Developments in connected technology are reshaping the automotive landscape, as well as the relationships among industry players. ICS is seeking to lead the way in terms of user experience. The company provides integrated custom software development and user experience design for touchscreen, mobile, medical, embedded and desktop applications. About four years ago, it entered the automotive sector and is now involved in development of infotainment systems for vehicles.
“At this point, we have four different in-vehicle infotainment (IVI) projects underway. It’s a major change in the business,” Mark Hatch, ICS’ Chief Operating Officer, tells Megatrends.
Inflow of new technology
Hatch believes the flow of new technology into the industry is leading to a change in traditional relationships between suppliers and their vehicle manufacturer customers. “What’s happening here is a disruption of the traditional kind of OEM/Tier 1 relationship. All this new technology is coming in from multiple directions. It’s coming in from the Internet of Things, which is the connected car aspect. It’s coming in from Apple and iPhones and people’s expectations of a user interface. It’s coming in from set-top boxes.”
Hatch explains that the convergence of these forces is resulting in an opening up of what was traditionally a closed industry. “It’s opening up this industry in a way that it’s never been opened before. It was a fairly tightly integrated industry for many years. And now with all this new technology suddenly coming in, all those relationships are being shaken up,” he explains.
Competition, moves in-house
As the industry responds to these rapid technological developments, Hatch believes the level of competition will heat up. He expects to see more Tier 1 suppliers start to subcontract work out more effectively. However, Hatch also raised the possibility of OEMs taking more capabilities in-house.
He points to the move by a number of vehicle manufacturers to set up local technology development units in Silicon Valley, noting: “OEMs from Detroit, Tokyo and other major vehicle manufacturing locations are going to Silicon Valley and opening up labs there… I see the brands or the OEMs directly getting involved with this technology, and not necessarily always using the Tier 1 supplier,” he says. Financially, this approach would involve “putting all the money up-front in terms of the costs of the development versus pro-rating it over the unit sales. The financial guys may get involved at some point on this in terms of helping figure out which way these things have to be organised. I don’t know if it’ll continue or not, but it’s certainly happening now.”
HTML5 vs Qt
Among the many new emergent technologies, several are fighting for dominance. In terms of application development environments, HTML5 and Qt have been rising in popularity, but Hatch sees Qt as pulling solidly ahead. “About two years ago there was a big switch to HTML5. One of the things we’re seeing now is a switch back to Qt,” he explained. In fact, all of ICS’s automotive projects at the moment are Qt-based. Hatch’s responsibilities include management of the Qt business, covering both products and consulting services. “For one of our initial research projects with Intel, we originally tried using HTML5 and were just not able to get the capabilities that we could with Qt. I don’t want to forecast that as a forever truism, because the only thing about technology is that no technology lasts forever. But at least we’re seeing a trend back towards the use of Qt.”
Challenges ahead
For ICS, this trend is “really good news” because all its 125 engineers are focused on Qt. “As that trend moves back into the auto industry from a technology point of view, that’s great news for us. If you need to staff up a large project, you can’t do that one person at a time. You have to go somewhere where you can get 20 people onto one project. And that’s what we can do,” he adds.
For ICS, the challenge now is responding intelligently to the feast of opportunities on offer. “The US economy is in an expansion mode. As a result, from a business point of view, we have more business than we’d previously expected month to month, which is great. And the challenge here for us as an organisation is to make sure that we continue to keep up the quality and not be seduced by the volume.”
Getting the right employees on board, and accepting the right projects, are both part of this challenge. “When you hire somebody, you’re making a long term commitment. Our challenge at this point is to hire the right people. At the same time, it involves trying to pick the right project, and avoiding projects which don’t go in the right direction strategically,” he says.
For ICS, much attention this year will be focused on making itself known in an increasingly crowded segment. “We have multiple projects, but we’re not a household name,” he said. “Our challenge is one of increasing our visibility by successes. We’re not alone here.”
Megan Lampinen
