To better understand the evolution of the smarter vehicle, on a recent episode of Cocktail Investing, Tematica Research’s Chris Versace and Lenore Hawkins spoke with Ted Cardenas, Senior Vice President of Marketing, Car Electronics Division at Pioneer Electronics Corp (PNCOY). Given that about 95 percent of his company’s business is related to auto and the company will reach its 80th anniversary next year, we thought he’d have some valuable insight. This is the company that introduced the consumer laser disc in 1979, the car CD player in 1984 and GPS car navigation in 1990, with around four decades in the car entertainment space.
Ted pointed out to us that compared to home or office-based technologies, the car is a seriously brutal local for innovation where electronics need to be able to withstand extremes in temperatures, moisture and vibrations – not exactly the friendliest environment! We discussed how the increasingly Connected Society allows for not just millions of on-demand songs, but also delivered the “killer app” of real-time traffic information thanks to all those GPS enabled smart phones tagging along with their drivers.
The Connected Society has materially changed product development for the car as well as it also means connected companies. The need for higher and higher speed data networks and the innovations that allow for and take advantage of them means that companies no longer have to, or should for that matter, go it alone. Each company is only part of the solution as we see more specialization taking place with the consumer benefiting from a simple, usually intuitive solution in which all the complexity has been blissfully hidden.
In this new development paradigm, relationships are increasingly important as companies specialize within the solution set and we’ve seen some of the complexity offloaded to smartphones, allowing for greater flexibility as consumer can choose which device best fits their needs. For Pioneer, this means offering in-dash multimedia receivers that are compatible with popular smartphone interfaces and apps such as Apple CarPlay®, Android Auto ™, and Waze®, as well as features such as Bluetooth® music streaming, hands-free calling, Spotify® and Pandora®.
Pioneer isn’t just innovating within entertainment and communications as the company is also developing advanced driver assist for both OEM and aftermarket, allowing owners of older cars to benefit from the latest in safety improvements. When asked about his expectations around the timeline for the truly driverless car, Ted framed his analysis in the context of the evolution of in-car GPS systems – an evolution by degrees rather than a binary event.
The first GPS systems were developed by Pioneer and were used to figure out where you were on a map, but could not provide point-to-point directions. Those first systems also didn’t provide 100% coverage, so drivers could find themselves driving into a GPS void when traveling in areas not covered by the devices internal maps. Over time the map coverage became increasingly more complete and turn-by-turn directions evolved from available only in highly-trafficked areas into the most remote. He suspects we will see something similar with driver-assist that will offer more thorough assistance in more populated areas with less as one gets into more rural areas. Over time the level of assistance and coverage areas will expand.
Finally, we discussed how the increasingly smart car will also do more of the heavy lifting when it comes to maintenance, providing a more seamless driver experience that not only provides autonomous transportation, but monitors and schedules its own maintenance needs. We likely not alone in looking forward to the day when we no longer find ourselves noticing that little oil change reminder sticker a few months and few thousand miles late. The car of the future will be safer, smarter and a lot more entertaining.
Companies mentioned on the Podcast
- Alphabet (AAPL)
- Apple (AAPL)
- BMW (BMWYY)
- Fiat Chrysler Automobiles (FCAU)
- Intel (INTC)
- Pandora (P)
- Pioneer Electronics (PNCOY)
- Tesla Motors (TSLA)