What carmakers will reveal at CES

Over-the-air-software updates for cars will be a $45B business by 2022

Automakers at the Consumer Electronics Show (CES) in January are expected to push software-defined vehicle technology, offering new human-machine interfaces (HMI), artificial intelligence and automated driving features.

Virtual reality in the form of gesture recognition and heads up displays will also be prevalent at CES, according to several analysts from IHS Automotive, which held a web conference yesterday to talk about the event.

audi virtual cockpit Audi

Here's the most surprising Google Earth view: The open road in front of you. Audi's virtual cockpit is an example of the type of technology CES attendees should expect.

"Augmented reality is more than just a buzz term," said IHS senior HMI analyst Mark Boyadjis. "Virtual reality and augmented reality will be everywhere around there."

Augmented reality, or taking a computer-generated image and displaying it to a driver, has its challenges. For one, processors in today's cars are unable to sense an object in the road and render it on a heads-up display in real time, Boyadjis said.

"What I'm looking for at CES around this are advances in processing power of some chip sets -- from NVIDIA and Intel," he said. "If they can nail processing and real time transactions across the [in vehicle electronic] system, that will make augmented reality a reality."

While there will be a lot of auto announcements at CES, IHS analysts warned that most will not involve automakers. Over the past few years, automakers have been showing off their tech advances either at auto shows or periodically throughout the year -- simply because there are so many advances to tout.

CES will be more of a venue for Tier 1 auto suppliers -- the makers of in-vehicle infotainment (IVI) systems, sensors and other electronics-related parts.

There will be about 464 automotive electronics exhibitors at the show -- a record number, according to IHS. The exhibitors will feature technology related to audio, robotics, wearables and telecommunications, among other things.

One area to keep an eye on is human-machine interface technology, which is rapidly changing the way drivers and passengers communicate with their IVI systems.

"The thing is, it's no longer about just having a navigation system or applications on it. It's about which [system] is easier to use and which one is easier to learn," Boyadjis said. "That why HMI is such a core component."

Cloud-based speech recognition technology that uses machine learning skills to identify speech patterns more quickly to accurately identify commands will become commonplace in automobiles.

Interior cameras and sensors will increasingly enable gesture recognition, where a driver can control infotainment functions, such as system volume or contact list scrolling, with a swipe of a hand through the air.

For example, the BMW 7 series luxury sedan already lets a driver control the infotainment system with three-dimensional hand gestures.

One development the analysts said they're "crossing their fingers" to see at the show is Modular Infotainment Platforms (MIB), which would allow carmakers to upgrade vehicle electronics even while vehicles are in development -- something not traditionally possible.

audi tt 13 Audi

More automakers are expected to offer modular electronics that will allow the latest processors and touch screen displays to be rolled out with new cars and trucks.

For example, an infotainment system's processor could be replaced even while a vehicle is undergoing a multiyear development cycle. Traditionally, vehicle electronics are years behind the consumer device industry, even for first-year models.

The majority of the automobile manufacturing market is now focused on modular infotainment displays, controllers, telematics, electronic control units and optics, Boyadjis said.

For example, Audi showcased its MIB-2 technology and virtual cockpit at the Connected Car Expo in Los Angeles last year.

Egil Juliussen, research director at IHS, said CES has become the premier show for the automotive suppliers over the last five years, as automotive shows don't offer enough of a venue for them.

As cars have increasingly become defined by their electronics and software, attention has shifted to ways to upgrade those systems as you would a desktop or laptop. Increasingly, carmakers are including Wi-Fi units and greater broadband capabilities for Over-the-air (OTA) software updates.

The OTA market is expected to reach $45 billion by 2022, Juliussen said. The vast majority of it will be related to the money-saving capabilities of OTA, where vehicles won't need to be taken to dealerships for upgrades or software recalls, he said.

"[Carmakers] really cannot build OTA platforms fast enough," Juliussen said.

The OTA market is also spurring a flurry of acquisitions. For example, leading IVI system maker Harmon this year acquired OTA software supplier Redbend.

Apple Carplay Honda

Apple CarPlay and Android Auto are competing -- and winning -- against traditional in-vehicle infotainment system makers. Expect to see more carmakers announce both the smartphone mirroring applications to be native to their vehicles.

But as Internet connectivity increases in vehicles, so, too, do security risks, and OTA updates will only add another avenue for potential cyberattacks. This year's CES should begin to showcase cybersecurity as a core element of connected vehicles going forward.

One reason for that is automakers have historically not established hard firewalls between vehicle infotainment systems and vehicle control units, so once a hacker gains access to the head unit, the vehicle's more critical systems -- such as braking and acceleration -- are exposed.

Jeremy Carlson, IHS senior analyst for Autonomous Driving, said automakers should be working on an "iterative design" of cybersecurity that marries hardware protection with software.

Security software should be able to determine what types of messages are being transmitted between hardware systems and detect aberrations that could be attacks, Carlson said.

While connected cars do present a greater security risk, the technology also offers tremendous potential for additional services and applications.

Two companies expected to go head to head with traditional Tier 1 automotive suppliers, and win, are Apple and Google.

Apple's CarPlay and Google's Android Auto will be adopted as native interfaces, or smartphone mirroring applications, across the carmaker community, according to Carlson. And it won't be one or the other -- it will be both.

"CarPlay and Android Auto are already drastically undermining the native [IVI] system makers," Carlson said. "This is one of the biggest disruptions to the [IVI] space. Even if you look back on personal navigation devices, this is much more fundamental. Being able to bring content into the [IVI] with smartphones...really does fundamentally change what consumers want in center stack."

Juliussen agreed, saying: "Apple and Google will to a large extent take away most of business from automakers through cloud-based services over time."

Copyright © 2015 IDG Communications, Inc.

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