Counterpoint Research: TomTom is uniquely positioned for the software defined car era

Counterpoint Research is a global technology market research firm specializing in the technology, media and telecommunications industries. As part of its ongoing analysis, it recognizes TomTom as an industry leader when it comes to in-vehicle experience, digital cockpit technology and navigation. We sat down with one of the organization’s founders to learn more.

Summary

• Developments in the smartphone world are a sign of what's to come in vehicles.

• Counterpoint Research says TomTom is uniquely positioned for the future of in-vehicle tech.

• TomTom's vertical integration allows it to offer a strong digital cockpit platform.

• Gen-AI and voice assistants are going to be so common, drivers will demand them in their cars.

Neil Shah is an industry analyst and founder of Counterpoint Research. With a background spanning engineering, telecoms, industry analysis, consumer electronics and now automotive tech, in particular in-vehicle infotainment, Shah is an insightful and forward thinker with an analytical eye that spans market segments.

Here’s what he has to say about TomTom's Digital Cockpit and automotive tech.

TomTom: Can you describe and summarize the lay of the land in the automotive IVI industry? How has it changed in recent years, where is it going and what are some of its biggest challenges?

Neil Shah:

There are a lot of parallels between vehicle tech and smartphones, and how these have evolved — especially IVI tech. Since most vehicle drivers are already using smartphones, they have become technologically mature and expect similar, or better, experiences from their IVI systems.

We have gone from basic phones, to feature phones, to smartphones with bigger displays and rich features, like cameras. We’ve also seen an increase in compute power and an increase in breadth of applications and connectivity. There is a clear and similar trend happening in the automotive industry and its IVI space.

We say that IVI has become more interactive and more intuitive. That has been possible due to the growth in semiconductors and compute power which has delivered better GPUs capable of powering those bigger displays. Alongside this we have Wi-Fi, 4G and 5G connectivity which allows us to connect easily and use more complex, data-heavy applications in the car.

While we’re seeing these technologies added in the dash, the wider cluster they’re part of is changing rapidly as well — to match the central display and provide a holistic experience. This is creating a step change in how drivers interact with their cars. You have knobs and then you go to a touchscreen, and that becomes a little unintuitive. So, across the board, we are seeing the entire instrument and infotainment cluster change, not just the displays.

The next stage in how we interact with the car is being driven by advancements in artificial intelligence and natural language voice assistants, which should help further elevate and integrate the interaction experience in a safe and natural manner.

TomTom: How can companies, like TomTom, stay ahead of emerging trends in automotive technology? And what’s making TomTom unique in the prevailing market?

Neil Shah:

When thinking about staying ahead of the curve, I like to look at the heritage or core competencies a tech company like TomTom brings to the industry. For example, in the mapping and navigation space there are just a couple of industry pacesetters, and TomTom is clearly one of them.

But as we trace its history, what makes TomTom unique is that it’s more vertically integrated across its business, especially with the digital cockpit, than most. TomTom has a long history of working in the vehicle, integrating systems and building in-car experiences, but it also develops the core technologies, such as mapping and navigation, which are important parts of that experience.

Having deep control over the software, navigation services, UX and UI, places TomTom in a unique position where it can optimize in-vehicle tech and experiences across the entire stack.

This leads to a more seamless, integrated solution that brings everything in the car together in one package — voice assistants, navigation, mapping, location search and so on. On top of that, TomTom’s steps to build a partner ecosystem to complement its first party offerings and bring that complete experience to OEMs, which might not have the expertise, positions the company very well in this booming market.

As we transition from buttons to screens to voice, being able to successfully integrate these multi-modal forms of vehicle interaction, and still provide an excellent and safe experience, will be what separate the players.

TomTom: We see increasing emphasis placed on in-car technology and being connected, but what role do TomTom and the digital cockpit have in delivering satisfying experiences for drivers and passengers?

Neil Shah:

Navigation is the number one app for the IVI right now. The driver’s impressions of the in-vehicle experience can be based entirely on how well the navigation works.

Having a very high quality, real-time map and an exceptional navigation experience is super important for every driver and every carmaker. If the experience is not that great, the driver will never use it and winning them back will be very hard.

There is a big opportunity to differentiate the in-vehicle experience from experiences mirrored from the phone and make it the preferred experience. The UX, navigation, ADAS and car sensors all need to be integrated. As cars continue to get more advanced, how they display information to the driver and how it’s consumed over the entire stack, not just the infotainment display, and how seamless it is, will be the key defining factors for good and bad IVI stacks.

This is where TomTom is going to play a big role. By owning the entire navigation stack, from the entire compute-optimized software to integrated rich content and services, and providing a complete digital cockpit experience, TomTom is in a unique position to offer something to OEMs and carmakers that can be fully integrated with their vehicles — that’s hard to compete with.

TomTom: What impact do you think the integration of TomTom's navigation technology has on the overall infotainment experience? And how is TomTom Digital Cockpit addressing the challenges of the industry?

Neil Shah:

One of the main challenges in the industry today is how to take control of the entire vehicle experience and improve it. As we move to software-defined vehicles, the software and IVI become the components that define what the car is like. So naturally, carmakers want total control over that, or they want to have a clear say on how it will be designed and developed, more so now than ever before.

TomTom Digital Cockpit, as a flexible, modular and integrated reference system, is offering carmakers and OEMs that opportunity in a unique way. Not only is it allowing carmakers to personalize their IVIs to their brands, while bringing market leading navigation and a growing collection of apps, it’s also helping them innovate and develop tech in areas where they previously lacked expertise.

Carmakers are seeing the value in working with partners like TomTom who understand how vehicles and their systems are made, can do software and, importantly, understand drivers.

The partner ecosystem TomTom is developing — the partnership with Microsoft and the Overture Foundation — is also important to the overall quality and potential of TomTom’s technologies.

There’s not one thing that makes TomTom Digital Cockpit or its maps address the challenges of the industry. It’s in all the above, everything happening together that’s making it such a valuable name in the industry.

[Want to read more about TomTom’s relationship with Microsoft? Click here].

TomTom: You met TomTom at CES and spent a couple of hours on the stand viewing the company’s demos, what stood out to you and distinguishes TomTom’s solutions from others in the market?

Neil Shah:

For me, TomTom’s Map Maker and developer experience stood out and is a massive step change from what I saw just a couple of years ago.

It’s exciting to see because I think this will enable and catalyze overall development and innovation with TomTom’s map. As that improves, more partners will join the ecosystem and further innovate — whether on maps or the digital cockpit. This will directly, or indirectly, affect and improve the IVI experience too.

The other thing that stood out to me was obviously the new maps, [TomTom Orbis Maps]. They are fantastic and the demo was great. The way the look and feel of the map is evolving is another step change.

At the time, I was discussing it with Corinne and said, “This is such a beautiful map.” With integration, hopefully we see that beauty preserved after OEMs, carmakers and other developers have used and built on the map for themselves.

I want to see that map in my car.

[You can watch a version of that demo, click here.]

TomTom: Partnerships are proving to be key in the evolution of in-vehicle technology. How important are they to digital cockpit technology and what partnerships of TomTom’s excite you the most?

Neil Shah:

The Microsoft partnership and the relationship TomTom has with the Overture Foundation are two particularly exciting examples.

Open data is also incredibly important to building good tech today. We need more open data, and we need to do it in a collaborative way so people can innovate their differentiations on top of it. With base data that’s open there will be fewer silos, the experience of working with maps and location data will be more uniform and there will be accessibility for everyone. As a combination, this could lead to great things.

Collaboration and openness, and being strong on MS Azure, are massive advantages. Many enterprise developers use Azure and having the maps integrated into that makes it easy for devs to work with and is going to help obtain more probe data to feed back into the map and elevate the overall map quality and content.

And of course, working with Microsoft is helping bring things like ChatGPT-powered AI voice assistants to the car and in-vehicle experience, which is helping bridge the gap between those creating these technologies and the driver, while also acting as a bridge between where we are now and the next phase of the industry.

TomTom: Generative-AI powered voice assistants are fast entering the automotive industry. Are they becoming the new industry standard? How do you see this technology becoming a part of the IVI stack?

Before gen-AI technologies become common in vehicles we need the base, the compute, to take full advantage of gen-AI capabilities and to have the models running natively on the device, the car. There will also be the cloud to get the data, but we will see a hybrid approach where you might go to the cloud for some information while some processing is done onboard the vehicle. But for the ultimate experience, most of the computation will have to happen on a model running at the edge, on the car itself.

Even though the human-machine interaction (HMI) is multimodal ¬— using buttons, screens and so on — voice is emerging as the most natural and safe way of interacting with the car. If we can replace all the stuff that’s not needed, like extra clicks that can prove to be distracting, and replace that with one natural command providing targeted and accurate action, then we can transform how we interact with cars while also making them safer.

Gen-AI isn’t just about voice, though. Personalization is going to be a big thing for AI-based IVI in the future. Personalizing the in-vehicle experience and blending personal data with OEM data or partner data, will give faster answers to queries, with improved accuracy. And with AI, carmakers can create more personalized experiences, the lights of the cabin can be changed to suit the needs of the driver before they ask, for example.

Adoption of this technology should be quick too. Voice is the most natural way to interact, and smartphones are priming us to use it every day. We’re already starting to see more gen-AI capable phones hit the market, unlocking unique experiences, and this will explode over the coming year.

Soon everything will have a Copilot-like prompt. Every device will have a large language model (LLM) running in the background, and everyone will become used to using voice to get what they want, cutting through application silos. It will be a very natural progression. Consumers will be waiting for cars to adopt it faster!

TomTom: You’ve followed TomTom and its evolution for many years, you’ve even ranked TomTom as an industry leader in the infotainment sector. What has contributed most to TomTom attaining that recognition?

Neil Shah:

TomTom has come a long way since its early days in navigation and mapping, and it continues to keep moving forward.

Further evolving maps and developing a fully integrated digital cockpit stack as a platform is delivering what customers want. It’s a step change in terms of user experience and possibility.

Alongside this, the partnerships and the company’s market strategy over the past few years are what’s allowing TomTom to take its score to a very high level as we [Counterpoint Research] rank location technology companies.

It is difficult to match in terms of a more integrated location platform offering, from location-centric software to services powering advanced in-vehicle experiences.