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Top trends in the connected car market

BI Business Intelligence estimates more than 380 million connected cars will be on the road by 2021 – and the market is picking up speed faster than expected, even from a year ago. In the U.S., Parks Associates estimates the U.S. connected vehicle market will include 61% of the light vehicle fleet by 2012, or about 183 million cars – up from about 60 million in 2015.

“When you think about how fast the space is changing, it’s not about traditional [instrumentation] plus travel infotainment or basic amplification and speakers. It has moved on to full connectivity intelligence, over-the-air updates, cybersecurity, [a] scalable end-to-end service platform,” Harman CEO Dinesh Paliwal recently told investors.

Among the top trends in the connected car market:

Focus on safety features and advanced driver assistance systems
Kumar Krishnamurthy, principal with PwC, said consumer are less price-sensitive when it comes to safety related services and features.

According to “PwC’s Connected Car 2016″ report, “features like safety sensors, detailed engine maintenance signals and smartphone integration are already becoming common in new upmarket vehicles. … Today’s safety package, for example, includes features such as automatic braking systems, collision protection and emergency assistance, but as this category matures it will increasingly become part of the autonomous driving package, which will gradually automate the activity of driving the car.”

ADAS features such as automatic braking are not only designed to help consumers drive safer today, but are also designed to help lay the groundwork for autonomous driving both in terms of technology and end-user comfort with the vehicle taking control.

“By 2022, autonomous packages will have the largest incremental impact on new car sales — about $54.9 billion, up 31% annually from 2017,” PwC reported. “And while safety packages will generate $58.2 billion in 2022, an average annual growth rate of 27%, most of this value will be integrated into list prices and eventually integrated into autonomous packages.”

Moving beyond infotainment
Although infotainment packages continue to be one of the major established use cases for the connected car, services are starting to see signs of moving into a broader range of use cases. For example, IBM and General Motors recently announced OnStar Go, which combines GM’s OnStar service with IBM’s Watson application programming interface to create what the companies are calling “the auto industry’s first cognitive mobility platform.” The platform is scheduled to be available in early 2017, and builds on GM’s OnStar At Your Service concierge and location-based service. GM said OnStar Go capabilities will be available in more than 2 million LTE connected cars by the end of 2017, as well as millions of mobile devices that use GM’s vehicle app. Part of that service involves a partnership with MasterCard for vehicle-based mobile payments,

Preparing for more wide-spread car sharing 
There is also a big push toward personalization in the car, and even moving away from a vehicle-centric strategy to one focused on people, according to Kate Migan, head of automotive for Gemalto North America. Automotive manufacturers are aware that between the parking crunch in cities, millennials’ relative lack of interest in car ownership versus older generations and the expected emergence of autonomous vehicles, vehicle ownership is expected to make a shift toward transportation-as-a-service and car sharing.

“This trend toward mobility and people-centric [services] is really a new revolution,” Migan said, and she expects mobile devices to be key to facilitating identity based services in a car-sharing paradigm. Car-sharing providers such as Zipcar allow reservations from an application, but rely on a card and card reader in each vehicle to allow users to unlock vehicles. Gemalto said its platform supports secure access credentials that can be downloaded to and stored on a user’s smartphone for the duration of their car-share – the ability to integrate infotainment service authentication is one thing automotive OEMs are working on, Migan added.

Connecting older cars
While the connected car market is expected by most analysts to be dominated in the future by embedded systems, there are millions of cars already on the road that are not connected. Automotive applications – from navigation to dashboard infotainment alternatives like ICarMode and Dashdroid – and onboard diagnostic-II port plug-ins are being produced by a wide variety of companies, from startups like Vinli to established players like Samsung (with its Connect Auto). T-Mobile US recently released its first product aimed at the consumer vehicle market in its SyncUp Drive serivce, which is a subscription-based, aftermarket device that plugs into a vehicle’s OBD-II port and provides a mobile Wi-Fi hot spot as well as vehicle information such as tracking, driving behavior analysis and vehicle maintenance reminders. It costs around $150 and runs on the carrier’s LTE network.

Rusty Lhamon, senior director for “internet of things” solutions and mobile virtual network operator IoT brands at T-Mobile US, said that rather than taking a platform approach, the company is focused on solving end-customer’s issues and making connected car services accessible to the hundreds of millions of older vehicles on the road.

“Consumers are so connected today, but one of the things that’s really interesting is you look at the 300 million cars on the road today and most of them are not connected,” said Lhamon. “We’ve become so accustomed to connectivity, we want it everywhere. … That type of desire is something we’ve seen across the board with folks.”

Lhamon added that “the market is ripe. We’ve seen it from our own customers, from folks we interact with. The timing really was right for this.”

The launch of SyncUp Drive was a result of partnerships with ZTE and Mojio on the device and platform for the product, and T-Mobile US’ expanded LTE network and coverage, Lhamon said.

Krishnamurthy said while innovation in connected car capabilities is proceeding quickly, adoption isn’t growing nearly as fast. Widespread adoption of features can lag by as much as 11 or 12 years in the vehicle space.

“The ability to technically create something is far outpacing the adoption curve,” Krishnamurthy said. “It takes a lot longer than most companies think it’s going to take, for consumers to adopt what you’re offering.”

Looking for more information on trends in the connected car market and related services? Check out RCR Wireless News’ free special report. 

Image copyright: aimage / 123RF Stock Photo


Kelly Hill
Kelly Hill
Kelly reports on network test and measurement, as well as the use of big data and analytics. She first covered the wireless industry for RCR Wireless News in 2005, focusing on carriers and mobile virtual network operators, then took a few years’ hiatus and returned to RCR Wireless News to write about heterogeneous networks and network infrastructure. Kelly is an Ohio native with a masters degree in journalism from the University of California, Berkeley, where she focused on science writing and multimedia. She has written for the San Francisco Chronicle, The Oregonian and The Canton Repository. Follow her on Twitter: @khillrcr

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