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Connected Car Evolution: What's Next?

The consumers’ world is fast becoming a connected one; from cell phones to cars all the way to refrigerators. Folks at Cisco believe there could be up to 50 billion things connected to the Internet by 2020. The world as we know it is changing, and with each year that passes every aspect of a person’s day-to-day life will be increasingly connected.

All industries will have to adapt to this emerging reality to stay relevant, and the automotive industry is no exception. Automakers, mobile network operators and content and service providers alike; every area of the industry will need to focus on this trend. Changes will need to be made in the short-term to meet a new demand for connectivity, and long-term to stay ahead of where the connected-car will go.

Short-Term: Evolution of Connected Car Content and Services

The demand for connected cars is growing rapidly. In fact, a recent report from Park Associates stated that connected car features would dramatically influence a purchaser’s decision when buying a new car. Over 75% of U.S. car owners with at least one connected car feature—be it access to social media channels like Facebook or streaming music like iHeartRadio—will look for similar features when they shop for their next car.

In 2015, driving-centric apps and services will begin to appear and eventually become as important as infotainment content in the consumer purchasing process. The current automotive manufacturers focus on providing infotainment delivery (streaming music, social media channels etc.) reflects their desire to meet the expectations of digital lifestyle consumers who are heavy users of smartphones and want to use their favorite apps and services inside their cars. This is a logical first-step, but these savvy consumers will increasingly value apps that are truly useful and relative to the driving experience. An example is an app that proactively and dynamically recommends modifications to a driver’s high frequency routes to help them optimize fuel consumption, lower CO2 emissions, minimize engine wear, and avoid road hazards. As a result apps that don’t add to the consumer experience relative to driving will eventually die off from lack of use, and automotive manufacturers will replace them with more and more driving-centric apps to satisfy their customers and differentiate themselves from competitors.

To make driving-centric apps a reality, automotive manufactures and their connected car service providers must develop new use cases that leverage diagnostic data drawn from the car, consumer data about driving behavior and preferences, and other relevant data sets from app and service providers. Cars are increasingly being fitted with sensors to capture more and more information and cloud-based connected car service delivery platforms will play a central role by continuously connecting the car and driver to the outside world and managing the data and analytics to power driving-centric apps. For example, vehicle and driver data can be dynamically stored, updated, and analyzed in the cloud to determine when a vehicle service offer should be presented to the consumer by a local dealer including a promotional incentive for taking immediate action—a true “win-win” for all involved.

Long-Term: Evolution of Connected Car Capability and Integration

The European Union (EU) has a government mandated eCall initiative in motion that will require all new cars to be equipped with technology enabling automatic emergency calls in the event of an accident. This mandate will necessitate technology solutions such as embedded SIMs—versus smartphones—to ensure a consistent and reliable connection between the vehicle and wireless communication networks.

Similar discussions are underway in the U.S. for mandates on backup cameras and other safety oriented features. However, automatic crash notification and backup cameras are only the tip of the iceberg.

Innovative companies are working hard and fast to create technology that will enable 100% self-driving or “autonomous” cars. These first steps towards autonomous car can be seen in existing vehicle safety and convenience features like lane departure warning, automatic braking, and self-parking. As these features continue to evolve towards true autonomous cars—where there is no need for a steering wheel and pedals—governments will need to be increasingly involved to set minimum standards, regulations, and guidelines for technology adoption and integration into existing and new public infrastructure like roads, traffic signals, and transit systems. In the not too distant future automotive manufacturers will increasingly be pressured—and in some cases required— to comply with and participate in government sponsored policies and infrastructure initiatives. In the end this is a good and needs to happen, but it will take an exponentially larger amount of time, money, and technology to enable the evolution of the connected car as we know it today to the autonomous car of the future than anything the automotive industry has faced before.

Looking Forward

Tactical issues aside, these changes are certainly coming, and will dramatically impact both the automotive industry and related ecosystem of technology and service providers and the consumer driving experience. The connected car is here to stay. Companies that want to play a central role in seizing the business opportunity associated with it will need to embrace the technical challenges and be willing to sponsor and create the new and innovative technology that will make it happen.