among the product development team can mitigate the negative effect of the
innovativeness. Operational and organizational learning aspects explain innovation's effect on
quality. Customer input into new products is an important element of the product development
4
"The Second Toyota Paradox: How Delaying Decisions Can Make Better Cars Faster." Sloan Management
Review (1998)
25
process. Traditional market research tools often do not provide product development teams with
timely and accurate information needed for fast clockspeed products.
3.2.2 New Market Research Requirements Neededfor Fast Clockspeed Products
The automotive industry is struggling to understand the customer opportunities of fast
clockspeed features such as telematics. The increasing speed of change requires a method that
can quickly assess customer wants and translate them into engineering attributes. A company
could build a sustainable competitive advantage by developing such a methodology and
implementing a system that feeds fast clockspeed feature requirements into the product
development system earlier, more accurately and more frequently.
Current telematics marketing techniques using questionnaires and lead-user interviews
are costly and time consuming. For products like telematics, there is some question as to how
adequately questionnaires convey how the features work and what value it may provide. Text
descriptions are not an information-rich market research medium and have limitations for
explaining new technology to a broad spectrum of consumers. Lead-user interviews and focusgroup studies are more suited to advanced products such as telematics, but both have temporal
restraints that limit their usefulness for fast changing technologies.
Previous methods used to overcome issues with customer edification and understanding
of technologically advanced products, such as Information Acceleration, have demonstrated their
usefulness in product design. One notable automotive-based study (Urban, Weinberg & Hauser,
1996) evaluated the market response of General Motor's electric vehicle concept currently
marketed as the Impact. The use of Information Acceleration was complemented by traditional
marketing tools, including conjoint analysis, decision-flow models, concept evaluation, and
prelaunch forecasting models.
26
One of the main thrusts was to prepare the survey group withfuture-conditioningstimuli
in order to allow them to imagine themselves in the future. This was accomplished using video
clips showing futuristic television ads and simulated word-of-mouth testimony given by actors
portraying electric vehicle customers. Futuristic news reports on political elections, pollution
levels, and electric vehicle infrastructure were also shown in order to develop the sense of a
future vehicle market scenario; this is referred to asfull information. Other core elements of
Information Acceleration include user experience, user control, and active search. Examples of
these elements respectively include, actual test drives of a 1991 Geo Storm retrofitted with an
electric vehicle power train, allowing respondents to control the length of time they had to
review information, and allowing respondents to actively select which sources of information to
view (e.g., showroom, word-of-mouth, test drive).
Results from the Impact study correctly indicated that the electric vehicle market was not
yet ready for the product and that its introduction would not be profitable. The research authors
described the cost required to implement Information Acceleration as prohibitive for most
products. Other deficiencies include the amount of time to develop the Information Acceleration
material, particularly for fast clockspeed products. The use of virtual representation techniques
has not been widespread because of these cost and technological obstacles.
With the development of faster communication and information technologies, however,
product development teams can integrate customer input quickly and potentially at a much lower
cost. Dahan and Hauser (2000) identify three key elements of "virtual customer" market
research: communication, conceptualization, and computation/responsiveness.
Communication includes quicker interaction between respondents and the product
development team and even between the respondents themselves. Communication between the
27
product development team and respondents reduces the cost and time required to conduct market
testing. Another potential advantage includes enhanced understanding of the market test through
interactive, hyperlinked help systems.
Conceptualization utilizes the graphic capabilities of multimedia computers to depict
virtual products and their features. Product development teams can test concepts and ideas
earlier in the process and without investing in actual prototypes.
Computation/Responsiveness refers to the ability to adapt web pages to respondents
based on complex decision rules. This allows products with very many features to be considered
and computationally intensive methods such as adaptive conjoint analysis to be implemented.
Real-time computation also enables stimuli to become more interactive, dynamic, and
informative.
Six web-based methods are being implemented in a working system for commercial
product development projects (Dahan & Hauser; 2000): Web-based Conjoint Analysis, Fast
Polyhedral Adaptive Conjoint Estimation, User Design, Virtual Concept Testing, Securities
Trading of Concepts, and Information Pump. Dahan and Hauser suggest that web-based
methods differ from traditional market research in the communication, conceptualization and
computation dimensions in varying degrees.
28
A
C
0
E
E
E
0
Conceptualization
&
Figure 3 - Virtual Customer Research Exploits 3-Dimensions of the Web Adopted from Dahan
Hauser (2000)
Each virtual customer research tool can be measured according to how it exploits
communication, conceptualization, and computation. The following table describes the
respondents' tasks and identifies Dahan and Hauser's assessment of the tools' exploitation level.
29
&
Table 2 - How Virtual Customer Research Exploits Web Technology Adopted from Dahan
Hauser (2000)
0
0
CL
Method
Description of Respondents' Task
Web-based Conjoint Sort attribute-bundles by clicking on cards. To reduce
Analysis
the number of stimuli per screen, respondent presorts
into 3 piles.
Fast Polyhedral
Paired comparisons of attribute bundles. Respondent
Adaptive Conjoint clicks radio buttons to express relative preference
Estimation
between two stimuli.
User Design
An "ideal" product is configured using visual drag and
drop. Respondent trades off features against price or
performance.
Virtual Concept
"Buy" from amongst competing concepts based on
Testing
price and media-rich integrated concepts. Analyzed as
a two-attribute conjoint study.
Securities Trading
Each product concept is represented by a "security" or
of Concepts
"stock" and is bought and sold by respondents
interacting with one another. Concepts can be richly
0
E
E
0
0
U
0.
0
0
0
0.
E
0
0
M
H
L
L
M
H
L
H
M
M
H
L
H
L
M
H
L
M
depicted.
Information Pump
Players formulate questions about product concepts
and guess how others will react to their questions.
Fine-tuned so respondents think hard and tell the truth.
H = High, M = Medium, L = Low
_
Since telematics involves new and complicated features, tools that exploit the conceptualization
dimension are most applicable. This would suggest web-based conjoint, user design, and/or
virtual concept testing be used to market-test telematics. Designing a user interface that engages
a respondent and provides a clear explanation of the concept is challenging. The user interface
screen in the following figure is representative of a crossover vehicle test utilizing virtual
concept testing (Dahan & Hauser, 2000).
30
-------------Hr'~4>
I
... ....... ..
...
...
..
I
U
.
...
...
..
........ ........
S
S
.
..
...
..
..
.
..
...
...
.
.
I
.....
7.
I.
II
Figure 4 - User Interface for Virtual Concept Testing of Crossover Vehicles
For this test, eight crossover vehicles from Acura, Audi, BMW, Buick, Lexus, Mercedes,
Pontiac, and Toyota were displayed with seven physical attributes and price. Each attribute was
ranked on a 1 to 5 scale using the familiar Consumer Reports@ black and red ovals scheme.
Initial test results of vehicles currently on the market were promising, although data is very
premature.
3.2.3 Clockspeed Analysis for Telematics is Crucial but Lacking
The importance of electrical/electronic systems in the automobile and the probability that
more communication and consumer electronics will interface with the vehicle are growing every
year. With the introduction of mobile multimedia and telematics, the interface between these
external electronics and the vehicle grows in significance. Managing this interface is a key
objective for successful automakers. Clockspeed analysis is a method of understanding product
31
life cycle acceleration, modular architecture, and supply chain design to create or maintain a
competitive advantage. As Charles Fine, the originator of clockspeed analysis, put it:
"Evolutionary processes create a constant stream of new competitors, the close observations of
which can yield new insights. The faster the clockspeed, the richer the lessons book." 5
Telematics and consumer electronics development and life cycles continue to shorten,
with some products approaching 6 months. This will increase market pressure on automakers to
provide updated electronic features and to reduce exposure of obsolescence.
Dev Cycle
Life Cycle
6 - 24 months
24 - 36 months
Figure 5 - Clockspeed of Telematics, Consumer and Communication Electronics
Automakers are also feeling market pressure to develop more modular electrical/
electronic architectures that give the seamless voice and information connectivity that
consumers' desire. The AMI-C is developing an open, modular architecture that automakers can
use to provide this service to customers. The architecture specifies components using standard
physical interfaces; therefore, hardware components can be easily added, upgraded, or removed.
Automakers compare this approach to that of the "successful" personal computer architecture
that emerged in the 1980s. The standardized and open personal computer architecture supported
easy changes to software and hardware for upgrades, repairs, additional applications, and device
controls. Fine (1998) proposes that market and technological pressures lead to a cycle of integral
product architectures and vertical industries to modular architectures and horizontal industries
5
Clockspeed, p. 215 (1998)
32
and then back again. This cycle follows a double-helix model, and the clockspeed of the
industry determines the length of time it takes to complete the cycle.
INTEGRAL
VERTICAL
PRODUCT
INDUSTRY
PRESSURE TO
DIS-INTEGRATE
MODULAR PRODUCT
HORIZONTAL INDUSTRY
PRESSURE TO
INTEGRATE
Figure 6 - Double Helix Model of Industry Dynamics Adopted from Fine (1998)
Lessons from the computer industry's shift to open architecture and modular components might
give insight into the design and development of future automotive electronic systems.
International Business Machines (IBM), Digital Equipment Corporation (DEC), and most
of their competitors (referred to as BUNCH) 6 in the early 1970s had a vertical supply structure;
they designed and manufactured the microprocessors, circuit boards, chassis, and software. The
market focus was on mainframe computers, which had integral product architectures.
Components and software from IBM would not work in a machine from DEC.
6 BUNCH stands for Burroughs, Univac, National Cash Register (NCR), Control Data, and Honeywell.
33
IBM
DEC
BUNCH
Microprocessors
X
X
X
Operating Systems
X
X
X
Peripherals
X
X
X
Application Software
X
X
X
Network Services
X
X
X
Assembled Hardware
X
X
X
Figure 7 - Mainframe Supply Chain for Integral Architecture Adopted from Fine (1998)
IBM was a dominant force in mainframe computers but found itself behind Apple
Computers in realizing the potential of the new personal computer market. IBM developed an
open architecture for its IBM PC launched in 1981 based on standards and components that were
widely available. IBM also brought in outside suppliers to design and develop key components
and began using existing retail distributors (e.g., Sears) to reduce investment. This allowed
others, particularly Intel and Microsoft, to become extremely important elements in the value
chain for microprocessors and software respectively.
IBM's strategy improved its speed to market, launching the PC in only 15 months.
However, this strategy proved to be a disastrous supply chain design where IBM was dependant
on key engineering knowledge and components and suppliers were able to pursue new
customers. Ultimately this paved the way for companies such as Compaq and Dell to produce
IBM clones. IBM's market value following the implementation of this outsourcing model
dropped by over $90 billion. The market value of Intel and Microsoft increased by multiples of
that figure.
34
Microprocessors
Intel
Motorola AMD etc.
Operating Systems
Microsoft
Macintosh
Peripherals
Application Software
Network Services
Assembled Hardware
Hewlett Packard
Microsoft
Epson
Lotus
Dell
etc.
etc.
Novell
etc.
EDS
Netscape
AOL
Compaq
Seagate
Unix
IBM
HP
etc.
Figure 8 - Personal Computer Supply Chain for Modular Architecture Adopted from Fine (1998)
Automakers need to be aware of the lessons learned from IBM's personal computer supply chain
design and the move to a modular architecture.
3.2.4 Technology Strategy is Required to Capture Value through Standards
With the market and technological uncertainty of telematics and the emergence of a
standardized AMI-C architecture, companies need to understand the economics consequences
and tailor their technology strategy. Focusing on the likely coevolution of markets and
technology creates a more concrete basis for constructing an overall strategy. This also reduces
the likelihood of developing strategies based on an unlikely confluence of market structure and
technological development. A technology strategy can distinguish areas of true uncertainty from
those amenable to analysis. The focus should be on customer value, including overall technical
systems as well as the non-technical telematics components that create value.
The technology life cycle of telematics is a useful tool in understanding the latter's design
dynamics. The cycle begins in the era of ferment, when a new or disruptive technology emerges.
A flurry of variants follows, from which a dominant design emerges. Once the majority of the
industry settles on the dominant design, incremental innovation provides the competitive
35
advantage. From there, the technology matures, and process expertise, not product expertise,
becomes the critical success factor.
Era of Ferment/
Disruption
,Emergence of
"Dominant Design"
Maturity
Incremental
Innovation
Figure 9 - Technology Life Cycle Adopted from Henderson (1999)
Understanding the technology life cycle can guide resource allocation and product
strategy. This influences product development and highlights important elements. For those
products in the early stages of the technology life cycle, monitoring market response to products
is more critical, supporting the argument that web-based conjoint testing is even more valuable.
The strategy must guide product development teams in focusing on the critical attributes that can
increase telematics' adoption rate.
3.3 Research Methodology
This thesis analyzes the product development process to understand issues of designing
and building fast changing electronics within an automotive development cycle. Focusing on the
early phases of the product development process, a methodology was developed to assess the
36
effect of the three methods on product development and their timing implications. Essentially,
the methods evaluate more frequent web-based market testing, clockspeed analysis, and
technology strategy and identify distortion of the strategic planning, concept development, and
system design of a telematics system. The methodology provides critical information for system
architects and product development teams and can create a competitive advantage.
The methodology encompasses five steps:
1. Perform a baseline by assessing the translation of known customers' preferences for
telematics features into engineering attributes through an automotive product development
process example.
2. Evaluate web-based conjoint analysis as a market research tool and determine where it
can be integrated into the product development process.
3. Utilize clockspeed analysis of the automotive electronics industry, telematics,
consumer and communication electronics, and identify key issues of modularity and supply
chain design. Here the personal computer industry will be used as a comparator.
4. Use technology strategy analysis from a standards-driven market perspective for
telematics and automotive electrical/electronic architecture.
5. Identify what areas of the telematics and electrical/electronic system design process
should be changed or distorted based on the information provided by these tools.
The methodology process is depicted in the following figure.
37
Standard Produci Development
Process A nalysis
Wet -based
Conjoir t Analysis
Distorted
"Fast Clockspeed"
Product Development
Process
Cloc kspeed
An alysis
Tech nology
Strateg y Analysis
Figure 10 - Research Methodology
38
CHAPTER 4. PRODUCT DEVELOPMENT PROCESS: AUTOMOTIVE EXAMPLE
4.1 Introduction
This chapter discusses an automotive product development case example to baseline
existing telematics development processes. Ford Motor Company's product development system
(FPDS) is used to illustrate the challenges of integrating the different clockspeeds of automobiles
and automotive electronics. Although certain proprietary information has not been divulged, the
basic information is generally accurate and gives a real sense of the working issues. To ground
the example in theory, the FPDS process is linked to the six generic phases of product
development discussed in Chapter 3. This research focuses on the first three product
development phases, which provide the most interesting and applicable challenges.
Concept
Developmen
Planning
System
Design
Detail
Design
Testing &
Refinement
Production
Ramp-Up
Figure 11 - Focus on Initial Three Phases of Product Development
Section 4.2 reviews the planning phase, including corporate strategy, vehicle timing plan,
systems engineering process, and customer need assessment. Section 4.3 covers the concept
development of a telematics system. Section 4.4 describes the systems design phase, focusing on
integrating telematics into electrical/electronic system architecture.
4.2 Planning Phase
The planning phase includes a corporate strategy assessment, product timing plan,
integration with the systems engineering process, and customer needs analysis.
39
4.2.1 CorporateStrategy
Understanding telematics' potential relationship to the corporate strategy is the first step.
A strategy often includes a systemic diagnosis of opportunities, threats, regulations,
environment, and the organization's capabilities. The development of new products like
telematics relies on the strengths of the organization and its suppliers to successfully launch.
Today, suppliers do the majority of automotive electronics design. Automakers have little
control over or desire to dictate the internal design of electronic modules, including telematics
modules. Automakers focus on integrating the system of electrical and electronic components
into the vehicle. This is an important distinction, for automakers create high-level strategic
designs that suppliers support with detailed design concepts.
Advanced projects with suppliers help communicate these strategies and allow for
technological assessments of concept readiness. Strategists estimate the availability of required
technology and identify potential technological obstacles for telematics (e.g., wireless
communication bandwidth, speech interface to the vehicle, lack of open standards, and vehicle
packaging). Often, upper management's predictions of technological capabilities and
implementation readiness tend to be overly optimistic. The product development engineers can
balance this by providing feasibility feedback based on their assessment of implementation-ready
technologies. Estimates of market growth and potential market acceptance issues (e.g.,
regulatory limits on driver distractions and sufficiently valuable information content) are also
noted.
Reviews of Ford's vehicle cycle plans and estimates of competitors' plans are required.
Management decides to develop telematics systems proactively or reactively. Proactive
strategies focus on research and development, marketing, and entrepreneurial thinking. Reactive
40
strategies are more defensive, usually imitative, and very responsive or a fast follower. Either
strategy can work, but estimating growth, market scale, and competitive timing advantage shows
that a proactive strategy is warranted.
Despite a growing realization of the impact of clockspeed-related issues in the electronics
area, structured analysis of the phenomenon is insufficient. Automakers envision a vehicle
interface to a range of consumer electronics like cell phones, pagers, and PDAs as part of an
enhanced dimension of telematics. This has led to Ford's decision to join AMI-C and support of
the development of an open architecture topology. The impact of multimedia interface standards
could enable the rapid adoption of new wireless technologies and services, lower total costs,
allow automotive suppliers higher volume opportunities with cross-OEM products, and most
importantly, enable a fast time to market for automakers to introduce new technologies.
However, corporate strategies might not be considering the full effect of a shifting value chain
and key core competencies required for fast clockspeed product development.
4.2.2 Vehicle Timing Plan
FPDS uses a stage-gate process consisting of a variable number of milestones and
promotes sequential and parallel tasking. The system is scaleable depending on the complexity
and number of new components. For new vehicles or those undergoing significant changes, the
process can take as long as 48 to 52 months. Over the last 20 years, Japanese competition has
been responsible for U.S. automakers' considerable success at reducing product development
cycles. Even with these improvements, the magnitude and complexity of vehicle development
can often cause deviations from timing plans or even program cancellations. The following
figure is representative of a Ford vehicle timing plan for a major freshening.
41
Vehicle Program Milestones
48
40
31
25
18
13.5
-3
0
Time (Months)
Figure 12 - Automotive Vehicle Timing Plan Milestones
Milestone 1 (KO)- Program start, review of corporate strategy, market requirements and
opportunities, financials.
Milestone 2 (PS) - Early targets and benchmarking, refine financials.
Milestone 3 (SI) - Vehicle targets ranges developed, financial review.
Milestone 4 (SC) - Vehicle level and system level targets defined.
Milestone 5 (PA) - Final go/no-go decision for vehicle to proceed, targets become objectives.
Milestone 6 (ST) - Vehicle surface transfer.
Milestone 7 (PR) - Tooling information complete, surfaces defined.
Milestone 8 (CP) - Prototype build confirming design intent.
Milestone 9 (CC) - No new design changes/adjustments, prepare for launch.
Milestone 10 (LR) - Assembly plants certify readiness for mass production.
Milestone 11 (Job I) - Vehicle launches at assembly plant.
Milestone 12 (FS) - Follow up on vehicle performance, lessons learned capture.
4.2.3 Systems EngineeringProcess
A generic systems engineering process includes three main elements: a) requirements
definition, b) design/synthesis, and c) verification. For requirements, the company defines inputs
(musts and wants). Key elements of corporate knowledge are brought to bear, including
benchmark data, product knowledge, manufacturing knowledge, technology, and constraints.
The steps involve collecting and organizing requirements, translating into precise terms, and
42
developing verification requirements. In design and synthesis, architecture and subsystem
requirements are cascaded to the team and feasibility feedback is received. The team generates
and evaluates concepts, generates subsystem architectures, and develops design requirements and
specifications. For verification, the steps include checking requirement completeness and
verifying that the design meets customer requirements. To ensure compatibility, the entire
system engineering process is designed to be iterative, although in practice, timing and cost
pressure often limit iteration's effectiveness.
A useful framework for depicting the systems engineering process is the "V" model.
Program
Define
input
Archltcture
Vehicle
DEFINE
--------------Subsystem
VERIFY AND LAUNCH
Component
Product/Process
Design
DESIGN
Optimize
Figure 13 - Systems Engineering "V" Process
The "V" model shows the stages of product development and the cascading of requirements from
the level of the vehicle down to that of the component. By superimposing the vehicle timing
plan over the systems "V," a product development team can track both the vehicle program
objectives and the engineering discipline objectives of systems engineering.
43
RmFrJF
- I
--
-- ----
3M
Figure 14 - Program Timing and Systems Engineering "V" Overlay
4.2.4 Customer Needs Assessment
A product development team must collect input from many sources to begin the product
development process and no source is more important than the customer. Here the customer
needs are collected, organized, and translated into terms that are more precise. During this
process, feasibility assessments are made and fed back to the team's customer liaison. This twoway process strives to provide an understanding of customer wants and needs and manage
customer expectations.
Customer-needs analysis can be a very complex and difficult process, especially when
dealing with fast clockspeed products. Bookshelf research reviews, customer insight research
and market analysis are performed in the upfront planning phase. After the concept selection
phase, market offering research and packaging/theme development clinics are used. Standard
marketing techniques gather telematics feature preferences from potential customers, as shown
on the following pages.
44
Dear Vehicle Owner:
In an effort to improve its products, automotive manufacturers need to learn about consumers' experiences with their
vehicles and the preferences for new vehicle features. Your answers to all of these questions will help engineers design
new and better products. This questionnaire focuses on an in-vehicle communication technology.
Your name is among a select group obtained from registration records or you may have participated in a similar survey
recently. Your response is important and confidential.
I would like to thank you in advance for your time and consideration in completing this questionnaire. As a token of our
appreciation, for completing this survey and returning it in the enclosed postage-paid envelope, your name will be entered
into a sweepstakes for four (4) prizes of $500.
Cordially,
PLEASE HAVE THE PERSON WHO DRIVES THIS VEHICLE THE MOST FILL
1.
Is the vehicle listed above still owned or leased by you or someone in your household?
j Yes (SKIP TO Q. 2)
j No-+ What vehicle replaced it?
not replace
2.
OUT THIS QUESTIONNAIRE.
Year
Model
Make
vehicle.)
this
to
reference
in
below
questions
the
answer
(Please
Was this vehicle purchased new, purchased used, leased new, or leased used?
0 Purchased new
0 Leased used
3 Leased new
3 Purchased used
C3 Privately bought / leased
C
Bought / leased by an employer or business
Was this vehicle. . . ?
4.
What percent of the time is your vehicle used for business purposes?
5.
How long have you personally owned/leased this vehicle?
6.
Which of these statements best expresses your overall satisfaction with your vehicle?
C3 Sonw iF
C Fairly well
C3 Very
0 Completely
satisfied
satisfied
On average, how many miles do you typically drive per year?
8.
On average, how many minutes do you spend in your vehicle ...
Do you have a cellular telephone?
C] Yes
Months
Years
ci Very
dissatisfied
dissatisfied
satisfied
7.
%
3.
9.
C Did
Mies /year
per day during the week?
Minutes
per day during the weekend?
Minutes
[3 No (SKIP TO Q. 13)
13. Do you currently own or are you considering purchasing a Personal Digital Assistant (PDA -
i.e., Palm Pilot, Newton,
Sharp Wzard Organizer)?
C3 Currently own
0 Are considering
(SKIP TO THE TOP OF PAGE 2)
0 Do not currently own/Not considering
(SKIP TO THE TOP OF PAGE 2)
45
A
The following section concernsyour interest in an in-vehicle communications technology. Forthe purpose of this survey, we
are referring to this technology as "Telematics." Below is a descriptionof the Telematics technology and a briefoverview of
the benefits it offers.
16. At no additional cos, are you interested in adding the Tebmatics hardmAre, as an optional feature, to your next new vehicle? Having the
Telematics hardware allows you to subscribe to "service packages" containing a variety of services as described above.
3
Yes (SKP TO Q.18)
3
No
Figure 15 - Wingcast Telematics Survey Questionnaire Sample
46
Although the sample portion of the questionnaire attempts to explain telematics, the limitations
of textual media are obvious. The questionnaire data from Wingcast is proprietary and was not
available for publication in this thesis. However, similar survey data on current telematics
services compiled by ATX Technologies is not proprietary and is shown here. The respondents
included current telematics customers and non-customers (referred to as "decliners") and rated
telematics services on a scale from 1 to 5, with 5 being the most favorable rating.
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
* Customers
m Decliners
0
C
0
'I
00
4.D
0
1-.
0
~-
0
o
0 0C
0
'
C
.0
~0
.C
0
C
E
.2
0
a..
~
0
U
C
0
0
Figure 16 - ATX Telematics Services Customer Preference Survey
To research the market for future telematics services, ATX conducted a series of focus groups in
Boston, Dallas, and Silicon Valley. Respondents were shown video enactments of a customer
using advanced telematics services and talking with telematics experts who explained the
47
features. Panelists were early adopters of technology, age 25 to 54, used cell phones, and spent
five or more hours a week commuting to work or driving as part of their job.
Traffic information, routing, obtaining directions, and emergency services were identified
as the most important services. Others mentioned were access to travel information such as
flight schedules and hotel reservations, telephone numbers, weather conditions, and financial
news. Advanced services like p-commerce were explained to the participants. The strongest
value attributed to the service was the personalization, i.e. location-based information based on
the driver's preferences and previous behaviors. Participants saw stress reduction as a major
benefit of p-commerce, along with convenience, safety, peace of mind, and information
availability. In listing the benefits of p-commerce, the participants validated the following points
of previous ATX p-commerce research: information services were important when traveling in
unfamiliar locations but also ranked high for business people with long commute times, there is a
need for convenience and better utilization of time while traveling, customizing services to
specific needs was a significant benefit. The participants listed other benefits of p-commerce:
provides fast access to information that is tailored to their needs, saves them money and
speed/time, makes information available easily, customizes information, and alleviates the need
for paper.
Participants expressed the desire for unbiased merchant information but most stated that
they would be willing to accept advertising messages if the cost of the services were reduced and
if the advertising content were targeted to their interests or needs as specified by a personal
profile. To improve advertising, the participants listed the following options for in-vehicle
telematics systems: individual profiles, on/off controls, information playback capability, graphic
output, and control over content received. For p-commerce information and emergency services,
48
60% of the participants had a target price of $25 or less per month. Fixed fee plans were
preferred over cost per usage plans.
Once the product development receives customer input on telematics, it is input into the
system engineering "V" for the electrical/electronic system. Again, subjective customer
preferences are translated to objectives at the electrical architecture level and are cascaded down
to the telematics subsystem and component levels.
Vehicle
Vehicle
E/E Architecture
system
System
System
Telematics
Subsystem
.
3ubsystem
Sub-
Sub-
system
syste
Component
Display,
Cellular link,
etc.
Component
Compo
nent
Figure 17 - Telematics Integration into Systems Engineering "V" Process
However, often different concepts can satisfy the given requirements and objectives. To
make matters worse, the requirements for telematics are developed approximately 24 months
before the vehicle's launch. Fast clockspeed product concepts developed to meet today's
requirements are likely to be outdated at market introduction. The process of concept
development and selection is discussed in the next section.
49
4.3 Telematics Concept Development
Concept development encompasses concept generation and selection and is the beginning
of the embodiment of ideas. There are many documented methods of concept development and
selection (Ulrich & Eppinger, 2000; Otto & Wood, 2000). In this phase, engineers generally
study the market research and customer wants to ultimately define the product architecture and
engineering attributes. For example, ATX research also showed preference for an in-vehicle
user interface with voice activation and screen combinations for telematics. For products
categorized as high market and technical uncertainty, speed of concept generation and market
testing become increasingly important.
Direction for concepts undoubtedly comes from customer input, but corporate strategy
also influences development. Ford's approach is to minimize the in-vehicle components housing
new technology - a "thin client" approach. This is also referred to as an "off-board" approach as
opposed to an "on-board," embedded hardware approach. Advantages of off-board include
minimal cost and package space, increased probability of customer adoption, and the ability to
upgrade system intelligence at customer call centers, which lowers the risk of obsolescence.
An example of the on-board versus off-board approaches for a telematics navigation
service is described. To provide base telematics navigation capability, an existing operatorbased service is available. A human operator service is expensive and appropriate for emergency
or infrequent use. An automated voice delivery using a text display is an alternative. To provide
an automated service requires sophisticated voice recognition systems, powerful computers and
navigation software. Because of the high cost and performance advantages, an off-board
approach, where only the call center would be upgraded, is preferred.
50
At the early stages of concept development, block diagrams of components are drawn,
rough packaging assessments are made, and preliminary electrical schematics are created. Here
different types of displays, switches, and other components are developed as concept systems
that attempt to meet customer wants. The team uses a set of criteria (e.g., cost, weight, styling,
ergonomics, etc.) to narrow down the feasible candidates.
Display
fL
Telematics
Control Unit
4
Phone/
GPS
Antennas
Call
Buttons/
Switches
Vehicle
Network
Figure 18 - Tel ematics System Concept Block Diagram
The product development team generates concepts within each subsystem block to create the
optimal system. Often, brainstorming sessions are used to develop concepts, which are
documented and a list of advantages and disadvantages are created. The following figure shows
an example of telematics component concepts.
51
Table 3 - Concept Alternatives for Telematics Components
Display Concepts
Cell Phone
Concepts
Alternatives
* Modify existing
alphanumeric displays
(message centers,
radio, instrument
panel)
* External display (e.g.,
PDA)
* Graphic enabled screen
displays
* Touch screen displays
Advantages
*
Low cost, no
packaging
*
Easier packaging
9 More graphic
options
e Combined
input/output
*
Flexible, low cost
Disadvantages
.
Limited
message set
o Reliance on
customer
9 Cost and
packaging
9 High cost,
reliability
0 Not always
available
9 Separate cell phone
module, customer can
remove
e Embedded cell phone
*
Always available,
hands free
*
Cost
Buttons/Switch
9 New, separate button
*
Ease of use
*
Costs
Concepts
module
* Integrate new buttons
into existing
components (message
*
Easier packaging,
reduced cost
*
Complexity
Separate cell phone
and GPS antennas
* Integrated cell
phone/GPS antenna
*
Easier packaging
*
e Proprietary protocol,
high speed
*
Single
component,
potential lower
cost
Familiarity
9 Standard protocol
(CAN, IDB)
*
9 Multiple
connections
* Large package
space, few
locations
available
*
Lack of supplier
support,
verification
9 Potentially less
optimal for
certain vehicles
e Reliance on
internet
connection
o Cost, package,
obsolescence
center, mirror, etc.)
Antenna Concepts
Vehicle Network
Protocol Concepts
Telematics Control
Unit Concepts
*
Basic feature control
content
*
* Majority of feature
control with embedded
cell phone module
*
*
More verification
tools, easier for
suppliers
Less susceptible
to new
technology
More design
control
An example of display concepts is described next. Several telematics services require
information feedback to the customer. This information can be in different forms (e.g., voice,
52
NIP-OW4 -, -
__-
_ ,
I- -
I
-
_-
P.UWW
text, graphics, or even video) or a combination of forms. The type of display in the vehicle
dictates which feedback options are available to the customer. Product development teams can
choose to modify existing alphanumeric displays (e.g., message centers, radio displays, or
instrument cluster displays), use an external display from other consumer products (e.g., PDA,
cell phone), add screen displays that can show graphics, or possibly develop touch screen display
screens that are reconfigurable and reduce the number of buttons or switches. Examples of
concept-ready displays are shown in the following figure.
BBC GLR
Figure 19 - Display Concepts: Text, External PDA, and Graphic-capable Screen
A method for matching customer input on telematics services to engineering attributes
required to implement the service is useful. By putting this information into a matrix,
relationships between customer and engineering attributes are identified. The following page
gives an example of a matrix for telematics.
53
Engineering Attributes
Customer Attributes Text Graphic Location Device
..Display" .Displ1a~)
SafetydSecuilyFeetrnes
Occupant Initiated Emergency Assistance
Automatic Notification of Airbag Deployment
Stolen Vehicle Tracking (Operator Assisted)
Remote Vehicle Functions (Hom, Light, Door Locks)
Roadside Assistance
Remote Vehicle Diagnostics &Download Fixes
Home Security/Lighting Control (from vehicle)
X
X
X
X
(PS)11-
Cell Phone
X
X
X
X
X
X
X
X
X
X
X
X
X
Cellular IP Button
Modem
Inte~c
X
X
X
X
X
X
X
Navigation
Voice
Speech Body Feature
Computer Recognlion Generator
Controls
Pager
Customer IDB/MOST Bluetooth Radio
Port ODB)
Bus Transceivr Frequenc ID
mD
X
0
C
X
X
X
X
X
X
X
0
X
X
X
CD
X
CL
ProductWiliySeirices
Hands Free Voice Activated Dialing
Location-Based Points of Interest (Operator Assisted)
X X
-Restaurants, ATM, etc.
X
Personal Assistance Services
PDA (Palm Pilot) Address/Contact Info Updates
Personal Paging
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Convenience
News, Weather, Sports, etc. Information
Stock Quotes
Inbound Email
Position-commerce
X
X
X
X
X
Wireless video games
X
X
X
XX
XX
C)
X
X
X
X
X
X
X
X
X
X
X
XX
X
X
X
X
X
X
X
X
XXX
X
X
X
CD
CD
X
X
X
X
Entertinment
MP3/Audio files player
Webcasts
C
0
Navigtin Seces
....
Route Assistance (Operator Provided)
Voice operated Route Mapping/Navigation
Automatic Traffic Wamingslnfo (Location-based)
Fast Pass /Automatic Tollbooth
Movies - downloaded
X
X
X
XX
X
X
X XX
X
X
XX
Xj
X
C-)
4.4 Systems Design - Telematics Integration into Electrical/Electronic System Architecture
Telematics design and implementation must be viewed holistically, which involves
integrating the telematics concept into the vehicle's electrical/electronics architecture.
"Architecture" has many definitions. In the context of automotive electrical/ electronic systems,
architecture is a uniform frameworkfor defining common elements and interfacesfor all control
applicationsand the electricalenergy system for all vehicle classes. The systems engineering
and design elements involved with an electrical/electronic architecture include:
"
Partitioning
*
Functional reliability
"
Logical control
"
Diagnostics
*
Communications
*
Environmental requirements
"
Processors & software
*
Power distribution & generation
The scope of managing all elements of the electrical/electronic architecture is too large to be
discussed fully in this research. The emphasis for telematics will be on mechanical partitioning
& positioning, open and closed architectures, and the trend toward modularity.
4.4.1 MechanicalPositioningof Components
The mechanical position of components, or packaging, is a very important process.
Identification of hard points and interferences are critical in the early design phases. The tooling
changes and economics consequences are much easier to handle upstream in the process.
55
Packaging studies of concepts and the location of their components are often key activities for a
product development team. Tradeoffs between different systems and functions require input
from many team members. For telematics, two packaging issues are cellular/satellite antenna
aesthetics and consumption of space by additional telematics hardware. Antennas must have an
unobstructed line of sight with the sky, which limits the number of viable packaging locations.
The instrument panel is a key area of for embedded hardware, with user interface components
such as displays and switches fighting for real estate. As the list of telematics services and
embedded hardware grows, packaging will increase in importance.
The multitude of displays and embedded electronics of the megaCar vehicle is a
packaging showcase. With a niche market and high profit margins, megaCar can afford to do
what high volume OEMs cannot - completely redesign components to create package space.
The following figure shows the physical layout of the megaCar's telematics system architecture.
FFkrt-Lgg
I~~
OPS H
KGe&.s a
(B*
6w5u
Figure 20 - Packaging of megaCar Telematics Components
56
4.4.2 Open versus ClosedArchitectures
Architectures are defined as either open or closed. Historically, automobile OEMs have
used closed (proprietary) architectures believing they could optimize the system to reduce costs
or provide improved reliability, but closed architectures have disadvantages: unique systems
driving complexity, higher engineering costs to design new products, lack of flexibility in
adapting to new vehicle programs, small production volumes with many variations, and an
extensive validation process.
However, with the increased use of in-vehicle communication networks or multiplexing,
OEMs are less willing to increase complexity, development time, and costs to support
proprietary architectures. To resolve this issue, automakers are trying to develop an open
architecture similar to that of the personal computer industry. AMI-C, whose open architecture
supports modularity, backward compatibility, and flexibility, argues that the consumers,
automakers, component manufacturers, and the service community will all benefit by moving to
this open architecture.
With the addition of a customer gateway that provides access for consumer electronics to
the vehicles electrical and electronic components, the vehicle becomes in many ways an
extension of the customer's hand-held devices. Like a laptop computer that uses a docking
station to allow the user to have a larger screen, better audio, and a larger keyboard, the vehicle
can offer its display, audio speakers, and voice recognition capabilities to a PDA or MP3 player.
The following figure shows a block diagram of an open vehicle network with a gateway that
connects to various consumer devices.
57
System
Hosnt
I
Powertrain
Odulei Ii
MP3 Player
Audio/
Tuner
Gateway
CD Player
Video
Display
DVD
Player
Figure 21 - Block Diagram of Open Vehicle Network with Customer Gateway
4.4.3 The Trend Toward Modularity
AMI-C's architecture is striving to provide the same modularity, flexibility, and
longevity as the personal computer platform has attained. Automakers' shift toward
standardized vehicle network protocols like CAN, IDB, MOST, and IEEE 1394 (a.k.a.
"Firewire") is clearly a move toward more modular electrical/electronic architectures. 7 The
organization's initial specification release was planned for late 2000 and contains network and
gateway specifications. The second release is expected in 2003 and adds standard APIs and
internetworking capabilities.
In conjunction with the development of a gateway and software APIs, the AMI-C
architecture begins to show definite resemblances to IBM's PC architecture. As with the
personal computer, the decision of what to make embedded and what to leave as a peripheral or
accessory is very important. The AMI-C topology allows for much freedom in making these key
7 Refer to Appendix - Telematics and Automotive Terminology
58
determinations. Since issues of viruses and hacking potentially arise, the topology also opens up
new requirements for safety and verification. New skills and product development and
verification tools are required to manage the gateway or firewall, including software capabilities
AMI-C
Compliant
System
OEM Proprietary
Vehicle Services
Embedded
Customer
Ports
(optional)
'
-*
-
and validation tools. The AMI-C physical topology is shown in the following figure.
(optional)
"AMI-C Interface
i Connectors
-igh speed
Network
Customer
Access
Either
or both
Connector
IDB
II
Vehicle Network
ii
Figure 22 - AM I-C Physical Topology of Automotive Electronic Network
4.5 Product Development Process Summary
Automotive product development processes breakdown when fast-to-market features are
introduced as existing strategies and processes constrain designs. FPDS issues are representative
of the difficulty existing processes have adequately integrating work plans of fast clockspeed
59
technology with such compressed timing. This research emphasizes the issues of three product
development phases: planning, concept development, and systems design.
Planning involves corporate strategy, vehicle timing plans, systems engineering and
design, and customer needs assessment. The planning phase needs more overlap with concept
development to accommodate late introductions of new telematics technology. Dominant
designs will be emerging, and companies must watch for key attributes from competitors'
designs. Automakers and suppliers need to know which features and attributes to look for and
how to establish them if they are missing from their concepts. Current market research
techniques are useful but provide data that might be years old by the time the technology is
actually introduced. System engineering disciplines and vehicle timing plans currently conflict
with meeting customer needs that require fast clockspeed technology.
The move to modularity can create exceptional value for the customer and relieve market
and timing pressure for product development. Strategic decisions of off-board versus on-board
systems will have an enormous impact on architectures. Critical elements of the AMI-C
architecture are the gateway and vehicle protocol standards. Cell phone bandwidth for
information transfer will also influence concept development and architecture design. Yet,
formalized strategic analysis of a standardized architecture is lacking. Out-of-the-box thinking is
important in getting fast clockspeed products implemented using existing processes.
Automakers often rely on the experience and technical savvy of the product development team to
know which rules to bend and break.
60
CHAPTER 5. WEB-BASED CONJOINT ANALYSIS
5.1 Introduction
Market research plays a key role in the telematics product development process. The
market research provided for automotive electronic features is often filtered and watered-down.
A feature can simply be listed as a "must have" but with little or no analysis showing which of
its characteristics are key to the customer. Understanding the ever-changing perceptions about
the technology, applications, and value that telematics provides enables a product development
team to act quickly and confidently. Decisions regarding trade-offs such as cost versus
functionality can be improved.
New web-based methods of customer input are being developed that can assist product
development teams designing fast clockspeed products. Of the six web-based tools discussed in
Chapter 3, this research focuses on the web-based conjoint testing method for telematics, which
strongly emphasizes conceptualization and allows rich media types. One of the key goals of a
telematics market research test is to ensure that the respondents understand the complex features
sufficiently. Web-based media types, including digital video, computer animations, or
storyboard displays, can convey information to most consumers very efficiently.
The commonly used full-profile conjoint analysis suits telematics because of its concept
evaluation characteristics (Green & Srinivasan, 1978). Full-profile conjoint is analogous to a
design-of-experiments (DOE) of product features that consumers evaluate as a set. Product
concepts are created using specific combinations of features, each having two or more alternate
levels. A rank order measurement scale is used for the dependent variables. The stimulus
presentation takes the form of multimedia shockwave files, graphics, and text.
61
In section 5.2, telematics features are selected and developed into a full-profile webbased conjoint test. Section 5.3 covers the proposed test process for telematics and the tasks
respondents perform. Section 5.4 summarizes the benefits of web-based conjoint testing for
telematics product development.
5.2 Web-based Conjoint Analysis Test Development
Designing a web-based conjoint test to get customer data on selected telematics features
involves standard market research heuristics and Internet programming and graphics skills (e.g.,
HTML, XML). For conjoint analysis, the list of features and levels of attributes must be defined.
Engineering experience and telematics product knowledge is critical in determining the right
features to use and the level of attributes. The goal is to provide enough features to explain and
differentiate the concepts while minimizing the number of factorial combinations.
Full-profile conjoint is a decompositional technique. Respondents rank the concepts
based on sets of features; then a utility function for each feature can be calculated using
estimation methods. These utility functions provide a quantitative level of preference per
attribute level for the feature. For telematics design, product development teams would want to
know which telematics services should be offered. By using the customer attribute and
engineering attribute matrix (see Chapter 4), necessary components are identified.
A test is proposed using 10 telematics features: occupant-initiated roadside assistance,
remote vehicle functions, route mapping and navigation, location-based traffic warnings/pointsof-interest information, hands-free voice-activated dialing, inbound email, PDA address and
calendar synchronizing, web-page access, movies and video games, and price. The following
table shows the orthogonal feature sets derived from the 210 combinations.
62
Table 4-1 Attribute Cards Definition for Conjoint Analysis
En
En
0)
U
U
(U
a)
(U
0.>
Sa)
-
U)
E .2
0.
0. LM
0E-
O0U
.0o
..Ji!c
(U
5
0
C.)
.1LL
E
w
0
(0
E
(>
-0N
(U
0.
.0
0
a (.>
t-
)Cfl
Q
%I)
0 )a
. >
gxi
En
E
F (U
a_
.0
0C
)
'E)
Card I
Yes
Yes
Yes
Yes
Yes Yes
Yes
Yes
Yes
$3,000
Card 2
No
Yes
No
Yes
Yes Yes
No
No
No
$3,000
Card 3
No
No
Yes
No
Yes Yes
Yes
No
No
$1,000
Card 4
Yes
No
No
Yes
No Yes
Yes
Yes
No
$1,000
Card 5
No
Yes
No
No
Yes
No
Yes
Yes
Yes
$1,000
Card 6
No
No
Yes
No
No Yes
No
Yes
Yes
$3,000
Card 7
No
No
No
Yes
No
No
Yes
No
Yes
$3,000
Card 8
Yes
No
No
No
Yes
No
No
Yes
No
$3,000
Card 9
Yes
Yes
No
No
No Yes
No
No
Yes
$1,000
Card 10
Yes
Yes
Yes
No
No
No
Yes
No
No
$3,000
Card 11
No
Yes
Yes
Yes
No
No
No
Yes
No
$1,000
Card 12
Yes
No
Yes
Yes
Yes
No
No
No
Yes
$1,000
63
5.3 Web-based Conjoint Analysis Testing Process
In this section, a structure of a telematics web-based conjoint test is proposed. Data
gathering of relevant respondent information (e.g., age, economic group, probability of purchase)
is not described but could easily be added. The web-based conjoint test begins by providing
respondents with background information on telematics. Initially, this is accomplished using
screens with a textual definition of telematics and descriptions of features. Respondents then
click on an icon to display a digital video clip (approximately 8 minutes in length) that describes
a 2004 telematics scenario.8 The video includes graphics, animations, sounds, and dialogue.
The scenario starts with a young woman getting ready to drive back to college. Along the way
she has some shopping to do, stops for an overnight rest, picks up a friend, and contacts some
acquaintances. During the trip, she uses several current and future telematics services (see
Chapter 2), including traffic information, navigation, email, voice mail, p-commerce, and
because her vehicle is involved in a traffic accident, automatic airbag notification. The following
figure shows some scenes from the video clip.
8 The
video clip was created by ATX Technologies and is available for viewing at their website
www.atxtechnologies.com. ATX used this video as part of a focus group study on telematics and positioncommerce features.
64
Figure 23 - Scenes from Telematics Video Clip
After watching the video clip, respondents are shown 12 cards and are able to review any
feature by clicking on the icon representing that feature. As Dahan and Hauser (2000) point out,
the user interface is important. The display of 12 cards as in other web-based conjoint tests also
seems reasonable for telematics.
65
.
...........
Figure 24 - Card Example of Web-based Conjoint Test
The 12 cards are shown in random order on the computer screen with instructions for
sorting them using the mouse and clicking on the desired card. To reduce the complexity, the 12
cards are presorted into three piles when they first select their top four choices of "likely to buy"
and then their bottom four choices of "unlikely to buy" (Figure 25 shows an example of this
procedure for a crossover vehicle web-based conjoint test). To simplify the task for the
respondent, a card disappears when it is selected. The remaining four cards are grouped into the
"not sure" category. Respondents are then shown the "likely to buy" group of four cards, which
they rank by clicking in order of preference. This same procedure is done for the "not sure" and
"unlikely to buy" groups. Again, as respondents click on a card it disappears on the screen.
Respondents then are asked paired-comparison questions as a final check for errors and to iterate
66
as necessary. These questions compare the least preferred "likely to buy" profile to the most
preferred "not sure" profile and the least preferred "not sure" profile to the most preferred
"unlikely to buy" profile.
Plias *PIf~proet:
thib yr u wJd be LIKELY
OWL
IU~
I
1K 44
RM
V
14
17~iuv
W*W
16 O
A4~,
&
'I
~
oi
17J
L
Figure 25 - Twelve-card Selection Process User Interface for Crossover Vehicle Test
The test is highly interactive and media rich, yet the total estimated time to for respondents to
complete it is 30 minutes.
5.4 Web-based Conjoint Analysis Summary
Web-based conjoint analysis should be used to provide efficient telematics
conceptualization in market research. Similar in approach to a design of experiments, engineers
on product development teams can use this method to gain greater insight into customer needs.
67
Understanding rapidly changing perceptions about telematics and its customer value enables a
product development team to make quality decisions. The quantification of these perceptions
through utility functions provides usable data on often vaguely described customer needs and
wants.
Web-based conjoint allows the use of rich media types that are easy to produce or even
already available. The test development and testing process are manageable, although
specialized programming skills are required. Web-based media types including digital video,
computer animations, and audio can convey information to most consumers very efficiently.
Web-based testing also has the ability to communicate proposed features and functionality to
upper management for buy-in and to educate the marketing communication team and customer
service engineers.
68
CHAPTER 6. CLOCKSPEED ANALYSIS USING THE PERSONAL COMPUTER
INDUSTRY AS A COMPARATOR
6.1 Introduction
Electrical/electronic systems in the automobile are growing in function, scope, and
importance. So too is the probability that more communication and consumer electronics will
interface with the vehicle. With the introduction of mobile multimedia and telematics, the
interface between these external electronics and the vehicle grows in significance. Managing
this interface will be a challenge for all automakers. This chapter uses concepts developed by
Fine (1998) and applies them to telematics and the automotive electronics industry.
Clockspeed analysis is a method of understanding product life cycle acceleration,
modular architecture, and supply chain design to create or maintain a competitive advantage. It
is a complex and relatively new management tool. Often the term is used to refer to product
technology, but processes and organizations also have unique clockspeeds. For automobiles, one
may measure product technology clockspeed according to Ford Motor Company's introduction
of a new Taurus@ platform every three to four years or how frequently a new Palm Pilot@
design emerges. The clockspeed measurement depends on what is important to the team. In this
research, the focus is on telematics electrical/electronic product technology. As the automotive
community compares the next generation of in-vehicle network to the personal computer
architecture, the lessons from the personal computer industry are used to highlight possible
issues with product modularity and supply chain design.
A note of caution from Shapiro and Varian (1999), who warn that analogies can be very
useful for communicating strategies but very dangerous for analyzing them. I agree that
analyzing the strategies from the personal computer industry and trying to haphazardly apply
69
them to telematics is potentially risky. However, clearly some fascinatingly similar strategic
analyses exist, and the lessons learned are very valuable to the automotive electrical and
electronic engineering community.
6.2 Clockspeed Measurement of Consumer and Automotive Electronics
The speed at which consumer, communication, and even automotive electronic
technologies are changing is breathtaking. In contrast, the vehicle development cycle, while
improving steadily, is considerably slower. Understanding the differences between the two
clockspeeds is an important step in developing strategic product plans and core competencies.
Vehicle
Life Cycle
Development Cycle
~ 120 months (Average)
24 - 48 months
Telematics, Consumer & Communication Electronics
Dev Cycle
Life Cycle
Dev Cycle
Life Cycle
Dev Cycle
Life Cycle
Dev Cycle
6 - 24 months
Life Cycle
24 - 36 months
Figure 26 - Clockspeed Differences between Vehicles and Electronics
Not only does clockspeed affect upstream product development, it can have serious
implications for products already in the market. As clockspeeds continue to increase, products
70
such as automobiles with long service lives run the risk of having obsolete electronic
components and features. The following figure highlights this potential difficulty for telematics.
VALUE
New Telematics
System
Dev
Dev
Dev
Dev
Life Cycle
Life Cycle
Telematics
Value Gap
Life Cycle
Life Cycle
----------------------------------------
-------
----- Initial Value
I TIME
1
A
Vehicle
Purchase
2
3
4
First Vehicle
5
-
6
7
Owner
(Average)
8
9
10
Subsequent Vehicle
(years)
Owner(s) End of Vehicle
Life Cycle
Figure 27 - Clockspeed Effect on Telematics Customer Value Adopted from Ito (2000)
This shows compelling reasons to have modular architecture that can be upgraded over
time, similar to the personal computer. However, modularity brings with it certain hidden
consequences discussed in the next section.
6.3 Modularity and Product Architecture
With the release of the AMI-C specifications, automakers' electrical/electronic
architectures are trending toward an open standard. This also shifts the emphasis of design
toward increased modularity. Following the personal computer architecture and the desire for
Plug-and-Play devices, automakers will be providing a gateway to its vehicle network that allows
for add-on devices. Modularity will affect two areas with respect to electrical/electronic
71
networks. The automakers will strive to make the proprietary part of the vehicle network
common in order to share components across vehicle lines. They will also want to have the
gateway and the standardized part of the vehicle network (e.g., IDB) be common and modular.
Continuing to develop proprietary vehicle network protocols has no real advantage, just
as IBM's attempt at Micro Channel Architecture provided no clear benefits to the consumer and
ultimately failed as a standard. IBM spent significant resources and time on areas that created
little customer value, giving competitors like Compaq and Dell an advantage. Like computers,
vehicle networks will probably converge to industry standards. If this occurs, decisions will be
made about whether telematics components should be part of the vehicle network or left as an
accessory.
One should view modularity as a necessary architectural development to address the
electronics technology acceleration issue. However, product development teams should realize
that it opens a company up to new competitive pressures. With this knowledge, certain key
technologies or components can be identified when a firm must outsource for knowledge. The
customer and engineering attribute matrix provides a format for companies to identify those
components. Each company will have its own unique competencies, so the list will be
proprietary. However, with the spin-off of Delphi and Visteon, most automakers have little to no
experience left in electronics or telematics. Some components that will probably make the list
include textual and graphic displays, navigation computers, customer ports (IDB), IDB/MOST
networks and Bluetooth transceivers.
72
6.4 Supply Chain Design
In some ways, the personal computer industry is moving from high technology to
commodity. With the importance of connectivity, networking and the Internet, other devices are
performing functions previously done by computers. The personal computer supply chain has
also undergone a dramatic shift, as discussed in Chapter 3. Today, Dell's modular approach and
efficient manufacturing is considered the best in the industry. Dell's proven but aging approach
shows faith and loyalty to the Microsoft and Intel alliance. Compaq and DEC, on the other hand,
have started to structure in a more vertical industry position.
Of the two different approaches, Compaq is taking more of a clockspeed/double helix
industry view. Has the personal computer industry finally begun to circle back on the double
helix? Perhaps. Maybe the supply chains of the personal computer industry and automotive
electronics will evolve in the same manner, if not quite at the same speed.
For telematics, no company has all the core competencies in automotive electrical/
electronics, computing and software, development tools and testing. Several automakers are
quickly trying to find partners and form alliances that provide the right blend of skills and
technology, as the importance of electrical/electronic systems in the automobile grows.
Decades ago, however, styling and sheet metal were the key elements of a vehicle. The
majority of automakers kept styling and body stamping capability in-house then, and most still
do. It seems odd that with electronics approaching and possibly surpassing sheet metal in future
importance that most automakers are spinning off the core competencies in electronics. Recent
examples are the Delphi and Visteon spin-offs from GM and Ford, respectively. GM is also
feeling pressure from Wall Street to spin off its Hughes Electronics subsidiary, even though it
might thereby lose control of key expertise in telematics communications.
73
Three-dimensional concurrent engineering involves simultaneously developing products,
processes, and strategic supply chains (Fine, 1998). The integration of the product development
and manufacturing process, often referred to as concurrent engineering, has been implemented
since the early 1980s within U.S. automotive OEMs. However, supply chain design has rarely
been included in the entire product development process. The personal computer industry has
some interesting examples of how the lack of importance given to supply chain design had
significant financial implications. Fine's make versus buy matrix is a useful tool for monitoring
knowledge and capacity outsourcing. The following figure shows the matrix and the trending
arrow for automotive electronics and telematics.
74
MATRIX OF DEPENDENCY AND DECOMPOSABILITY
oE
- o
EU
DependentFor
Knowledge & Capacity
DependentFor
Capacity Only
POTENTIAL
OUTSOURCING TRAP
BEST OUTSOURCING
OPPORTUNITY
WORSE
OUTSOURCING
SITUATION
CAN LIVE WITH
OUTSOURCING
0 0
-U
0
z
Figure 28 - Make versus Buy Decision Matrix Adopted from Fine
Automakers are feeling pressure to scale down their vertical supply chain structure in all
but the key core competencies. Sheet metal stampings and powertrains are still considered key
competencies for which most automakers are keeping at least a portion of manufacturing
capabilities. Certain aspects of the powertrain seem to be losing their core status. Automakers
are beginning to increase vehicle lines using engines borrowed from strategic partners. GM's
recent agreement with Fiat is a good example; Fiat vehicles sold in the United States will use
GM engines (USA Today, 12/18/00).
75
Many automakers also consider electrical/electronics core competencies, yet those with
manufacturing capabilities and telematics expertise in electronics design and services (e.g., Ford
and GM) are doing or considering it.
General Motors
Delphi
Ford
Motorola
Daimler
Chrysler
Visteon
Toyota
Bosch
Honda
Siemens
Co
0
Figure 29 - Telematics Electronics Supply Chain Example
Ford
Wingcast
Daimler
Chrysler
ATX
0
Kzzz
Toyota
ICO
AAA
Honda
General Motors
4-
Onstar
Figure 30 - Telematics Services Supply Chain Example
76
The previous figures show that further similarities to the personal computer industry
could occur in the telematics supply base. IBM had to deal with the "Intel Inside" supplier issue;
Ford could expose itself to a similar fate. Already market analysts are pressuring Ford and GM
to spin off Wingcast and Onstar@.
MICROSOFT
IBM
(Operating System)
)
(Personal Computer)
0
INTEL
(Microprocessors)
Figure 31 - IBM Personal Computer Supply Chain Adopted from Fine (1998)
WINGCAST
FORD
0
(Call Center Service)
(Telematics Systems)
otor\
Gp! SkA ?
MOTOROLA
(Telematics Modules)
Figure 32 - Automotive Telematics Supply Chain Example
This analysis favors keeping a substantial but minority stake in the spin-off to capture
supply chain value. IBM did not take advantage of its supply chain design and gave up
significant value. There are factors in the automakers favor regarding modularity and supplier
value chains. First, Wingcast and Onstar are service businesses rather than manufacturers like
Intel. Second, electronics suppliers are very dependent on sales revenues from the automakers.
77
Third, a vehicle has several other attributes that customers value, such as engine performance,
styling, ride, and handing; the personal computer was largely defined by its processor, operating
system, and application software.
Still, core competencies are important for companies developing fast clockspeed
products. According to Fine (1998), Toyota might tipping its hand in its view of electronics and
core competencies in contrast to Ford & GM:
. . . the New York Times reported information of a joint venture between a Toyota
subsidiary and Texas Instruments to build a $1.5 billion semiconductor factory to make memory
chips and automotive electronic components. The article described Toyota's earlier moves into
telecommunications and software and twice used the word "puzzling" to express the author's
confusion over Toyota's strategy. [From a clockspeed perspective], those moves are anything
but puzzling . .
the auto industry may very well undergo the same structural shifts the
electronics industry underwent the last two decades. When this shift occurs, car companies can
risk a fate similar to IBM's "Intel Inside" computers. Toyota . .. is adjusting its capabilitieschain design strategy to position itself for the coming changes.9
6.5 Clockspeed Analysis Summary
Clockspeed analysis provides a formal methodology for assessing technology
acceleration, modularity, and supply chain design. As the clockspeed of automotive electronics
and telematics increases, using this methodology becomes more important. There is a need to
measure consumer product clockspeed and understand the dynamics of the interface to the
vehicle. The modularity of product architecture is key but has potentially devastating
consequences if not managed correctly. Understanding the double helix of horizontal and
9Clockspeed,
p. 173 (1998)
78
vertical structure and where the automotive industry resides on that cycle is worthwhile for
product managers. The influences of clockspeed are external to the company; product
development teams must learn to adapt to them. The management team has to develop criteria
for identifying core competencies. These criteria should highlight tasks that build on and exploit
market power and defend against competitors' actions. Automakers must take ownership of
tasks that allow the company to put its name on the product, that give control of quality
decisions, that keep the product development team involved in customer value-adding
technologies, and that manage dependencies on suppliers to minimize exposure.
79
CHAPTER 7. TECHNOLOGY STRATEGY ANALYSIS FOR STANDARDS-DRIVEN
MARKETS
7.1 Introduction
Technology strategy guides a company on how to react to market and technological
change. Often rooted in economics, it serves as an input to a company's corporate strategy.
With the trend toward modular architectures and open standards (i.e., AMI-C), technology
strategy analysis for standards-driven markets is appropriate. For products based on standards,
unique market and technological forces apply. Section 7.2 discusses technology life cycles and
S-curve analysis that provide a high level assessment of telematics progression in the market.
Section 7.3 covers value creation in standards-driven markets. Section 7.4 reviews methods of
establishing standards. Section 7.5 provides methods for exploiting standards in order to capture
value. Section 7.6 provides a summary of how technology strategy can assist telematics product
development.
7.2 Technology Life Cycles and S-curves
Technology life cycles and S-curves provide useful graphical frameworks for analyzing
telematics development. Understanding where telematics is on the technology strategy cycle is
as important as understanding where an industry or product is on the clockspeed cycle. Although
telematics has been available in basic form for over five years, it is still a relatively unknown
technology that is only beginning to scratch the surface of high volume applications. Currently
estimated in the era of ferment, no dominant design has emerged yet. Using the framework from
Chapter 3, the following figure depicts an assessment of the telematics technology life cycle.
80
Era of Ferment/
Estimated Status
Disruption
of Telematics
Emergence of
"Dominant Design"
Maturity
Incremental
Innovation
Figure 33 - Telematics Technology Life Cycle
GM's Onstar® would have the first mover advantage in creating a dominant design with
approximately 850,000 current telematics subscribers' 0 . However, Onstar@ uses proprietary
technology and is not based on any AMI-C standard. Onstar@, like other current telematics
systems, is unlikely to become a dominant design because it lacks both a "killer application" and
a user friendly and economical interface. Web-based conjoint analysis could be an important
tool for assessing competitive telematics designs to assist in identifying emerging dominant
design features.
Foster's (1986) S-curve is another useful tool for understanding technological
development and discontinuities. Using a vertical axis of product performance or value and a
horizontal time axis, key components or product architectures empirically take on an "S" shape
10
Detroit News, January 2000
81
until a new technology replaces the older one. This continual cycle can be useful in identifying
discontinuities. Using the clockspeed figure from Toyota (Ito, 2000) discussed in Chapter 6, an
S-curve can be developed. The following figure shows an S-curve superimposed on the existing
clockspeed-related figure.
VALUE
Formation of S-Curve
I
L I,
..........
1 ........
2.....
.....................
4.........
Figure.
.. 34..
Uin.Scuresfo
7
8
9
Initial Value
TIME
10
(years)
Telematics
Useful applications of telematics component S-curves include cell phone/bandwidth
considerations (e.g., GSM, CDMA, 3G), software APIs (e.g., Java, Windows CE) and graphic
display technologies." Christensen (1992) suggests that companies can often continue to
squeeze performance out of components even though S-curves would suggest moving to a new
technology. The vehicle's electrical/electronic architecture and telematics architecture can also
be effectively analyzed using architectural based S-curves. Architectural S-curves, Christensen
" Refer to Appendix - Telematics and Automotive Terminology
82
argues, are more useful in indicating new transitions and when competitive architectures can
become or disrupt the dominant design.
7.3 Value Creation Through Standards
Value is created when new technology is matched to customer need, but customer needs
change, and as the technology evolves, existing customers develop new needs. In addition, the
technology might appeal to new kinds of customers with new kinds of needs. There are several
ways to create value for the customer (Henderson, 1999).
" Network externalities (Many to Many) - Product value increases with the number of other
individuals who own the same product (e.g., telephones, fax machines)
" Complementarities (One to Many) - Product value increases with the number of
complementary products available (e.g., CDs, software, VHS/Beta)
" Learning by using (Customer Groove-in) - Standards mean customers only invest once in
learning to use the technology. (e.g., Qwerty keyboard, MS Office)
" Economies of scale - (e.g., light bulbs)
" Modular innovation ("Plug and Play") - (e.g., stereos, PC cards)
A standardized and modular vehicle architecture would provide value using several methods
listed above. Complementary suppliers of MP3 players, pagers and other consumer electronics
that use Bluetooth or the AMI-C gateway help create value. Economies of scale for the
automotive market provide a great advantage for automakers and an incentive for
complementary suppliers. Modular innovation, through "plug and play" connectivity to
consumer electronics, will probably be used to create value. Learning by using will propagate
the development of a dominant design. Network externalities could be used by specific
automakers as a way to raise switching costs. If Ford's telematics systems had customizable
83
profile settings that were portable across any Ford brand (e.g., Ford, Mercury, Mazda, Lincoln,
Jaguar, Land Rover, Aston Martin) but not a competitor, a customer may feel more compelled to
purchase another Ford brand vehicle. With the development of an open standard architecture,
AMI-C is promoting its topology as creating value to the consumer, automakers, component
manufacturers and service providers. The following table lists these benefits.
Table 5 - Benefits of AMI-C Architecture Adopted from Robinson (2000)
Backward
Compatibility
Modularity
Consumer
Automakers
9 Lower cost
0
replacement of
components
e Easy to upgrade
upgrade
0 Larger choice of
products
Easily configured
* Easier to test and
validate
o Wider range of
options to offer
o Shorter time-tomarket for new
0
*
Lower cost to
Updating new
models easier at
lower cost
* Upgradeable older
cars retain higher
residual value
Flexibility
e
Easily adapted to
personal needs
0 Easily expanded to a
higher level of
functional performance
and features, if desired.
9 Wide set of features
available from the
dealer
o Common, scalable
system possible from
low cost vehicles
through luxury cars
technologies
Component
manufacturers
o Provide similar
components to many
automakers lowering
development cost
o Provide larger
variety of
components at small
0
Larger market for
service parts
o Minimizes
obsolescence
o Larger market for
products across vehicle
makes
o Greater opportunity to
use common
components in variety
of system
Larger market for
services offered
o Lower cost of
hardware needed
*
increment al costs
Service
Providers
o Easily added
hardware to support
new services offered
o Easily upgradeable
to new technology
levels
configurations
0
Easily configured for
new service features
and functions
7.4 Establishing Standards
The AMI-C topology will probably become a standard within the next 3 to 5 years.
When the adoption of a standard creates value for consumers, adoption dynamics are driven by
84
the phenomenon of increasing returns and the dynamics of lock-in. Standards win when a
critical mass of key players believes that the standard will be adopted, a critical mass of
consumers has adopted them, or the power of the concept/design/delivery is overwhelming (the
"great product" strategy). A further discussion of these three scenarios is justified.
When a critical mass of automakers converges to develop a standard, as in the case with
AMI-C, the probability of establishing a standard is very high. The key driver of this scenario is
the open architecture, which demonstrates the automakers' willingness to make major,
irreversible commitments to a common standard. The initial release of the AMI-C specifications
was scheduled to occur in the fourth quarter of 2000. This Release 1 documentation will include
network and gateway specifications. Release 2 will add standard API and internetworking
definitions sometime in 2003.
The scenario where a critical mass of consumers adopts telematics is unlikely for existing
and near term systems but possible with later designs. In this case, the standard will also likely
be the dominant design. Building expectations is important, but so too is delivering a product
that can reasonably meet them. The adoption or diffusion curve is helpful in understanding
typical purchasing patterns and customer groups. Different categories of adopters differ by
social or economic status - particularly in terms of resources, affinity for risk, knowledge,
complementary assets, and interest in the product. Making the transition from early adopters to
early majority users often requires the development of quite different competencies: service,
support capabilities, and much more extensive training, for example.
85
Cumulative
Adoption
Early
Majority
Late
Majority
Early
Adopters
Laggards
Innovators
Time
Figure 35 - Customer Adoption or Diffusion Curve
For telematics, current customers would be innovator s and early adopters. The most
difficult transition for most products is moving from acquiring early adopters to the early
majority group. This is referred to a "crossing the chasm" and is depicted in the previous figure
with the large arrows. Telematics has yet to accomplish this as existing systems lack elements of
design, performance and service customers demand.
The great product strategy can also produce a standard. This involves coming to market
ahead of competition and using very aggressive pricing - "giving the product away."
Complementary products and services must be developed or encouraged. A great product
delivers value to the customer. However, if it can establish itself as a standard, the value
increases substantially (Henderson, 1999).
86
Value to
Consumer
Common Standard Benefit
4
Great Product Benefit
Size of Telematics Installed Base
Figure 36 - S-curve Effect for Standard-Driven Products
7.5 Exploiting Standards
If AMI-C indeed provides a ubiquitous telematics standard, the question for automakers
is then how to be unique and capture the value with the AMI-C topology. Several tactics are
available including licensing key technologies, controlling or selling key components, and
creating customer lock in. The following illustration describes the external factors that
contribute to capturing value through standards from customers, competitors, complementors,
and suppliers.
87
-Lock in
- Switching costs
Customers
Competitors I
C
<pa
- Have dominant design
- Own crucial patents
Complementors
-Own or control
complementary assets
Suppliers
- Generic parts
- 2 nd source
Figure 37 - Capturing Value from Standards Adopted from Murray (1999)
With a standard, customers may feel each company is competing on "level ground." By opening
the AMI-C standard, automakers hope to trigger adoption. From the customer's perspective, the
standard eases fear of monopoly rent extraction while creating more potential value. A
standards-driven market forces companies to compete "head to head". Competitive advantages
such as using low cost or superior execution in product development, service and distribution
will be weapons in the battle for market share. Brand names for telematics systems and services
should be managed aggressively to provide a connection with consumers. Imagine the marketing
issues of a situation where a Toyota Camry is involved in an auto accident and GM's Onstar@
service calls for an ambulance to help with any injuries. The driver and passengers may feel
more appreciation and loyalty to Onstar® than to Toyota.
88
rrn
-
~----7
.--
-~_
7.6 Technology Strategy Summary
This chapter discussed the importance of technology strategy for reacting to telematics'
market and technological changes. Modular architectures and AMI-C's open standards cause
unique market and technological forces. A technology life cycle analysis for telematics shows
the technology to be in the era of ferment. S-curve analysis may provide useful architectural
information for telematics, particularly for new, disruptive designs. A few key telematics
components should be tracked using S-curves by product development teams, although
information gained may not be useful in predicting new component technologies. Telematics
systems based on standards provide more customer value than proprietary ones. Methods of
establishing standards were discussed, focusing on the probable critical mass of automakers
adopting AMI-C standards. Methods for exploiting AMI-C standards in order to capture value
were covered. The following figure captures many of the guiding principles from technology
strategy analysis of telematics.
Market Focused Tasks
Elaborate product to meet the variety
Maturity
of consumer needs: focus on reducing cost,
increasing
Takeoff
quality.
"Cross the chasm" to mainstream users:
build support, distribution, service
networks
I T ggre SIV y mVe and Cu ve Iegrat d ayUsiU
Figure 38 - Telematics Technology Life Cycle and S-Curve Integrated Analysis
89
CHAPTER 8. DISTORTION OF THE PRODUCT DEVELOPMENT PROCESS
8.1 Introduction
This chapter summarizes how web-based conjoint analysis, clockspeed analysis, and
technology strategy distort the existing product development process. The customer and
engineering attribute matrix described in Chapter 4 is revisited. A new matrix subset is
developed that shows key engineering attributes (e.g., network protocols, external gateway and
displays) identified by clockspeed analysis and technology strategy.
Section 8.2 discusses the new information provided by these three methods and
highlights the importance of web-based conjoint analysis, clockspeed analysis, and technology
strategy. Section 8.3 suggests the correct timing in the product development process to utilize
each of the methods. Section 8.4 provides a framework for handling conflicting data from the
methods.
8.2 Tools - New Information Provided
With the development of faster communication and information technologies, product
development teams can use web-based conjoint to rapidly integrate customer input at low cost.
The quantification of customer perceptions through utility functions provides usable data to a
product development team. Web-based testing also provides improved communication of
services and features to upper management, marketing communication teams and the customer
service personnel.
Clockspeed analysis gathers information on the rate of external change and how to use
that information for competitive advantage. Knowing the clockspeed of automotive and
consumer electronics helps create architecture strategies. The move toward modular
90
architectures is justified and beneficial, but brings challenges of core competencies and supply
chain design. It also can be useful in identifying key components that product development
teams should focus on. The following table is subset from the customer and engineering
attribute matrix introduced in Chapter 4, which identifies components that affect modularity to a
large degree.
Table 6 - Key Engineering Attributes Identified by Clockspeed Analysis
Engineering Aftributes
Customer Attributes
Text
Display
Graphic
Display(s)
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Navigation
Computer
Customer
IDB/MOST
Bluetooth
Port (IDB)
Bus
Transceiver
X
X
X
Safey/Security Features
Occupant Initiated Emergency Assistance
ALtomatic Notification of Arbag Deplafyment
Stolen Vehide Tracking (Operator Assisted)
Remote Vehide Functions (Hom, Ught, Door Locks)
Roadside Assistance
Remote Vehide Diagnostics & D@aload Fixes
Home Security/Lighting Control (from vehide)
RoxdctviySenvces
-
Hands Free Voice Activated Dialing
Location-Based Points of Interest (Operator Assisted)
Restaurants, ATM, etc.
Pesonal Assistance Services
PDA (Palm Piot) Address/Contact Info Updates
Personal Paging
Navigation Sevices
Route Assistance (Operator Proided)
Voice operated Route Mapping/Navigation
Automatic Traffic Vamings/Info (Location-based)
Fast Pass / Automatic Tollbooth
X
X
X
X
X
X
X
X
X
Convweience
Nws, Weather, Sports, etc. Information
X
X
Stock Quotes
X
X
Inbound Email
Position-cmmerce
X
X
X
X
Entedainment
IVP3/Audio files player
Movies - downloaded
Vebcasts
Wreless video games
X
X
X
X
X
X
X
X
X
X
X
X
X
91
Technology strategy gives insight into establishing and exploiting standards. The
strategy should map how to make money with a standard architecture. With the AMI-C open
architecture moving toward standardization, a member company can create a reputation as the
caretaker of the architecture if they can establish a dominant design. Automakers will have to
compete from the same starting point, but successful companies will outperform on critical
dimensions such as user interfaces, low cost, and speed to market. The following table identifies
components that are not only important to establishing standards, but may also affect the
emergence of a dominant design.
Table 7 - Key Engineering Attributes Defined by Technology Strategy
BgneerngAftibutes
Custormw
iibjes
Gpic
Dspl(s)
CelularP
Btton
IVdem
Irtaface
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Laotie ce
(GPS)
Cell Rrne
\Ci
Ioguition
Oustner
IBMST BLusooh
Fat (IDB)
Bus
Transceiver
X
X
X
SeWySewuIyF eafs
xacrt Inritied BgyyAssistano
Auiorreic Ntifcatin dArtbg DeplaTantI
Sden ide Tradking (OpearAssisted)
brrote \Mhde Fdions (Fb-, Ugt, Door Lodks)
RosidseAssstnoe
Wide Dagscs &Dowicid Fbxs
Hrre Secuity/Liiting Crtrd (fromr \ide)
Fante
PhR
X
X
X
X
X
X
X
X
X
X
X
X
X
X
viSences
X
-
iv1ted Daling
Hands Free Mb
Locatin-Baed Parts of Irterest (Ceraor APsisted)
Fstaurats, ATM etr&
Ferwcn
X
X
asisbanoer Moues
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92
8.3 Timing - When to Consider New Information
Flexibility must be included in product development. Web-based conjoint analysis is a
mechanism for customer and market feedback throughout the product development process, not
just at the beginning. A flexible process could respond to changing markets and technologies
during the product development cycle. A modular electrical/electronic architecture of the
vehicle affords the engineering framework to allow for this flexibility. Sensing the market
(Iansiti & MacCormack, 1997) allows changes in customer wants to be captured to reinforce
existing design assumption or to drive changes, if necessary.
Sensing the Market with Web-based Conjoint Analysis
IIII
Planning >
pie
oncept
Development
System
Detail Design
Desig~n
Figure 39 - Proposed Usage of Web-based Conjoint Analysis
Like technology strategy, clockspeed analysis is more time consuming and not as
iterative as market research. These methods are more for guidance of strategy and sourcing.
Since clockspeeds are external influences and continue to accelerate for electronics, the
frequency of analysis might also increase.
93
Clockspeed and Technology Strategy
Planning
F
Concept
Development
System
Design
Figure 40 - Proposed Usage of Clockspeed Analysis and Technology Strategy
This research identifies the planning and concept development stages of the product
development process as the optimal timing for clockspeed and technology strategy analyses. By
using clockspeed analysis in conjunction with technology strategy tools for standard driven
markets, information on creating and capturing value through modularity can be used to focus
product development resources.
8.4 Tradeoffs - Handling Conflicting Information
The three tools presented here - web-based conjoint analysis, clockspeed analysis, and
technology strategy analysis - might not always lead the product development team to one
conclusion. This section discusses what happens when the information supplied by the three
tools or the interpretations of that information conflicts. When this occurs, tradeoffs have to be
made. Fortunately, conflicting data and tradeoffs are a common part of the product development
process, and mechanisms generally exist to address them. Management insight, vision and
courage are necessary, but sometimes rare, components of fast clockspeed tradeoff analyses.
The following figure depicts the three tools and the sources of influence they assess.
94
Technology Strategy
(Internal)
Clockspeed
(External)
Customer
(External)
Figure 41 - Three Methods of Distortion and Influence Sources
Hauser and Urban (1993) discuss the roles of strategist and judge in an organization to
handle these conflicts. The strategist sets market, budget, and resource goals for technology
application not just for technology's sake but also to support long-range goals. The judge's role
is to mediate or if need be, decide on the issues of disagreement. The strategist and judge must
be high-level managers with the influence and authority to make difficult, binding decisions. It
is possible to have one person assume both roles or even to have two people from different
organizations (i.e., functional versus product focused). Fast clockspeed products will certainly
involve conflict. The goal should be to manage the conflict if it cannot be resolved. Speed is the
critical factor in dealing with the tradeoffs. Learning from inevitable mistakes is also important.
An example of conflict is the customer-value driven push to modularize the
electrical/electronic architecture in order to provide plug and play capabilities versus the
clockspeed warnings of "Intel Inside" concerns in the supply chain. In this case, technology
95
strategy provides some guidance on capturing value in a standards-driven market that is caused
by the open architecture and modularity. Therefore, even though modularity brings potential
pitfalls, strategic analysis of market and technology diffusion can help an automaker navigate
around the pitfalls. However, a smart management team will recognize the dynamics of the
marketplace and continue to revisit this issue in case change is required.
Clockspeed analysis and technology strategy analysis suggest high level and longer-term
direction for the product architecture and supply chain design in the early planning phase. Webbased conjoint is used in the planning phase and iteratively throughout the concept development
and systems design phases. From the perspective of product development in the large,
clockspeed analysis and technology strategy should be given priority weighting in the decision
process. Web-based conjoint is extremely important in supplying consumer direction to this
perspective, but most of its weight comes through in the perspective of product development in
the small.
Tradeoff discussions can also occur in terms of differing information from one tool used
at multiple points in the product development process. Web-based conjoint testing can give the
best examples of this. What are the implications to changes in web-based conjoint analysis
information from one product development phase to another? Changes in perceived consumer
wants or prioritization occur in many other automotive features. Assessing the magnitude in
perceived change (i.e., was a strong want, now a definite do-not-want) and effect on customer
satisfaction is important. In addition, risk assessment and cost analysis for rushing changes
versus delaying introduction until mid-model year or the following model year are critical.
However, the information garnered in the earlier phase(s) helps validate the engineering design
and architecture decisions. Significant changes in web-based conjoint test data should be
96
validated and supported by other market research tools, particularly when doing so might
influence the system architecture.
Architectural "inertia", or a company's tendency to stay with its product architecture
strategy, will generally prevail in tradeoff situations. This inertia can be very dangerous,
especially during transition between S-curves (i.e., disruptive technologies). This discontinuity
or paradigm shift phase is when the customer input from web-based conjoint becomes the key
analysis and subjugates clockspeed and technology strategy. Although, S-curve analysis of the
discontinuities of jumping to the next technology and/or analysis of consumer and
communication electronics trends to identify potential disruptive products will help. As the
clockspeed of telematics, consumer and communication electronics continues to accelerate, this
will force the S-curve to shorten its time horizon before the next disruptive technology occurs.
The estimated timeframe for this to occur for telematics is approximately every two to four years
but will happen faster with the increase in clockspeed of automotive electronics. Therefore,
transitions are likely to begin to occur faster and virtual customer market research will gain in
importance. Web-based conjoint will need management support to be strong enough to
overcome this inertia. Managing this process will be very difficult for automakers and
challenges its relatively conservative culture.
97
CHAPTER 9. CONCLUSION
9.1 Conclusion
Telematics is a new technology that highlights the acceleration occurring in the
automotive electronics industry's rate of technological change or clockspeed. Fast clockspeed
products like telematics demand extremely quick and timely concept selection and product
development. Existing electrical/electronic product development processes are designed to
interface with the lengthy vehicle development process, resulting in conflict and compromises.
Telematics has been shown to be an excellent example of an exciting technology that does not fit
into the automotive product development process.
The research identifies weaknesses in existing product development for telematics and
suggests a methodology that includes three tools that help address these shortcomings.
Telematics product development should incorporate virtual customer research methods like webbased conjoint analysis to acquire more frequent and efficient customer input. Current and
potential future telematics services offer a plethora of options and value for the consumer. Webbased conjoint has the potential to identify the optimal group of services and telematics
components for product development teams. Clockspeed analysis of electrical/electronic product
development and lifecycle, of modularity, and potential power shifts in the supply chain is
crucial. The clockspeed of automotive electronics is being driven faster as it strives to integrate
consumer and communications electronics. This integration is creating a need for open
architecture and more modular systems. AMI-C sponsored an open standard electrical/electronic
topology to address the issues. There are similarities in the standardization of the architecture of
the personal computer and the automobile. Lessons from the personal computer industry in the
98
1980s warn of the economic and supply chain pitfalls of moving to a modular architecture.
Fortunately, automakers have inherently more power in the supply chain for telematics, as the
system is integrated into the entire vehicle. Telematics technology strategy analysis and the
emerging standardization of vehicle electrical/electronic architecture will highlight strategic
design implications. Telematics is beginning to enter the era of dominant design. The
identification of key telematics features and services will provide a huge competitive advantage.
Focusing the product development team on integrating components that create and capture value
is important.
The use of these tools causes a distortion in the strategic planning, concept development,
and system design of a telematics system. The methodology suggests the correct phases of the
product development process to incorporate the new information these three methods of analysis
provide. A framework for handling conflicting information from the three methods was also
proposed. The methodology is not prescriptive in nature, it serves only to provide strategic
assessments for improving the product development process for fast clockspeed products. It is a
framework for understanding things that a company can control (corporate/technology strategy)
and cannot control (customer preferences, environment/clockspeeds). In the next section, the
author predicts the diffusion rate of select telematics features and components for the North
American market.
9.2 Predictions
Designing and developing telematics systems and other fast clockspeed products are
extremely challenging. Difficulties managing the product development process include market
behavior estimations, technological uncertainty, cost targets, severe time constraints, competitive
pressures, and huge economic losses if unsuccessful. So why do it? A successful telematics
99
strategy has the potential to unlock a previously unattainable, substantial and renewable revenue
stream for automakers. There is also the lure of developing a more personal and loyal
relationship with the consumer through the telematics communication link.
The rate of diffusion or adoption for telematics will be a function of customer wants
(including price) and the number of companies willing to offer telematics. Although automakers
are racing to supply the next generation of telematics, diffusion for the next 3 to 5 years will
most likely be gradual. This will be caused by a combination of factors including customer
skepticism, price and needs identification issues, strategic and economic issues between the
automotive mechanical structure and electronics (e.g., instrument panel and displays), and
possible regulatory and safety issues.
Adoption will be a function of education and customer learning. There is some question
if the customer is willing to look past the first attempts at telematics, especially if usability or
quality is a concern. Customers will have to voice their preferences for how to best integrate the
cell phones, PDAs, and other consumer electronics with telematics and the vehicle. Bluetooth
will likely have a substantial impact on telematics and the integration of consumer and
communication products with vehicle. This might alter strategies for embedded hardware.
Even the buying process at dealerships can affect the adoption of telematics. Most
dealership atmospheres are not conducive to purchases of telematics-type products. Consumers
might have a difficult time honestly discussing the level and price of telematics features they
desire knowing that later they might be given the hard sell on rust proofing or upholstery scotch
guarding. Automakers are beginning to focus more on the dealer-customer relationship and are
making strides to improve the dealership experience.
100
Management has been slow to recognize the importance of electronics (from engineering
and marketing) and to prioritize decisions accordingly. Areas in which this can hinder the
adoption of telematics are packaging and tooling costs. The instrument panel, for example, is
one the most valuable pieces of packaging real estate in the vehicle. This is the area that the
customer views and interacts with the vehicle the most. Like the majority of structural
components, the instrument panel tooling is very expensive and moves at a slower clockspeed
relative to the electrical/ electronic system. Key telematics components such as graphic displays
will therefore take longer to install economically. A substantial investment is required to
jumpstart this process, and other priorities can overshadow the perceived importance of
telematics. This will slow down telematics' diffusion.
The safety and regulatory environment has not historically hindered the introduction of
new technology for automobiles. Debates occurred when windshield wipers and car radios were
introduced, but the benefits to the customer prevailed over proposed safety concerns. It is
unlikely that telematics will be an exception. Having said that, there are governmental and
consumer safety concerns regarding the growing number of driver distractions. Cell phone usage
while driving is currently an issue, and some states have already legislated limits on it. Many
more states are considering laws on the issue. In addition, public sensitivity to the Firestone tire
recall and potential liability make the automotive regulatory and safety environment more
treacherous.
Based on the examination of existing automotive strategies and product development
processes, this research concluded that telematics will not be received well by the majority of
consumers for the next 2 to 3 years. Companies like General Motors, Ford, and possibly
DaimlerChrysler are expected to introduce telematics on most of their North American vehicles
101
to gain a foothold in the market. However, until a dominant design emerges and a standardized
gateway is developed that allows consumer electronics to interface with the vehicle, automakers
will not be able to capture the value of telematics. Bluetooth will provide an interconnectivity
solution within the next two years that will help prepare customers for the AMI-C gateway. The
following table lists the author's predictions for the next 2 to 3 years of telematics-related
components including diffusion rates, North American automotive installation volume, whether
standardized or proprietary, and if on-board or off-board.
Table 8 - Projections of Telematics Components for North America
Telematics
Component
Diffusion
Rate
N.A. Volume
(in 2-3 yrs)
Proprietary/
Standardized
On Board/
Off Board
Graphic Display
*
Gradual
0
500 K
0
Standardized
*
On board
GPS
*
Fast
0
1-5 M
*
Standardized
*
On board
Cellular/Wireless
Bandwidth (Email)
Voice Recognition
*
Fast
*
1-5 M
0
Standardized
e
On board
e Gradual
*
500K
0
Proprietary
*
Off board
Vehicle Network
*
Gradual
*
75K
0
Standardized
*
On board
e Gradual
*
500K
*
Standardized
*
Protocol (IDB)
Navigation DVD
Player & Disks
Gateway
Navigation off
board, DVD player
on board (for
* Gradual
*
OK
*
Standardized
*
entertainment)
On board
Until the dominant design emerges, an intensive customer and clockspeed analysis is
recommended. The firm who listens to the consumer and whose product development process is
most efficient will likely win.
9.3 Suggestions for Future Study
The study of other web-based market research methods on telematics, particularly virtual
concept testing and user design, is warranted. Commercial testing and comparison of web-based
102
conjoint, virtual concept testing, and user design would provide more insight into not only the
validity but also the optimal product development timing of the methods. Possibilities in
tailoring the proposed methodology for specific vehicle lines or segments exist. Using other fast
clockspeed features such as smart cards for entry/starting, reconfigurable displays, and reverse
back-up sensing aids to test the conceptualization dimension would be useful. From the point of
view of customer preference, electronic features generally rank below other perennial favorites
such as engine performance, ride, and handling, but this might not continue. Comparison of the
importance of fast versus slower clockspeed attributes may yield some insight on the effect of
modularity.
103
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APPENDIX - TELEMATICS AND AUTOMOTIVE TERMINOLOGY
12
3G: The third generation of cell phone technology platforms. Data speeds appropriate for
meaningful level of streaming.
AMPS: Advanced Mobile Phone System
The first-generation analog cellular phone system that originated in the United States.
Bluetooth: Short range (< 10 meters) wireless technology that allows for information exchange
and syncing between two willing devices.
CDMA: Code Division Multiple Access
An advanced digital cellular and PCS platform that converts audio signals into a stream of digital
information (made up of Is and Os). This "digital speech packet" is transmitted via a wide-band
channel consisting of several radio frequencies. CDMA differs from the other popular digital
cellular platform, TDMA, in that it uses several frequencies instead ofjust one. These digital
platforms ensure greater call clarity and security, prevent cloning fraud and allow a greater
number of calls to be handled by a tower or response center at one time.
CDPD: Cellular Digital Packet Data
Using the existing AMPS system to carry digital data, by transmitting dense packets of
information across vacant analog channels.
CTIA: Cellular Telephone Industry Association
Data or Network Bus: The central collection of wires that carry instructions to electronic
components throughout the vehicle.
Electrical distribution system: Also referred to as the wiring. Circuits and components that
provide power and signals to the electrical/electronic systems.
Electronic modules: Any component with an ASIC or microprocessor and software. Typically
classified by type of functions it controls like body, powertrain, safety, chassis, etc.
EDGE: Enhanced Data Rate for GSM. Maximum data transfer rate of 384 Kbps.
FDMA: Frequency Division Multiple Access
Used for AMPS and TACS, the two key analog systems and their variants, this system gives
each conversation its own unique radio channel.
12
Many definitions are from the Motorola telematics website.
106
Gateway: A device that allows consumer products to interface with the communication system
in vehicles, while protecting the vehicle's system from defective devices or inappropriate
messages.
GPS: Global Positioning System, also refers to Global Positioning Satellite. A system using
satellites, receivers and software to allow users to determine their exact geographic position
worldwide.
GSM: Global System for Mobiles, a European digital standard.
Instrument Panel: (IP) Also called the dash. The center "cockpit" of the vehicle interior
generally housing the steering, driver information center, heating and cooling controls and radio.
IDB: ITS Data Bus (see ITS), A medium-speed multiplexed bus intended for command and
control of devices in vehicles. It has been proposed by Motorola and the Society of Automotive
Engineers (SAE) as an industry standard. IDB will allow device manufacturers to create products
that will be compatible with all vehicles -- versus today's data bus systems which differ by
automobile manufacturer. The IDB would interface with an existing vehicle bus through a
gateway.
ITS: Intelligent Transportation Systems, a broad range of diverse technologies, including
information processing, communications, control and electronics, which, when applied to our
transportation system, can save time, money and lives.
MMI Man/Machine Interface: Also known as User Interface. The means by which the user
interacts with a machine or device. In the past, knobs, dials and displays manipulated by a user's
hand were common interfaces on technical devices. Today, MMI includes more advanced
functions such as voice recognition, speech synthesis and touch screens.
PCS: Personal Communications Service, service that bundles voice communications, numeric
and text messaging, voice mail and other features into one device, service or bill.
Powertrain: vehicle system comprising the engine and transmission and related components.
Protocol: A standard set of rules that governs how computers or other electronics communicate
with one another. Protocols define a message's format as well as how they are exchanged.
Agreeing to a standard protocol allows different types of computer systems to communicate with
one another in spite of their differences.
SAE: Society of Automotive Engineers, a one-stop resource for technical information and
expertise used in designing, building, maintaining and operating self-propelled vehicles for use
on land or sea, in air or space.
TCU: Telematics Control Unit, the embedded vehicle control unit that communicates with the
automobile controls, GPS satellite and customer service center to provide Telematics features to
a driver.
107
TDMA: Time Division Multiple Access, an advanced digital cellular platform that converts
audio signals into a stream of digital information (made up of 1s and Os) and divides it into
"digital speech packets" according to time. The packets are then transmitted one a single radio
frequency. TDMA differs from the other popular digital cellular platform, CDMA, in that it uses
one channel instead of many. These digital platforms ensure greater call clarity and security,
prevent cloning fraud and allow a greater number of calls to be handled by a tower or response
center at one time.
TIA: Telecommunications Industry Association, the United States' telecommunications
standards making body.
User Interface: Also known as Man/Machine Interface (MMI). The means by which the user
interacts with a machine or device. In the past, knobs, dials and displays manipulated by a user's
hand were common interfaces on technical devices. Today, User Interfaces include more
advanced functions such as voice recognition, speech synthesis and touch screens.
WAP: Wireless Application Protocol, a standard that aims to align industry efforts to bring
advanced applications and Internet content to digital cellular phones.
108