Intel says that the connected car is already the third fastest growing technological device sector after phones and tablets. By the end of 2014, every new, big brand vehicle on sale will offer some sort of connectivity. But what does this really mean, and who will benefit most?
Starting with the drivers, and well before we see the advent of mass market self-driving cars, we can already see the benefits of GPS navigation systems, parking spot finders, video streaming for the kids, anti-theft tracking, system monitoring and breakdown warning systems, location tracking and a myriad of other ‘infotainment’ and internet connected offerings. At present, headlines tend to focus on the use of social media, integrated internet radio or clever ways to use voice commands.
We have already seen insurance companies offering special premiums to ‘safe’ drivers that allow their driving habits to be monitored by an in-vehicle device. That same technology may even one day be used by police to track speeding drivers and determine faults in accidents. Black box technology, similar to that used in aircraft, is already in place with varying degrees of monitoring of commercial vehicles.
For the carmakers, some of the technology is built-in whilst others are making it easy for personal mobile devices to be introduced by the owner utilizing apps that can be downloaded. Ford has categorically stated that connected technology is already selling more cars for them, and that over 50 per cent of consumers are swayed by the presence of an internet-capable device when looking for a new car.
Machina Research claims that by 2020, $600bn - or 20 per cent of the value of new connected vehicles - will be able to be attributed to ‘connected life.’ Intel alone is investing $100 million in the next five years in companies that can quicken the adoption of connected cars. They must be expecting a massive return on that investment otherwise, why would they bother?
Of course, none of this connected car ecosystem would be viable without the ‘connected’ part, presumably supplied by network operators offering high-speed data access, M2M and bundled services. But will this be enough of the ‘pie’ to keep them happy?
At this stage, that ecosystem seems to be very fragmented. There are lots of bit players but no-one seems to be leading with a fully integrated offering that combines the in-car devices, apps, infotainment, connectivity and support functions. Will the carmakers look to control it all and possibly become MVNOs themselves in order to have end-to-end ownership of the customer?
Perhaps it will be a trusted third party like an automotive association, a government body, an insurance company or maybe even Facebook or Google! Perish the thought.
Whoever wishes to play in one or more sectors of this ecosystem will certainly have to have some serious operational and business systems to back them up. They will need to have the capability to monitor hundreds of thousands of vehicles in real-time, manage third party products and services, deliver them as required and, of course, manage the revenue streams that must surely emanate from the service to make it viable.
Let me think, who already has systems like that in place?