IOT solutions are now getting implemented across multiple industry segments. Europe and the US have mandated that by 2020 all automobiles be equipped with autonomous emergency braking and forward collision warning systems. In India, too, as the market for cars heats up further, the awareness is growing that for safety, it is necessary that vehicles need to be equipped with safety and security features.

Customers have started discriminating in favor of vehicles with security features. Automobile manufacturers are selling vehicles bundled with various assisted navigation systems features. These assist the driver in helping parking vehicles in tight spots, navigating blind turns, accepting or rejecting text messages, converting incoming and outgoing messages into audio and text formats, etc. Many vehicles come with reverse vision cameras that help safely reverse a vehicle.

These and other features we will discuss later are intermediary steps in building fully autonomous and connected automobiles. The technologies and services that will help achieve this goal are categorized in the industry as ADAS (Advanced Driver Assisted Services).

ADAS vehicle control systems use environment sensors like radar, laser, and vision to improve driving comfort and traffic safety. These help the driver recognize and react in time to potentially dangerous driving situations. Some surveys (O. Gietelink et al. July 2006) indicate that ADAS can help prevent up to forty percent of traffic accidents.

These are intelligent systems. They alert drivers to other vehicles, pedestrians, cyclists, and animals on and around the track. The system warns the driver of an impending collision. An automated voice message and alarm are sent out to the driver to take preventive action.

The solutions alert the driver to dangers like unsafe lane departures, vehicles ahead with the potential of leading to a forward collision, etc. They read speed limit signs displayed on the sides of highways and sound an alert each time they cross a speed limit. Other features include automatic cruise control and setting cruise speeds that vary with prevailing traffic conditions.

In each technology startup event that I have covered, I have come across a startup or two that is focused on building IOT innovations for automobiles and airplanes. In the Rise event held in Hongkong in the summer of 2016, I interviewed a startup (iScout) that was building a Heads Up Display unit mounted in the vehicle. It had most of the common ADAS features built into the device.

In the upcoming Web Summit in Lisbon in November 2016, I found Xesol Innovations, a Spanish startup focused on building a Smart Car solution for cars and other automobiles. To get a perspective on how Europe sees these innovations’ evolution, I talked with the venture’s Business Development head – Sergio Hernandez.

These are IOT (Internet of Things) systems. At the heart of these systems is an algorithm. It forms the neural brain of the automobile. These solutions are created by integrating and leveraging various technologies, including imaging, voice recognition, radio waves, GPS, analytics, machine learning, and artificial intelligence.

ADAS devices need to interact in real time with the cloud. The application is stored in the cloud. This means that if there is a loss of connectivity, interaction will cease, and the system’s effectiveness will diminish substantially. I find this to be a major weakness. There are just too many dark areas where connectivity is zero.

Sergio Hernandez told me this market is led by an Israeli startup Mobileye. Most major automobile manufacturers are sourcing ADAS solutions from this company. Xesol Innovation is hoping to break into this market.

Sergio claimed that their Smart Car solution is better, more precise, and more robust when compared to Mobileye solutions. I cannot, though, verify this claim. While Xesol Innovation was incorporated in 2012, Mobileye has been in business since 2007. The latter has a first-mover advantage.

On the other hand, we know that the technology business supports a later entrant. Theoretically speaking, Xesol solutions could disrupt Mobileye technology. The Singapore startup iScout, too, must be in the race. The competition in this segment is hot.

The precision of an intelligent system like the one under discussion depends on its algorithms. These extensively use Artificial Intelligence. The code has a self-improving mechanism built into it. The more data it receives, the smarter it gets.

Incumbents like Mobileye have an advantage here. They must be getting more and more data from systems that have already been installed on vehicles of existing automobile manufacturers. This will make the solutions over time more robust and precise. If regular updates are automatically installed on these vehicles, the ADAS services will be in a virtuous improvement cycle.

Xesol Innovations and iScout will have to make a technology leapfrog to compete in this space. I could not assess their state of preparedness to make this happen. But the market will very soon make that assessment on our behalf.

If new entrants like Xesol can make a breakthrough with major automobile manufacturers, they will quickly be able to bridge the gap with the market leader. We have seen this repeatedly happen in the technology market segment, where a late entrant has disrupted an incumbent.

Success will depend on the combination of technology and marketing skills that companies like Xesol Innovations can deploy. For that, they will need access to capital. Sergio told me that they are negotiating a round of funding.

With the autonomous vehicle buzz getting louder worldwide, the market for accepting and deploying ADAS-based systems is riper than ever. It will be technological excellence and innovation that will determine the success of a startup.

Additional reading:

  1. IIHS Status Report newsletter, Vol. 49, No. 4, May 29, 2014
  3. Gietelink, J. Ploeg, B. De Schutter, and M. Verhaegen, “Development of advanced driver assistance systems with vehicle hardware-in-the-loop simulations,” Vehicle System Dynamics, vol. 44, no. 7, pp. 569–590, July 2006.

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Sudhirahluwalia, Inc