Voice Recognition in Cars: The Growing Battle for Dominance

The Rise of Voice Recognition Technology

Initially a premium offering exclusive to high-end automobiles, voice recognition technology is now becoming increasingly prevalent. A growing number of vehicle manufacturers are integrating this feature, aiming for a unified experience linking cars, homes, and personal devices.

The potential to engage with consumers while they are driving – and to gather valuable data – has spurred significant interest. Automakers, technology leaders such as Amazon and Google, and investors are all actively seeking a foothold in the expanding connected cars market.

Expanding Beyond Automobiles

However, the applications of voice recognition extend far beyond the automotive industry. It is anticipated to be a crucial component in the development of future autonomous vehicles.

As self-driving technology matures, drivers will progressively relinquish direct mechanical control of their vehicles. This shift will necessitate reliable and intuitive voice command systems.

Furthermore, innovative uses for voice recognition are appearing in diverse sectors.

• Automated drones are benefiting from hands-free control.
• Two-wheelers are incorporating voice assistance for enhanced safety.
• Even the emerging field of air taxis is exploring voice-activated systems.

Investment and Growth Potential

Consequently, the voice recognition market presents substantial growth prospects. Opportunities are available for both large corporations and smaller enterprises.

The increasing demand for seamless connectivity and automation is driving innovation and investment in this transformative technology.

Market Growth and Potential

The prevalence of vehicles equipped with in-car connected services – a prerequisite for voice recognition functionality – has increased significantly. Rising from 30% in 2018, it reached 45% in 2020, and projections from IHS Markit suggest this figure will climb to 60% by 2024.

This expansion is largely fueled by automotive manufacturers striving to enhance the overall consumer experience. Kyle Davis, a senior analyst at IHS Markit specializing in vehicle experience and connected car technology, emphasizes that voice control is a crucial component of modern user interaction.

Consumer Perception and Challenges

Despite the increasing adoption of voice recognition, consumer satisfaction remains a challenge. J.D. Power surveys consistently reveal complaints regarding the performance of these systems within vehicles.

John Scumniotales, Director of Products and Design for Alexa Auto at Amazon, acknowledges these concerns. He views this as a key opportunity for Amazon to refine the in-car experience through Alexa and strengthen its market position.

A Multi-System Future

While several prominent companies dominate the voice recognition landscape, Greg Basich, Associate Director of Strategy Analytics’ global automotive practice, predicts a diverse ecosystem. “A single system or digital assistant will not become ubiquitous in vehicles,” Basich stated.

Instead, a proliferation of systems is anticipated, indicating a continually expanding market.

Competition and Industry Dynamics

Startups entering this field will face considerable competition from industry leaders like Google and Amazon. Basich notes that success for a new entrant requires a truly innovative or differentiated offering.

Automakers generally favor collaborations with larger, well-established companies capable of providing sustained technological support throughout the vehicle’s lifespan. Amazon’s Scumniotales corroborates this, highlighting the substantial investment needed to develop and scale this technology for the automotive sector.

Opportunities for Diverse Players

However, analysis reveals that the market isn’t solely dominated by the largest corporations. Automakers are demonstrating a willingness to explore partnerships with a range of companies.

This suggests that opportunities exist for multiple players to contribute to the evolving landscape of in-car voice recognition technology.

Key Industry Players

While collaborations between car manufacturers and tech giants like Amazon Alexa and Google frequently garner attention, Cerence actually dominates the embedded virtual personal assistant market. According to industry analysis by Davis, Cerence controls an impressive 87% of this sector.

Prateek Kathpal, Cerence’s CTO, recently stated that the company’s relatively small size allows for greater agility in taking risks and fostering innovation, unburdened by the financial constraints often faced by larger organizations.

In January, Cerence introduced Cerence Drive, a new platform designed for mobility assistants. This platform integrates both cloud and embedded technologies to deliver a more refined and precise AI voice-recognition experience. The system supports over 70 languages and can process commands even when occupants speak in multiple languages simultaneously.

BMW has been a long-standing customer of Cerence, utilizing their technology since the year 2000. Simon Euringer, head of personal assistants and voice interaction at BMW, highlights the effectiveness of Cerence’s hybrid system, which leverages both embedded and cloud-based processing.

Euringer explained that systems relying solely on the cloud are less effective in areas with poor connectivity, impacting the user experience. BMW also integrates other voice assistants, such as Amazon’s Alexa, to broaden the range of information accessible to drivers.

Cerence is also expanding its reach beyond traditional cars. In January 2021, the company launched a platform tailored for two-wheeled vehicles like motorcycles, e-bikes, and scooters, offering features like navigation and music control. Exploration into voice control for drones, enabling automated delivery, is also underway.

Kathpal emphasizes the significant investment and time required to acquire the necessary data for a successful voice recognition system, making it a challenging market for startups. He notes that it typically takes four to five years to bring a car from initial design to production, delaying revenue realization.

Euringer echoes this sentiment, believing that larger companies are better positioned to succeed due to the extensive resources needed for voice recognition technology development, in-cloud processing, and language model training.

Despite these hurdles, some startups are achieving success.

SoundHound, established in 2005, has secured $300 million in funding and currently employs approximately 400 individuals. In 2015, they launched the Houndify Voice AI platform, enabling custom conversational interfaces for a wide range of products, including cars.

Michael Zagorsek, SoundHound’s COO, asserts that voice is becoming an increasingly powerful interaction method as more devices become interconnected. He claims SoundHound possesses a unique and superior voice technology compared to competitors like Google.

A key differentiator for SoundHound is its technology’s ability to comprehend speech in real-time, eliminating response delays. The company’s technology also excels at understanding complex, naturally-spoken queries through a process called “Deep Meaning Understanding.”

Smaller voice recognition startups, such as Speak With Me, are also striving to establish themselves. Ajay Juneja, founder of Speak With Me, positions his company as a disruptive force in the market.

Speak With Me’s “guardian angel” system utilizes multiple cameras, microphones, interior radar, and other sensors to monitor vehicle occupants and pets. This feature, according to Juneja, distinguishes their technology. The system can also detect emotional states and offer interventions like soothing music or guided breathing exercises.

Juneja highlights his product’s superior context-tracking and memory capabilities, as well as the company’s AI workflow automation, which allows for continuous model updates at minimal cost.

While facing competition from well-funded tech companies, startups like Speak With Me and SoundHound benefit from the freedom to innovate, a crucial advantage in this evolving field, according to Zagorsek.

Google is also significantly expanding its presence in the automotive sector. In 2018, the company extended Google Assistant to cars, aiming to integrate the benefits of both home and mobile experiences into the vehicle.

Initially hesitant automakers have since partnered with Google. Google Assistant was first integrated into the Polestar 2 via Android Automotive OS, alongside Google Maps and Google Play. GM, Nissan, Volkswagen, and Volvo Cars followed suit, embedding Google apps and services.

Investment in Automotive Voice Technology

A number of investors, including the venture capital divisions of major automakers, are recognizing the potential held by emerging companies in the tech sector. Henry Chung, who leads CRADLE – Hyundai Motor Group’s venture capital and open innovation arm – explains that startups frequently pioneer the most inventive solutions to complex challenges.

Hyundai has both invested in and utilizes the services of SoundHound. Their music-tagging technology was initially implemented in the 2015 Hyundai Genesis Sedan. Currently, SoundHound’s voice recognition capabilities are featured in the 2021 Hyundai Elantra and Elantra Hybrid models, as well as the 2022 Hyundai Tucson SUV. Chung affirms, “We have strong confidence in their technology; that’s why we’ve integrated it into our vehicles.”

Nils Schanz, responsible for voice assistant and user interaction concepts at Daimler, emphasizes that dependence on established platforms like Alexa and Google is insufficient. He expresses a willingness to collaborate with smaller firms and startups, provided they offer innovations that enhance Daimler’s existing capabilities and deliver added value.

Daimler began incorporating SoundHound’s technology into Mercedes-Benz vehicles sold in North America starting in 2018. Within the U.S. market, SoundHound powers the cloud-based applications, while Cerence provides the embedded software component within the vehicle itself.

Schanz explains that this approach of utilizing multiple partners allows for the selection of optimal components to create a superior in-car experience. Employing smaller companies enables a level of customization specific to Mercedes-Benz, differentiating their voice experience from competitors. He states that a standardized solution from Google or Amazon “would not adequately address the needs of our customers; we aim for a highly tailored experience.”

Amazon has responded to the growing demand for personalized solutions. In January, the company launched Alexa Custom Assistant, enabling automakers to create branded experiences that function alongside the standard Alexa platform. This allows for the development of unique wake words, voices, and vehicle control features, while still leveraging Alexa for functionalities like smart home integration.

Stellantis, formerly FCA, announced in January its intention to integrate Alexa Custom Assistant into its vehicle lineup. Vince Galante, Stellantis’ chief designer for user experience, highlights the widespread recognition of Amazon Alexa. He believes bringing this familiar voice assistant directly from the customer’s home into their car “establishes consistency and familiarity,” resulting in a seamless and more personalized experience, alongside the benefits of Amazon’s custom skill development.

Chang notes that Google is also offering avenues for automakers to personalize their voice recognition systems. However, he points out that Google does not currently provide a fully white-labeled solution. Despite Google’s resources and potential, Chang believes the emerging nature of the voice assistant industry presents opportunities for any company capable of developing groundbreaking solutions.

Kristin Kolodge, executive director of driver interaction and human machine interface at J.D. Power, corroborates this view. Consumer surveys conducted by her firm consistently reveal issues with voice recognition systems, across all vehicle models and voice assistants. Despite this frustration, Kolodge notes consumers remain interested, creating a significant opportunity for a company to “effectively harness the potential of voice control.”

“Successfully fulfilling these consumer expectations represents the key opportunity moving forward.”