Connected Cars

Smartphones Take the Driving Seat

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So where are the windscreen wipers?
  • Why it matters

    Why it matters

    Car makers have traditionally ruled the lucrative marketfor smartphone-operated in-car technology, but specialists such as Peiker Acustic are increasingly eating away their profits.

  • Facts

    Facts

    • Peiker Acoustics had sales of €173 million ($218 million) last year.
    • The company has supplied Mercedes Benz with Apple iPod connector sets.
    • Its main rivals are now the tech giants Google and Apple.
  • Audio

    Audio

  • Pdf

Few consumers will have heard of Peiker Acustic, as is often the case with many of Germany’s midsize companies. Yet many of them will have used their products. The family-owned company is one of the pioneers of in-car smartphone systems, making, for example, devices that can hook up an Apple iPod to a dashboard music player.

The idea of systems, even self-driving cars, are becoming popular, but were once ridiculed by the automotive industry.

The business was founded directly after World War II by Heinrich Peiker and his father-in-law, Paul Beerwald. As Beerwald & Co., the firm specialized in the production of high-quality microphones. For example, when the American balloonist David Simons ascended to the then-unimaginable altitude of 30,000 meters in 1957, helping pave the way for space flight, he had a Peiker microphone in his helmet. And a Peiker TM70 microphone enabled tape recordings on the first big Himalayan expeditions in the early 1960s. The business changed its name to Peiker Acustic in 1967.

Since the development of mobile communications in the 1990s, the company, based near Frankfurt, has developed at breakneck speed. In 2005, when an Apple iPod was fully integrated into a Mercedes Benz car for the first time, the connector set came from Peiker.

The idea of in-car smartphone systems becoming popular was once ridiculed by the automotive industry.

Today, with about 900 employees, the company supplies nearly all big vehicle manufacturers. Last year, sales were about €173 million ($218 million). This year, they could exceed €200 million. While reluctant to give specifics, Chief Executive Andreas Peiker, said that after the hard times of the financial crisis, the company is in the black again.

Connectivity in cars has been the key. But Peiker’s success is not good news for car makers. In the past two decades, they have profited by offering hardware accessories that provide better service and comfort to customers. Experts say that in the future, such hardware will become increasingly simpler to use and that smartphones will one day take over from dashboards as the principle vehicle control center.

Peiker offers three good reasons to back up this claim. First, from the cost perspective it makes sense to use the computing capacity and functionality of a smartphone. It also allows for quicker reaction to the newest trends in mobile communications. And last but not least, in-car networking allows customers to use their own personalized devices.

The downside is that many accidents, often involving deaths, occur because drivers are distracted by their mobile devices. A recent campaign video made by car maker Volkswagen highlighted the distracting effects of text-messaging in traffic, and became a hit on YouTube.

The Fraunhofer Institute in Munich has noted in a report that only really important information should be delivered digitally to drivers.

“We have decades of experience at our disposal in the area of vehicle interface. Here, we complement Apple, Google and other competitors.”

Andreas Peiker, CEO of Peiker Acoustics

Despite these concerns, Silicon Valley giants have also discovered the potential of smartphone networking in cars. At the Geneva Motor Show earlier this year, for example, Apple presented its new Carplay system, which can integrate an iPhone into the infotainment systems used by Mercedes, Ferrari and Volvo.

Mr. Peiker said he’s not too concerned about the development. “We have decades of experience at our disposal in the area of vehicle interface,” he noted. “We complement Apple, Google and other competitors.”

Development cycles of cars differ from those of the communications industry. With the car, it might take seven years before a full model change is made. In the communications world, innovations usually happen every year. Experts at Peiker are watching closely so that they can target changes in the communication sector and offer flexibility. This means that a four-year-old car should still be able to integrate the latest smartphone.

Mr. Peiker views voice control as a trend. Audio emails and text messages could become as popular as speech control, which has begun to replace the need for buttons on the dashboard or steering wheel.

Other manufacturers, for example, are experimenting with microphones in the seat belt. Mr. Peiker preferred positioning them over the driver in the car’s roof lining, and the placement may be ideal in many cases, depending on acoustics in the car.

As for the future of Peiker,  the 63-year-old executive said he is flexible about leadership succession. “It must not inevitably be biological,” he said. Two members of the company management might be candidates to further perpetuate the family business.

 

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Christian Schnell is an editor on Handelsblatt’s companies and markets desk, covering the automotive industry. To contact the author: schnell@handelsblatt.com

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