Can Built-in Offline-First Navigation Systems Improve Drivers’ Digital Experience?

Since last year, Telenav has offered tailored hands-free access to an in-vehicle connected navigation system via Amazon’s Alexa, providing a continuous experience from home to the road. Customers can, for instance, make a restaurant reservation from their home, get notified about when to leave to get to the restaurant on time, and automatically have the destination available in their vehicles. Similar voice-first functionalities are also provided by HERE.

At CES 2020, Amazon and Telenav announced an extension of their partnership, which started in 2019. With the newly extended agreement, end users will be able to use Alexa for all navigation-related functionalities, such as turn and lane guidance and adding a stop to the current route, even when outside of network coverage. The integrated offline functionalities are likely to add a competitive edge to Televav’s built-in navigation system, face a fierce competition between offline and online-first navigation providers, and consolidate Alexa’s footprint in the automotive sector.

In spite of concerns over data ownership and privacy issues, Original Equipment Manufacturers (OEMs) have increasingly offered Apple CarPlay and Android Auto smartphone integration in their infotainment systems. According to ABI Research’s Connected Car Market Data (MD-CCAR-104), the market penetration of Android Auto and Apple Car Play Smartphone integration increased 1,245% and 816% respectively between 2016 and 2019. ABI Research expects 26 million vehicles with Android Auto-equipped infotainment systems and 22 million cars with Apple CarPlay-equipped infotainment systems to be on the road by the end of 2020. Moreover, with a growing number of customers using their vehicle head units purely to mirror their smartphone applications, last year Renault-Nissan-Mitsubishi Alliance and GM selected Android Automotive Operating Software (OS) to power their infotainment systems from 2021.

Built-in navigation systems have mainly relied on offline-first services as their main competitive advantage, which were rendered nearly ineffective after Android and Apple applications started allowing cache map data. Since then, built-in systems have struggled to compete against online-first navigation competitors, mostly because of their lack of personalization, poor voice command, and poor interface. With the increase of connected cars—43% growth in new vehicles with connectivity from 2018 to 2020—built-in navigation systems started offering Over-the-Air (OTA) updates, real-time notifications, and voice command, which are functionalities already provided by their competitors. Telenav’s partnership with Amazon gives it renewed competitiveness as the company can now offer a seamless navigation experience - as the cache map data functionality is not automatic—with advanced voice commands offline.

Concerning voice assistant providers, Siri is currently the weakest competitor due to low smart home penetration, preventing the assistant from providing continuous experience in different environments. Google Assistant is Alexa’s strongest competitor. However, Alexa’s offline functionalities and growing embedded integration with not only OEMs but also other service providers such as Exxon and Mobil gas stations are significant differentials.

OEMs: Higher use of built-in infotainment functionalities would help OEMs restore control over the in-vehicle digital experience while providing a better experience to the final user due to higher in-vehicle software and hardware compatibility. OEMs that do not envision the use of Android Automotive OS should use strategies to stimulate the use of built-in infotainment systems by increasing the scope of their in-vehicle functionalities as well as the incorporation of external service providers’ services.

Navigation System Providers: Up until now, built-in offline navigation system providers have mainly adopted a reactive strategy when faced by the fierce competition from online-first navigation systems, resulting in low customer loyalty. To prevent more OEMs from utilizing Android Auto OS, companies should follow Telenav’s example and provide an online-level quality of service outside of network coverage.