Think about this - by 2020, a staggering 90% of our cars will carry built-in connectivity (see video here). The figure currently stands at less than 10%. If you thought your vehicle was 'high tech' now, brace yourself.
In the near future, expect to see your car seamlessly sync with your smartphone and "talk" to other vehicles to coordinate breaking and acceleration. It will automatically slow down to avoid a collision, detect speed zones and navigate you to that elusive parking spot. Your vehicle will morph into a lean, mean virtual environment... and get really intelligent.
We're seeing the auto sector on the verge of one of its biggest revolutions in over a century - it's the rise of the truly 'Connected Car'.
Now as a lover of both futuristic tech and my sporty black Beamer, I'm finding this marriage of the two worlds pretty darn exciting. Burgeoning demand from consumers together with advancing technologies is pushing auto companies to transform. They'll need to step up or be left behind in a trail of blazing dust. Literally.
I wanted to dig deeper and hear first hand from the auto guys. So a few months ago, I flew to the Connected Cars summit in Amsterdam to hear some of the big debates that are raging - and managed to pin down two uber experts from Ford and Kia plus top analyst Matt Hatton for their take. The video ended up getting a lot of interest, especially from consumers. I wonder if the futuristic BMW i8 Spyder concept car that we used as our filming backdrop had anything to do with it...
As Digital Natives, connectivity is a given for us these days
We expect to be 'hooked up' 24/7 whether we're heads-down at work, lounging in our gardens or in transit (indeed even while in-flight, soaring across the Mediterranean).
But despite the car being the place many of us spend an inordinate amount of time, it has been one of the last places to be transformed by the power of connectivity. I feel certain this is all about to change - and fast.
Noticed that the majority of connectivity in our vehicles today is through aftermarket devices for services? It's your regular gamut of navigation systems, usage-based insurance, stolen vehicle recover and infotainment. We'll see a dramatic shift over the next ten years however, with the integration of all the services we love accessing through our daily lives into the driving experience.
We need car-to-cloud connectivity that will allow us to near-replicate what we're doing with our tablets from the car (albeit with total road safety) and turn the vehicle into another control centre for our daily fix of in and out bound content.
Already cars are parking for you (I've experienced this first-hand to great glee with a pal's Range Rover Evoque) and tracking arrival times for journeys, sending text updates to the person you're meeting with your ETA versus your having to pull over to text or phone to let them know. The former makes your life easier and the latter safer.
We're also seeing keys being swapped for sensors, eliminating that classic frantic-fumbling-for-keys moment by detecting when you're by the door and then unlocking automatically. And of course prototypes of driverless cars have been taking the public's fancy for a while now. Indeed, futurist Ian Pearson predicts that fully self-driving cars will increase road capacity as much as five-fold!
Then there are trials of connectivity solutions that track your driving and reward you for being a considerate driver by lowering your insurance premium. Wouldn't you appreciate having your careful, safe driving acknowledged by saving some precious pounds? It's great motivation for the reckless ones (you know who you are) too.
Speaking of driver safety, there are also eCall (Emergency) and b-Call (Breakdown) services that provide a car's location and automate contact with support services. Did you know that every new vehicle architecture sold in the EU will be mandated to have this emergency system installed by 2015? A great move.
Not all of this is going to be easy to roll out though. Here are four realistic challenges to consider...
- Nissan estimates the costs for embedded hardware connectivity, needed for services such as eCall, to be $100 a unit (see this report here). This means auto makers will need to provide additional services to justify the added cost to the customer.
- The difference in lifecycles in the automotive and the mobile industry is a serious challenge for the connected car industry. Operating system upgrades and new applications are provided almost constantly for the smartphone, whereas auto manufacturers work on five-year cycles.
- Consumers are also used to a one-off payment when purchasing a car but with an embedded connection there may be an additional recurring bill to be paid.
- We'll need to see significant changes in the business model needed to deliver the connected car service that consumers will demand. Service bundles, delivery channels, product pipelines, pricing models and customer support will all be impacted as the dynamic between manufacturer, dealer and customer evolves.
These are all manageable issues though. What will be crucial for the Connected Car industry is real collaboration between the mobile and automotive industries. As this Connected Car Industry 2013 report makes clear, this is already off to a flying start.
Finally... the estimated business value here? The global connected car market is set to be worth €39 billion in 2018 - three times its 2012 figure!
Keep a close eye on this space. It's about to take off.
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