Harman recently partnered with Renesas to improve its in-vehicle network and infotainment solutions. Matthew Beecham caught-up with Harman’s Phil Eyler, Executive Vice President and President of Infotainment to find out how this alliance and others are supporting the brand in a highly competitive sector. In Part 2, we interview Harman’s EVP and President Lifestyle Audio Division Michael Mauser about the audio innovations it is bringing to the market to sustain growth.
What are the reasons behind this new partnership with Renesas and what will it bring to the business?
Renesas is renowned for its microcontrollers and semiconductor solutions and we’re very proud to collaborate and innovate with a fellow industry leader. This new collaboration will deliver increased levels of safety and convenience to motorists through an improved in-car network solution and premium entertainment experience. Robust, low latency networks with high quality service is what automakers need for an infotainment system, with Ethernet AVB a key feature for connected in-vehicle networks. It will help our automotive customers to overcome the complexity and cost of delivering next-generation in-vehicle infotainment solutions. Of course, we remain hardware agnostic, and we maintain strategic relationships with other partners such as Intel and Texas Instruments. All vendors are coming forward with powerful automotive platforms, and we are excited to harness their potential for more integrated solutions.
Harman has invested in a number of collaborations and acquisitions in the past 18 months. Can we expect to see more?
Technical leadership is a key focus in the Harman growth strategy and that will be pursued through internal R&D, collaborations, partnerships and indeed acquisitions. Earlier this year the acquisitions of Redbend Software and Symphony Teleca were crucial in strengthening our connected car technologies and over-the-air (Ota) software capabilities. The integration of both is going well, furthering our ability to deliver seamless, connected car and connected lifestyle consumer experiences.
Generally within the industry, I think we can expect to see a significant increase in partnerships, particularly between telematics companies and OEMs – it’s a trend that we certainly saw on the increase at [the 2015] IAA. The connected car will need a highly advanced infrastructure supporting it and we’ve learned that no one supplier or automaker can provide the singular solution; therefore, industry cooperation is a must. Suppliers, OEMs, standards bodies, private and public partnership organisations will need to work together to deliver the promise of connected and – eventually – autonomous cars.
From a Harman perspective, acquisitions and partnerships are an important part of the strategy and will continue to be so moving forward, for growth and for continuing to expand the technical expertise and capabilities of the business.
From the FY2015 result, Harman has had a strong year. How will this be sustained for 2016?
Our expertise has allowed us to capitalise on demand for the connected car, connected enterprise and connected lifestyle, which has helped us achieve these strong financial results. Of our total corporate revenues, 70% comes from the automotive market, with infotainment alone generating half of Harman’s $6 billion revenue. We are the market leader in embedded infotainment and nine of the top 20 automotive OEMs are Harman customers, leading to more than 25 million vehicles on the road having Harman connected solutions. Recent business wins include supplying the latest infotainment systems for the BMW 7-Series and Volkswagen Tiguan vehicles, which joins the existing portfolio of VW vehicles featuring Harman infotainment solutions.
We’re very proud of the position we’re in, but we cannot be complacent in such a rapidly developing industry. We will sustain momentum for 2016 with our on-going focus on cost leadership and executional excellence, as well as continuing to capitalise on the growing interest and demand for connectivity.
Is connectivity the main driver for progress at present?
Consumers want to incorporate the latest technologies in their cars, making this space as seamlessly connected as their living environments and containing the same connectivity features as consumer devices. In fact, 80% expect the car of the future to provide the same connected experience they experience at home, work and with their mobile phones. And they want to be able to connect to these smartphones and tablets, as well as the cloud, in their vehicles.
There will be huge benefits to more connected cars, both for the driver and for society. There’s the potential for traffic congestion to be reduced, as well as the number of accidents, while at the same time increasing our enjoyment and productivity while in the car. Automakers, hardware and software suppliers need to fulfil this demand for connectivity with safety and security in mind.
How is Harman working to fulfil this demand?
We have a robust innovation pipeline that is helping us propel audio and infotainment technology developments in the automotive market to enable our customers to live this connected lifestyle. Our patent portfolio has doubled in the last five years across car audio and infotainment and we’ve grown to be the number one supplier in this space.
As mentioned previously, Harman’s acquisitions of Redbend and Symphony Teleca we have established a strong foundation to address the ‘software-defined car’ through an expanded set of connected car technologies, cloud-based managed services for OEMs, and OTA capabilities.
Our latest infotainment innovations, such as head-up displays, gesture-based controls and augmented navigation, will continue to develop. Just a few years ago these technologies were like science fiction, so it’s a very exciting and fast-paced arena in which to be innovating. The technology featured in the BMW 7-Series provides prime examples. The 7-Series debuts a number of industry firsts, such as automatic OTA quarterly map downloads, personalised routes and a richer graphics system called ‘Micro City’ with detailed building imagery, as well as including more data like the width of roads. Harman has also assisted in its gesture recognition features, Near Field Communication (NCF) for improved Bluetooth pairing and dialect recognition.
How significant will OTA software becoming in the next few years?
Our customers are faced with the reality that the percentage of software-related recalls and service calls is steadily on the rise. Numerous research reports indicate that software-driven recalls are already approaching 50% of the tens of millions of recalls made in the US today. And, with a per-service event cost of roughly $100, these recalls are becoming a substantial expense category.
With cars becoming much like other connected devices, it’s only natural for their owners to expect their software to be easy to update. Can you imagine being required to visit your local smartphone or tablet store nowadays, only to have the latest firmware or application version installed? OTA capabilities will be hugely influential, providing automakers with the gateway to deliver quick and seamless updates without their teams having to physically access a vehicle. It’s something that is equally convenient for drivers in our time-poor lives.
At Harman, our comprehensive technology offering allows car manufacturers to implement OTA updates for full optimisation of car production and servicing. It helps address all software update requirements and new feature additions through completely secure remote OTA software management, contributing to a dramatic reduction of warranty- and recall-related expenses, and even enabling rapid response to security threats, such as hacking and cyber-attacks.
Security within the connected car continues to cause debate. How is Harman addressing this security risk?
Harman has been investing heavily in cyber security for several years. Infotainment systems are becoming more connected to the external world with enabled features like cloud connected services, downloadable apps, integration with personal devices of the consumers (phones/ wearables), vehicle data analytics and communications with other vehicles. Of course with connectivity comes threat. Similar to computer technology, firewalls and other software measures are being put in place to create a barrier between malware and infotainment systems. To address this very real threat, Harman has introduced a comprehensive automotive cyber security solution we call the ‘5+1’ framework. This approach gives increasing levels of protection for a variety of risk factors, along with OTA capabilities to address software-based threats quickly.
How does 5+1 work? How does it offer protection?
The 5+1 system not surprisingly has five layers. The first is a hardware security model that secures storage for digital certificates, cryptographic keys, passwords and any other project specific sensitive data. Layer two is the hypervisor, which in a multiple operating system environment, keeps separation between the OS managing mission-critical operations and the environment executing media-rich but less critical functions. The third is OS Access Control, which provides policy-driven secure control of access to memory, storage and peripherals. The fourth layer is application sandboxing, which keeps applications separate and safeguards that errors don’t corrupt other apps. And the fifth layer is network protection, which ensures communications for internal networks and the external world is kept secure. Finally, this entire framework is supported by Harman’s OTA updateability, a crucial component for installing security-related updates and guards against security flaws detected in the field.
It’s something that is designed to combat all foreseen cyber security concerns. We’re already selling to our customers and have received interest from other OEMs to present our capabilities in this space, so we see it as a significant opportunity of growth for Harman.