2016 was the year when “smart” homes went mainstream.
We got used to living in a world where any device in your house that is connected to electricity can be placed on your home network and operated by voice commands or remote control.
Your home automation operates lighting, your home entertainment systems, security, and thermostat. Everything from cell phones to washing machines, Lamps to coffee makers. It’s all been “smartified”.
A Connected Car is a car that has access to the internet and a range of sensors. They can also send and receive signals. They can sense the physical environment around the vehicle and also interact with other cars or entities.
What most people aren’t aware of, is that Connected cars have been around for awhile now. So what makes this the perfect time for them to go mainstream?
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The first Connected car is 20 years old!
General Motors created the first Connected Cars in 1996 when they worked with Motorola Automotive to make “OnStar”.
The ‘OnStar’ system allowed voice calls to emergency call centers in case of accidents when an airbag was deployed.
Over time this feature expanded to include GPS locations and had the capability to have data and voice at the same time.
All features combined, by 2015, “OnStar” had already processed 1 billion requests from its customers.
The car is becoming a tech product
We have seen how Uber changed the way we think about ride-hailing and ride-sharing.
People all around the world are re-evaluating the very notion of what a car is used for in our lives.
As Connected car technology transforms, it will have a huge impact on market trends, and we will see the rise of new players in the industry.
Software and telecommunications companies are already aggressively entering the automotive market forcing OEM (original equipment manufacturers) to rethink their innovation strategy.
Currently, vehicles have the computing power of more than 20 personal computers which are focused on the car’s internal functions.
These features monitor the vehicle’s performance like fuel efficiency, speed, air conditioning and the audio system and make life easier for the driver.
Innovations in IoT and car connectivity to the internet is aiming to bring more powerful capabilities and computer-like features than that.
Internet is more important than engine power
13% of buyers won’t consider buying a new vehicle without Internet access. More than a 25% of new car buyers prioritize connectivity over traditional features such as engine power and fuel efficiency.
A Connected car can offer an enhanced in-car experience and optimize its own maintenance using internet connectivity and onboard sensors.
Already our cars are packed with digital technology letting us stream music from the cloud, access real-time traffic info and receive immediate roadside assistance.
Our car can even let us know if we are drifting into the other lane or getting too close to the car in front.
We’re only one step away from those science fiction movies’ self-driving cars. Hello, Blade Runner!
But before our cars drive themselves or start flying around the sky, there are going to be a few intermediary steps required to bridge the gap.
We can look forward to new digital capabilities both inside and outside of our vehicles.
4 Trends the auto industry should be concerned about
The 2016 Connected Car Study found that there are four trends that are changing automotive competition:
1. Radically new technology at extremely low prices – such as 5G, AI, low-cost sensors, urban pods, Robo taxis and 3D printed buses.
2. Non-traditional tech companies are disrupting the traditional vehicle technology value chain. For example:
- For advanced driver assistance systems Mobileye, offers entire “system-on-a-chip” solutions.
- Nvidia has created systems for both dashboard functions and autonomous driving.
- Google is already working on an entire operating system for Connected cars.
3. Urban customers are losing interest in owning cars:
In urban areas cars simply aren’t a requirement especially when public transport and ride-sharing apps are everywhere.
Ride-sharing services will accelerate due to massive reductions in transportation costs of Connected cars.
4. Cities are discouraging the use of private cars
Public policy constraints to alleviate congestion with high tolls could discourage people from driving their own cars.
Cities continue to add more bike lanes and also regulate car emissions so people turn more towards alternative, cheaper modes of travel.
This is why automakers are investing in connected technologies and ride-sharing services. We see how Toyota has invested in Uber, GM in Lyft and VW in Gett.
Connected cars invite the big digital players like Apple and Google to the party.
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Apps for Connected cars and In-Car services
Cars are becoming increasingly more sophisticated. The combination of information systems, communication technologies, and safety devices will change how cars are used, made and sold.
Eventually, it will alter the relationship between the driver and their vehicle as the car will become a more integral part of your holistic “connectivity.”
Smartphones can now be connected to a car – like the electric BMW i3 car that uses an app to check its battery capacity.
Another good example is that Audi is working on a system where the driver can get out of their car and then, with the use of their smartphone, instruct the car to park itself!
By 2020 around a quarter of all cars will be online. BMW has been embedding SIM cards in all of their new cars since April 2016. A Machina Research report found that “by 2020, around 90% of all manufacturers’ new models are likely to have them.”
A recent report by GSMA, the mobile operators’ trade body, says “revenues from the sale of in-vehicle services, hardware and the provision of connectivity itself will treble over five years to reach $39 billion by 2018.”
This means apps for Connected Cars services will be delivered via mobile networks that are either part of the car or can be triggered from smartphones/tablets.
Gartner states that by 2020 there will be over 26 billion connected devices. So what does it mean? Well, when devices communicate with each other you might experience that your car has access to your calendar and is already working out the quickest route to your meeting. If there is a traffic jam your car might send a text to the company to let them know you will be running late.
Mojio and Alexa: Mojio secured $15 million in funding to create elements to launch securely connected car apps with assistance from Deutsche Telekom, Amazon’s Alexa fund and Relay Partners.
Mojio developed one of Alexa’s first skills for connected cars. You can ask her questions like, “Alexa, ask Mojio how much fuel my car has.” This new investment allows them to expand Alexa’s skill set.
A McKinsey report on Connected Cars states that “the dramatic increase in vehicle connectivity will increase the value of the global market for connectivity components and services to $170 billion by 2020 from just $30 billion today.”
The future of the connected car
Connected cars are going to be safer than traditional cars. Their capabilities will feature more entertainment as well as freeing up more time for the driver to do many other activities while on the way to work.
You’ll see more attractive features like a range of automation options, congestion mode and parking mode.
Your car can be personalized with connected services that respond to voice, gesture, motion control and augmented reality.
Your car can even set its internal climate control before the driver even gets into the vehicle.
Everywhere we are starting to catch glimpses of our connected car future and beyond that – autonomous cars like Google’s bubble-shaped prototype.
We are going to see a total transformation of how and why we drive and what traveling by car even means.
What are the connected features you want to see in your car in 2017?