Insights from Honda’s Silicon Valley Lab

By Stephen Ellison |  October 3, 2016

In Silicon Valley, the hype around autonomous vehicles and autopilot systems has been growing louder by the week. And Honda is determined not to be left behind: it has created a testing area with 20 miles of roadway on a former Navy base. But the carmaker’s Silicon Valley Lab, not far from Google HQ in Mountain View, is also working on nearer-term goals: making the driving experience better and safer; connecting cars to the cloud; and bringing new kinds of apps and entertainment experiences into the vehicle.

Naoki “Nick” Sugimoto, left, is the senior program director at the Honda Silicon Valley Lab in Mountain View, California. His role involves seeking out and evaluating the latest technologies that could be applied to the automotive industry, as well as connecting with the startup community and crafting partnerships that can deliver value to Honda and its customers in a region rife with cutting-edge companies.

Honda has had a presence in the Valley since 2000, but it opened a new facility in mid-2015. Sugimoto reports to Katsufumi (Kei) Nagatome, the Division Director for the Silicon Valley Lab.

While it began life as a computer science-focused research outpost, and then added a venture capital team in 2005, the Silicon Valley site is now a full-fledged innovation hub for the company. Sugimoto explained how it’s set up.

Areas of Focus for Connected Vehicles

Sugimoto’s team is currently targeting four primary, overlapping areas:

  1. Internet of Things. Connected vehicles will be a component of the IoT ecosystem, Sugimoto says, and Honda aims to create a cloud-based infotainment platform that can supply drivers with seamless access to information and media.
  2. Human-Machine Interface. To make human interaction with Honda cars safer, easier, and more convenient, the lab team is working on prototypes of ideas that involve new kinds of sensors, displays, speech-driven applications, and tactile interfaces.
  3. Vehicle Data Business. When the car is connected to the cloud, Sugimoto says, “we can actually see how those products are used … and we can collect more data from our products.” Then, the question becomes, “How can we use this data for the benefits of our customers in the future?”
  4. Apps and Content. Building a community of app developers and content creators. “Once our product becomes a platform for apps,” Sugimoto says, “there will be many people interested in building the apps and that will create some new business opportunities.

Accelerating Open Innovation

The lab runs two programs that have helped to source innovations related to the above areas. Honda Xcelerator was established in July 2015 to provide resources for outside tech innovators. It supplies funding to create prototypes, mentorship, test vehicles, and a collaborative workspace “for tech innovators across all funding stages who seek to transform the mobility experience,” according to the website. The second, Honda Developer Studio, was launched in November 2014 to get more software developers creating apps that would tie in to Honda’s systems in vehicles — including not just automobiles and motorcycles, but also the new Uni-Cub “personal mobility device,” a sort of self-balancing rolling chair for getting around indoors.

Honda Xcelerator is open to innovators big and small, Sugimoto says.

Nick Sugimoto’s Advice on Partnerships

Clearly understand and articulate the shared benefit of the partnership. Build trust through well-defined development goals and milestones. Agree in advance to how the resulting technology will be deployed and communicated. Be able to move at the same fast pace.

Working with Apple and Google has been a major focus for the lab in recent years. With Apple, Sugimoto’s team launched a platform called Siri Eyes Free in 2013. It was the first product to come out of the lab, Sugimoto says.

The project began with a conversation with Siri when it was still a startup, and Honda was seeking some sort of voice interface in its vehicles. When Apple acquired Siri and integrated it with its iOS, the project became much less convoluted on Honda’s end. “That was even better for us because putting the technology into a car takes a lot of time in terms of quality assurance – usually a few years,” Sugimoto says. “But once it was put into the iPhone, all we needed to ask of customers was to bring their iPhone into the car – and we connect the iPhone to our car entertainment system. Drivers just press a button on the steering wheel, and Siri answers back through the car’s speakers.” (The feature initially launched in 2013.) Drivers feel as if Siri is riding shotgun and helping with their tasks, whether it’s making calls, checking their calendar, sifting through emails, sending text messages, or playing music.

However, merely connecting Siri and the iPhone to the car wasn’t a perfect solution, because all the commands and responses were still being displayed on the iPhone screen, which created a driving distraction. “So we asked Apple to turn off the screen and answer back by voice,” Sugimoto says. “It’s a special mode in Siri, and they named it Eyes Free mode because you don’t need to look at it.”

The lab continued collaborating with Apple to introduce even deeper integration with a technology called CarPlay, which launched in 2015 in the Accord and Civic. (See the video below.) Essentially, CarPlay uses the car’s dashboard screen to mirror what is available on the iPhone. “Our biggest concern was driver distraction, of course, so we went through many testing processes and made sure it was acceptable from car industry standards,” Sugimoto says.

Around that same time, the lab had been in talks with Google on offering similar technology for Android users. Sugimoto recalls the Internet giant’s response to car companies back then: “No, we cannot do it because we don’t have the bandwidth.” As luck would have it, the Honda lab’s work in venture capital had created a connection to Android founder Andy Rubin, who was a senior VP at Google overseeing Android operations.

Rubin revealed to Sugimoto’s team that he was involved with a private company outside Google working on that very idea, a company called CloudCar. Together they built a prototype car that connects with the Android phone, with all the applications – Google Maps, Google Play music, text messages, calls – rendered from the phone to the car. “Our product [people] got really excited, because Android was open source,” Sugimoto says.

Honda’s product team jumped on, and then Google decided to take over the project, creating a car team internally to see it through, Sugimoto says. The partnership shifted from CloudCar to Google, and Android Auto was announced at the 2014 CES. The product was launched in the Accord and Civic last year. The lab developed yet another similar technology working with a small startup called Drivemode out of San Jose. Drivemode created an in-car user interface app, where a driver merely swipes the phone screen and can get functions like navigation, phone calls, and texts like CarPlay and Android Auto.

The difference is it doesn’t really use a car display – a user must attach the phone to the dash with suction cups or magnets. From a safety perspective, Drivemode was not an ideal way for drivers to interact with information on the phone, Sugimoto says. “So we worked with the company to create our prototype product for cars and motorcycles without the need for touching the phone,” he says. “On the steering wheel, you can actually use the Drivemode interface. We eliminated the touching the phone part.”

It’s an alternative to a costly in-dash system that customers want, Sugimoto says, especially those in developing countries that may use only Android phones and may be new to car ownership.

Providing Resources for Developers

The UNI-CUB pesonal mobility device, not yet on sale.

The Developer Studio is yet another way for Honda to collaborate with entrepreneurs and developers on the next generation of in-car technologies, Sugimoto says. As with Xcelerator, the Honda Developer Studio provides external innovators with a number of resources, including funding for prototypes, test vehicles, a collaborative workspace and mentors, all with no strings attached. It’s an additional resource developers can use to accelerate their work, Sugimoto says.

“What we are getting from this is an opportunity to see [what they’re working on] and an opportunity to interact with them,” he says. “And maybe some of their ideas are super-attractive to us and we may want to acquire them.”

“From a developer’s point of view, Honda is a great additional resource for them to use,” Sugimoto adds. “We want to create that kind of win-win situation. It’s been amazing – we have a huge number of developers already signed up.”

Working with Visa to Make Payment Easier

The next product in the pipeline, Sugimoto says, is in-car payments, which entails a partnership with Visa. Teams from the lab and credit card company built a prototype app that runs in a smartphone and connects through Android Auto and CarPlay, Sugimoto says. It allows drivers to use their car displays as a payment terminal.

For example, when using a parking meter, a driver just sets the time they want to park and clicks a “pay” button at the bottom of the screen. “You don’t need to get out of the car and take out your wallet,” Sugimoto says. “And you can even get a warning [on your phone] about expiration about five minutes before [it happens]… so you can come back and pay – or, even better, you can do that from your phone. You don’t even need to go back [to the meter.]”

“This is one example of a business opportunity that we created,” Sugimoto adds, “and we are working with Visa to introduce this in our product.”

Sugimoto also was excited about expanding the innovation program’s reach, with a 2015 sponsorship of MassChallenge in Boston, a nonprofit incubator that brings together more than 100 startups in the Boston area, London, and Israel; and support for the November 2015 launch of OurCrowd, an Israeli equity crowdfunding platform.

“It’s particularly interesting because Israel is actually the third biggest [country for] venture investment, after the U.S. and China,” Sugimoto says. It was also the home of Waze, teh widely-used navigation app that Google acquired in 2013 for $1.1 billion. “It’s a very entrepreneurial country, and the defense industry there spins out many technologies [with applications] in the commercial markets. That’s our really hot interest area as the car becomes an Internet device.”

For a downloadable slide presentation about the Honda Silicon Valley Lab, visit our Resource Center.