Internet of Cars: from Disruption to Dominance

Key trends in the connected car market

While autonomous cars and V2X are making headlines, in-car connectivity is making waves in the market. Connectivity features are playing a growing role in consumer buying decisions, to the point that some are ready to postpone purchases to make sure they have the latest features. OEMs have to adjust to an emerging shift in buyer priorities that is driving deep-rooted change in vehicle purchasing.

Over the next five years, automotive connectivity will disrupt large parts of the automotive industry. Traditional product-based transactional business models will integrate a growing number of service-based experiences mirroring and developing on consumer product usage and cycles, opening the door to new entrants along the way and requiring established players to adjust their business models.  The effects will ripple through the supply chain.

To understand what this means, several major questions need to be addressed:

  • How will industry players adapt to these changing consumer preferecnes?
  • How will automotive OEMs secure their share of the revenue stream in competition with tech giants like Apple & Google?
  • What does that mean for their suppliers and partners?
  • How will the industry tackle evolving problems of data ownership and security?
  • Is legislation required or likely, will the playing field be tilted?
  • A large number of more detailed questions – like the status of eCall in the EU, or the balance between aftermarket and factory-fitted options – will also require resolution.

“Internet of Cars: from Disruption to Dominance” looks at connected car trends, changes in structural dynamics in the automotive sector and the key challenges for the industry, with a global forecast through to 2020.

Key areas covered in report

  • The consumer is king: Expectations, adoption, brand differentiators, business models
  • Connected industry: The open ecosystem from value chain to value network, the new entrant challenge app ecosystems, the role of telecoms operators.
  • Markets and Challenges: Connected cars intersecting with wearable tech, data ownership, cybersecurity, pricing, future-proofing, the role of the dealer aftermarket, OEM and Tier 1-2-3 capabilities and their development.
  • Legislation and Mandates
  • Strategic analysis of OEMs and automotive connectivity component and system suppliers: Airbiquity, AT&T, Audi, AUPEO, BMW, Bosch, Continental, Daimler, Delphi Automotive, Elektrobit Automotive, Fiat-Chrysler Automobiles (FCA), Ford Motor Company, General Motors, Harman International, Hyundai, INRIX, Jaguar Land Rover, Jasper Wireless, Mojio, NVIDIA, NXP Semiconductors, Parrot Automotive, QNX Software Systems, SiriusXM, Tesla Motors, TomTom, Verizon Telematics, Visteon Corporation, Vodafone, Volkswagen are all covered
  • Conclusion: Analysis and trends – points to watch and strategic recommendations

Key questions addressed

  • What are the OEMs’ future-proofing strategies?
  • What is the difference in connected car markets between North America and Europe?
  • What are the key current security vulnerabilities?
  • What disruptive trends are reshaping the connected car market?
  • What is the value of big data for connected car stakeholders?
  • What in-car services are consumers willing to pay for?
  • How will connectivity complement self-driving cars?
  • Who will dominate the dashboard? Have phones already won, or is there room for proprietary solutions?
  • How will Tier 1 suppliers meet the technology challenge – and what key services will they need to provide?
  • Is legislation a help or hindrance? Is it even required?
  • Where does the aftermarket fit in? What level of functionality can be provided?

Who should buy the report?

  • Automotive OEMs
  • Tier-1/2/3 suppliers
  • Telecom operators
  • Semiconductor manufacturers
  • Independent software/hardware providers
  • Government policy makers and transport agencies
  • Tech start-ups
  • Analysts and consultants

Methodology

  • Our experienced editorial team aims to find and synthesize a broad range of sources into a readable, accessible document that can serve as a foundation for further analysis to meet individual reader’s needs and as a platform for the monitoring of ongoing developments.
  • Regular surveys of extensive database of interested parties and industry executives to keep in touch with the latest thinking from the front-line of practical applications and highlight challenges to established industry thinking as it emerges.
  • A team of researchers monitors major studies and thoughtful analysis of the key issues across the academic and business press and general media.
  • Attendance at major conferences and events to bring insights from industry practitioners ands players and identify critical insights. We partner with the organisers of some key events.

Table of Contents

Acknowledgement  5

The connected car value proposition in 2016 6

Chapter 1: Know your consumer – how the digital dashboard drives decisions 8

1.1 Consumer expectations from connected cars
1.2 In-car digital services that influence purchase decisions
1.3 Connectivity as automakers’ brand differentiators
1.4 Search for a commercially viable business model: Are OEMs really making money?

Chapter 2: Connected Cars Connecting Industries – innovation, disruption and collaboration  23

2.1 Towards ‘open’ ecosystem: From value chain to value network
2.2 Role of telcos in connected cars: Got something beyond connectivity?
2.3 Silicon manufacturers’ share in connected car
2.4 In-car apps: Taking lessons from smartphone ecosystem
2.5 Battle for in-dash supremacy-OEMs vs. Apple-Google

Chapter 3: Connected services in developed vs. developing Economies  47

3.1 Market overview of connected cars per geography – North America, Europe, India, China, Russia, Brazil, ANZ

Chapter 4: Connected cars meet the IoT  58

4.1 Solving the “Built-in vs. Brought-In” conundrum
4.2 The battle for OBD-II supremacy: Hotspot for start-ups
4.3 Connected cars converges with smart watches
4.4 Automotive players dive into “deep” learning: AI, machine learning and more

Chapter 5: Regulatory landscape for Internet of Cars – is legislation the answer?  77

5.1 The Pan-European eCall Mandate
5.2 The Russian ERA GLONASS
5.3 The Brazilian CONTRAN 245 legislation on Stolen Vehicle Recovery

Chapter 6: Connected car market challenges – a bumpy road ahead  89

6.1 Future-proofing connected cars: Redefining software recalls
6.2 Connected car cybersecurity: Making an impenetrable car
6.3 Search for an appropriate pricing model: Think beyond subscriptions
6.4 Making sense of big data: Who owns it?
6.5 The missing link in connected car value chain: Auto Dealerships

Chapter 7: Conclusive core statements  113

Chapter 8: Strategic recommendations 115

Chapter 9: Strategic company analysis 118

Airbiquity 118
AT&T  121
Audi  124
AUPEO 127
BMW 130
Bosch 133
Continental 137
Daimler  141
Delphi Automotive 144
Elektrobit Automotive 147
Fiat-Chrysler Automobiles (FCA)  150
Ford Motor Company 153
General Motors  156
Harman International 159
Hyundai  162
INRIX 165
Jaguar Land Rover 168
Jasper Wireless 171
Mojio 173
NVIDIA  176
NXP Semiconductors 179
Parrot Automotive 182
QNX Software Systems 186
SiriusXM 189
Tesla Motors  192
TomTom (Tom2)  195
Verizon Telematics 199
Visteon Corporation  202
Vodafone 205
Volkswagen  208

Appendix 211

  1. Table of recent announcements and trials . 211
  2. Table of recent mergers and acquisitions 213
  3. List of contributors . 215

Table of Figures

Figure 1: Twitter response from a consumer
Figure 2: Consumer’s willingness to switch OEMs (McKinsey & Company)
Figure 3: GM OnStar: From product to platform (GM)
Figure 4: Connected Car services before, during and after the journey (Daimler)
Figure 5: Competing the connected consumer (McKinsey & Company)
Figure 6: Connected Car market by 2022 (Machina Research)
Figure 7: Evolving business models in telematics (Ericsson)
Figure 8: Connected Car Open vs. Closed Ecosystem (Roland Berger)
Figure 9: Connected Car Stakholders (BC-FIPA Canada)
Figure 10: MNO’s Connected Car revenue model (Park Associates)
Figure 11: Connected Car Team at AT&T’s Drive Studio (AT&T)
Figure 12: Global forecast Embedded SIM (GSMA)
Figure 13: Automotive vs. Telecom Industry (Machina Research)
Figure 14: Semiconductor content in modern vehicles (PwC)
Figure 15: Broad R-Reach Automotive Grade Ethernet (Broadcom)
Figure 16: Ford’s Developer Program
Figure 17: Apple CarPlay User Interface
Figure 18: Android Auto User Interface
Figure 19: MirrorLink User Interface
Figure 20: Forecast on automotive screen projection (IHS Automotive)
Figure 21: InkaNet User Interface (SAIC Motors)
Figure 22: Importance of Connected Car Services India vs. Mature Markets (Capgemini)
Figure 23: Mahindra & Mahindra joining Open Automotive Alliance
Figure 24: Built-In vs Brought-In telematics systems (GM)
Figure 25: OBD-II dongle (Automatic Labs)
Figure 26: Apple iWatch
Figure 27: Tesla iWatch App (Eleks Labs)
Figure 28: MINI Augmented Vision (BMW)
Figure 29: Auto companies need to develop software capabilities (BCG Analysis)
Figure 30: eCall Diagram (HeERO)
Figure 31: ERA GLONASS Diagram (GLONASS Union)
Figure 32: Brazilian CONTRAN 245 mandate implementation (DENATRAN)
Figure 33: Twitter response by consumer
Figure 34: Connected Car security vulnerabilities (SBD)
Figure 35: Connected Car services payment models (SEAT)
Figure 36: In-car Transactions (SAP)
Figure 37: Connected Car Data Infographic (FIA)
Figure 38: Connected Car Data Points (INRIX)
Figure 39: BMW “Genius Bars”
Figure 40: Remote hacking of Chrysler Jeep Cherokee
Figure 41: BlueLink Smartwatch App (Hyundai)
Figure 42: Tesla Model S “Ko-HAF” prototype vehicle (Bosch)
Figure 43: OTA Keys for Car Sharing (Continental Automotive)
Figure 44: Delphi’s automated driving prototype Audi SQ5
Figure 45: Tesla Model S Infotainment Systems
Figure 46: NXP-NTU Smart Mobility Test Bed (NXP Semiconductors)
Figure 47: Verizon Vehicle
Figure 48: RNB6 infotainment system (Parrot Automotive)
Figure 49: Choreo Connected Car Platform (Airbiquity)
Figure 50: Audi Virtual Cockpit (NVIDIA)
Figure 51: Mojio OBD-II dongle

Table of Tables

Table 1: Connected Car Services  . 15
Table 2: “Monetizing Points” for Automotive OEMs 21
Table 3: Connected Car Stakeholders  25
Table 4: Automotive App Development Strategies . 37
Table 5: Apple CarPlay vs. Android Auto  44
Table 6: OEMs and their connectivity type  61
Table 7: MirrorLink powered car models  62
Table 8: eCall deployment status  78
Table 9: ERA GLONASS implementation stages . 84
Table 10: Software Recalls performed by OEMs recently 91
Table 11: Connected Car security vulnerabilities 94

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Publisher: Autelligence
Published: May 2016
Pages: 206
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