Self-driving cars are on their way, but their ETA is a big "Are we there yet?"
A succession of announcements from carmakers of late show impressive technology advances, but getting them sanctioned as street-legal will take time.
"We think over the next five to 10 years more cars will have the ability to navigate stop-and-go traffic," said Constantine Samaras, an engineering professor at the academic birthplace of autonomous driving technology, Carnegie Mellon University, in Pittsburgh.
hen autonomous driving capabilities do arrive, a new poll by the school shows, people will use the free time to do things like shooting and posting photos — including selfies — in their self-driving cars.
"You saw the concept car that was unveiled at CES (the Consumer Electronics Show) by Mercedes — the front seats turn around like a living room," Samaras said, adding that BMW showed park-assist at CES and Volkswagen's (OTCPK:VLKAY) Audi made the trip there in an autonomous car. (VW uses the term Piloted Driving.)
Volvo and other carmakers have their own versions of autonomous cars. Carnegie Mellon's College of Engineering recently provided a test drive in a fully autonomous General Motors (NYSE:GM) Cadillac SRX for members of Congress.
Plenty of testing is going on. Near term, though, bet not on autonomous cars for sale but on increasingly connected cars and active safety features such as automated braking and lane departure prevention. Both are steps on the road to self-driving cars, and are where the chips and other technology are going in significant quantities.
"Initially a lot of these features were appearing in higher-end luxury vehicles, but now costs are coming down," Jim Hines, an analyst at research firm Gartner, told IBD. The safety benefits of advanced driver assistance systems, or ADAS, are increasingly being offered on lower-priced vehicles, he says.
"Be it connected car entertainment systems that work wirelessly with smartphones, or active safety features, anything related to better HMI (human-machine interface) is going to have better potential," Hines said. HMI, he says, will help keep driver distraction in check.
"Chip company Nvidia (NASDAQ:NVDA) is doing a lot in this area," he added. "And Qualcomm (NASDAQ:QCOM), I think, has some opportunity. They're not big in the automotive market now but they have modems that can be used and an application processor."
Hines also points out that car entertainment system makers are positioning for a space in the connected car of the future. High-end audio stock Harman International Industries (NYSE:HAR) jumped sharply after reporting fiscal Q2 earnings early Thursday and a pact with China Internet giant Baidu
"We are convinced that demand for a rich connected car experience is sustainable and will continue to drive take rates," Harman CEO Dinesh Paliwal said on a conference call with analysts.
"Replicating our work with Google and Apple for their car and integration solutions, we're the first Tier 1 to work with Baidu to create a tailored in-vehicle user experience with their car life solution ...," he said, speaking of the automotive opportunity in China. "We will work with Baidu to integrate advanced connectivity, entertainment features and location-based services into our head units, resulting in a more immersive connected-car experience."
Among connected-car suppliers highly rated by IBD, Nvidia gets a 95 Composite Rating out of a possible 99, factoring in metrics such as earnings growth and stock price gains. Ambarella (NASDAQ:AMBA), IBD Leaderboard stock NXP Semiconductors (NASDAQ:NXPI) and Skyworks Solutions (NASDAQ:SWKS) each have a 99 CR.
Highways And Airwaves
Gartner predicted this week that by 2020 one in five vehicles, or about 250 million, will have a wireless network connection. It says these developments in connected cars will enable new in-vehicle services and automated driving capabilities.
Still, "there's a great deal of hype around this whole subject right now," Hines noted.
"The current state of technology in ADAS does not necessarily rely on any connections — these are primarily sensing and processing functions — cameras and sensors that can create an environmental model of what's going on around the vehicle and send alerts or take action," he said. "As this technology matures and evolves it will include a connected aspect ... technology being discussed is vehicle-to-vehicle and vehicle-to-infrastructure communication using what's called dedicated short-range communications."
The idea, he says, is that cars talk to each other through short-range data communication links very similar to Wi-Fi in order to share information about things like speeds on the road or hazardous conditions. In vehicle-to-infrastructure communications, a car communicates with infrastructure such as the area's traffic light system.
As to fully autonomous cars, Hines says, if you consider what it will take to have a system that is robust and reliable enough to operate in all the varying conditions a car might encounter, "that's very challenging.
"I think the pieces are largely there, in terms of the sensor technology and the processing power to do all of this," he said. But "a lot of this really comes down to the algorithms and software developments, which if you think of companies' core competencies is what Google (NASDAQ:GOOGL) has."
If there's any company he would expect to have the capabilities and resources to develop a robust and reliable self-driving car system, Hines said, "it would be Google."
Google has been working on its own self-driving car, one that looks simpler and a lot more like Herbie The Love Bug than the luxury self-driving cars that automakers are prototyping.
Smartphones are looking key to the upcoming convenience technologies.
"Over the next five to 10 years you'll see a lot more cars with things like 'virtual valet' — it parks itself via some smartphone app like the one unveiled by BMW," Samaras said.
Tesla Motors (NASDAQ:TSLA) CEO Elon Musk not long ago talked about that eventual capability, using hardware that's now being built into its Model S electric sedans.
For instance, having the car "carefully back out of a tight garage, and pull up to your door ready for your commute," he said in announcing Tesla autopilot features in October.
Apps to remote-lock and unlock doors, and help find a parked vehicle, have been out for years at Apple (NASDAQ:AAPL) and Google app stores. But self-driving cars are apt not only to interact with mobile devices — they'll also free up time for people to use mobile devices without the risk of distracted driving.
In Carnegie Mellon's survey of 1,000 people on what they want to be able to do in their self-driving cars, the following came out on top:
1. Use mobile devices. 2. Eat lunch. 3. Read a book. 4. Watch movies. 5. Do work. 6. Pay bills. 7. Play video games. 8. Put on makeup. 9. Plan a trip. 10. Shoot and post photos or selfies.