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Self-Driving and Connected Cars: Conference Highlights Clash of Cultures Between Auto and Tech

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At a CE Week 2014 panel in New York City, it was unclear whether cars built for the "Internet of Things" age will be designed around a common platform or differentiation.

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There's no mistaking this week's consumer electronics show, held at the Metropolitan Pavilion in New York City, for January's CES event in Las Vegas. It's warmer, the panel discussions take place in a basement, and the journalist-to-finger-sandwich ratio is less favorable. One constant, however, is the automobile industry, which once again is driving much of the agenda.
 
CE Week kicked off on Tuesday with a conference on connected cars, and chair Doug Newcomb was blunt in his appraisal: "We have a lot of hurdles to overcome." Those hurdles include regulatory overtures by the Transportation Department, as reported by the New York Times earlier this month. They also include a recent survey from J.D. Power, which found that "almost all automakers are struggling to [introduce new technology] flawlessly with some consumers indicating that the technology is hard to understand, difficult to use, or simply does not work as designed."
 
There are problems -- and opportunities -- everywhere. A National Highway Traffic Safety Administration rep was on hand to discuss the dangers of distracted drivers, and the NHTSA's role in finding a solution. Pioneer's (TYO:6773) CMO spoke of the challenges of keeping software current on old cars when the average automobile is 11 years old; not surprisingly, he saw this as an opportunity for the aftermarket products sold by Pioneer. The Auto Alliance's Gloria Bergquist noted that 90% of drivers have their cell phones in their hands, on their laps, or in their cup holders, and suggested that in-car technology is "an opportunity for connected consumers to drive more safely." Then again, the latest car dashboard systems have been "incredibly disappointing," if you ask PC Magazine editor-in-chief Dan Costa.
 
A more fundamental issue came up during a panel discussion on cars and the "Internet of Things," which began, appropriately enough, with the question: What is the Internet of Things? Intel's (NASDAQ:INTC) Joel Hoffman described it as a "system of systems of things." +Citizen's Emanuel Brown referred to it as "a greater fluidity of service," and Cisco's (NASDAQ:CSCO) Andreas Mai saw it as "a way to create new experiences." General Motors' (NYSE:GM) Tim Nixon offered the most coherent and least arguable description, calling the IoT "an interesting term."
 
Without a common definition, the automotive and tech industries will struggle to build a common platform. Throughout the discussion, Intel and Cisco focused on the need for standards and the ability to integrate devices like smartphones into the car. However, it's evident from the automakers' approach to dashboard displays that what they really want is differentiation. Standardization is great for companies that sell infrastructure like Cisco, but at the end of the day, GM isn't going to have much interest in any approach that commoditizes the cars it sells. The burning questions about the IoT are the ones that never get asked, like who decides what things get connected, and who controls the data being trafficked.
 
This fault line came up again during the evening's headline event, a forum on self-driving cars. It was a strange affair; Google (NASDAQ:GOOG) wasn't around, the only automaker present was Volvo, and the entire discussion was drowned out by the noise from an open bar "networking event" taking place in the neighboring room. From what I could hear, there were two main takeaways. First, the panelists generally agreed that the transition to automated driving will be gradual (the automaker approach) rather than all at once (the Google moon shot.) There was much less agreement on how to split the baby between the standardization necessary to make automated cars a reality and the differentiation needed to make them attractive. "Systems have to adapt to the way that people like to drive or people won't adopt them," offered John Absmeier from Delphi Automotive (NYSE:DLPH). On the other hand, Nvidia's (NASDAQ:NVDA) Danny Shapiro stressed the importance of a common approach.
 
In any event, the problems with the connected car aren't limited to itchy regulators and poor product designs. There's a deeper conflict taking place between platform-building and car-making, and between two industries with different approaches, different business models, and different economics. It would have been nice to see a panel discussion on that.
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