Expectations for technology to save the auto industry?

The January 3rd edition of The New York Times had an opinion piece written by a Computer Science professor and a Product Manager from Google.

They suggest four ways that technology can help Detroit to save itself. At least three of these ideas could be considered telematics or an extension of telematics related technology and are not new ideas to those of us in the telematics industry. I have two reactions to stories such as these:

1. Joy; in that people from disciplines outside of telematics are now realizing the potential benefits that we have been speaking about for roughly a decade now.

2. Concern; because we now have the government and mainstream media heavily involved in determining the future direction of the automobile industry. Their statements (informed or otherwise) will definitely have an impact on the public’s expectations. There is no way that those who develop and put into practice public policy have any idea about the unique challenges of implementing wireless technology into an automobile.

With regards to item number two above, I speak from some experience. I come from the cellular industry and started selling wireless radios to Tier 1s for implementation in OEM telematics projects around 2001. At that time, I viewed everything through the lens of what is technologically possible. The wireless industry was growing in leaps and bounds, and I strongly believed that when combined with the power of the internet and location based applications then we could help to transform the automotive industry business and revenue models. The car guys were not moving at a speed that suited my vision, so I ended up labeling them as being dinosaurs who “didn’t get it”. Of course, at the time I had no idea about anything related to an automotive project. Over the years, I learned a lot. A lot about how cars are developed, a lot about the business models, and a lot about the safety and resulting liability risks that the car guys have to take into consideration for everything that they do.

What I learned from a career in the wireless industry:

A. Wireless networks are systems that continually evolve while in operation with the ability to overlay upgrades onto existing technology. The technology develops at a faster pace than it can actually be deployed. This will even happen with little understanding of the business dynamics which will ultimately impact that deployment. For example, in the late ‘90s I was involved in a thing called WAP. This was wireless internet technology that while it worked, didn’t have ready all of the business or market support process that it required. In that case, the failure wasn’t fatal, it was seen as more or less a learning experience in an iterative process that very soon led to the launch of GPRS, which led to an overlay of EDGE, etc.

B. Devices are even less problematic in the industry. The expected life span of a mobile device is somewhere around two years with no requirement to maintain form, fit, function over any period. If the device breaks, throw it out and we will give you another new one with an extension of your service plan!

C. Just keep technology moving forward, because if you don’t you run out of things to sell.

What I learned as an automotive outsider who tried to sell technology to the automotive industry:

A. A car is a static, closed system and is assembled from various sub-systems. Once all parts, sub-systems, etc. are tested and approved, there shall be no changes until it goes through production. Even after production, there is really nothing in it for an automotive company to make a car “upgradeable”. You already own it. Allowing for changes introduces risk to the overall performance of the vehicle, thus creating a liability risk for something that was already shipped and paid for.

B. It takes over three years to define, develop, test, correct, retest, and approve all of the parts so that the final vehicle can be locked down and go to production. Most of the parts and sub-systems in a car are specifically designed and develop to be part of the car. This allows for incremental improvement of features and cost, without radically changing the sub-system that would require major new design, testing, and approval. These incremental improvements can take place over five to ten years, minimizing continued large investments.

C. In the car world, change equals cost related to redesign, retest, etc. As such, all of this additional cost needs to be justified in an ROI.

If you match up the items above to their corresponding letter, you start to see that this is not a matter of what is technologically possible. It’s a matter of completely incompatible business models and development cycles. The folks inside of the auto companies understand this, but they do not currently have the highest level of credibility. So you get outsiders from “successful” industries suggesting what Detroit needs to do to save itself.

Being that I come from the wireless side of things, there is no benefit to me in making the implementation of wireless technology into an OEM vehicle sound any harder that it is. As a matter of fact, it would have been a great couple of years for me and the companies that I worked for if it was easy. I also sincerely hope that this crisis can be a catalyst for changes in the automotive development and business model that will allow the industry to overcome these challenges. However, I am not sure how you maintain the quality and risk mitigation that is required to avoid product recall / litigation while keeping up with the technology cycles of consumer grade offerings that have little, if any, impact on public or individual safety. These are very big issues for very smart guys. I hope that the expectations of government and the public can be properly managed as the issues are worked through.

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