In the same way that the mobile phone has become much more than a device for making calls, the car has evolved beyond its original purpose as a vehicle for getting from point A to point B. Automobile manufacturers are now rolling out a number of new value-adding services for drivers and taking advantage of real-time data analysis and heightened levels of connectivity between their cars to do so.
And they’re not doing it alone. The rise of has seen a blurring of the lines between traditional industries, which has in turn brought new partnership opportunities into focus. For their part, automotive companies are working closely with mobile operators to bring the convenience of our favourite applications, content, and services to their vehicles. The market for these systems is growing rapidly – recent estimates suggest global revenue from providing value-adding connected car services will top $150 billion by as soon as 2020 .
We work with one of the world’s largest telecoms operators, who has partnered with a leading American auto maker to integrate the latter’s cars onto its mobile network. With a service built on our connected car platform, they’ve made it possible for customers to access many of the same apps they use on their smartphones and tablets while on the road (on a personal note, being able to listen to my Spotify and Pandora playlists in the car has made my daily commute considerably less painful).
The convergence of digital technologies is also bringing many businesses into the fold that at first glance seem far removed from the automotive industry. Consider those vehicles fitted with sensors that beep wildly when you’re about to back into a bollard or fellow driver. This technology has proven so popular with drivers that a number of luxury car brands including Bentley, Aston Martin and Tesla are partnering with computer graphics specialists to install high definition graphic sensors in their cars to give them an even more accurate view of what’s happening on the road.
The endgame for all the players involved is a better overall service for drivers and passengers, which will in turn help build customer loyalty. It’s safe to assume that drivers who have bought into a particular connected car ecosystem will be more likely to stick with the same mobile operator and car manufacturer, so long as they continue to receive a high quality service. Building an effective and engaging proposition today is therefore crucial to earning long term appeal.
Of course all this begs the question of who will actually pay for car services. The majority of people are accustomed to making a one-off payment when purchasing a car, but with mobile services now being embedded in our vehicles there is another bill to be paid in terms of connectivity. Will this added cost be rolled into the initial payment? Will our cars start being included as devices on our mobile bills? How will people be charted for roaming and data usage?
Another challenge arises with regards to the difference in product lifecycles between the automobile and mobile industries. While operating system upgrades and extensions to apps are rolled out almost constantly for smartphones and tablets, car manufacturers have traditionally worked on a five year cycle. Players on both sides will need to finds ways to bridge this gap and deliver on what customers expect from their vehicles and the connected services they come with.
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It’s also worth noting that the growing popularity of the connected car will reshape the dealership model. Salespeople on the floor will need to be able to teach customers how to use the advanced technologies installed in their vehicles, and test drives will become much more involved than a simple cruise around the neighborhood. These changes will require heightened levels of training and tech-savviness for virtually every employee on the front line.
Finally, safety and reliability remain prime concerns for every car manufacturer. While innovative apps are everywhere today, it’s unlikely that automobile companies will throw open their doors to all of these. They will want to limit the number and type of apps that people can access while at the wheel, which will require some level of control over developers.
There’s no doubt today’s business models will need to evolve to address these issues, as well as others that are sure to arise as connected cars become more advanced. Adaptability and scalability are the hallmarks of a successful digital business and the leaders of the connected car market will be no exception. This is the nature of the disruption economy.
One thing is certain: the wheels are already in motion. The automotive industry is on its way to delivering what may be the most immersive connected experience out there. From in-dash apps to specialised sensors, connected cars already have more digital touch points than any of our other smart devices, and this is only the beginning. We’re still just scratching at the surface of what’s possible, and I’m certain some very surprising ideas are just around the corner.
