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Cars are getting “smarter.” Experts estimate close to 200 sensors will be embedded into each car by 2020, which is the equivalent of approximately 22 billion sensors used in the automotive industry. These sensors are used to monitor everything from engine operation, brakes, fuel temperature, seat belt safety, camshaft angle, and much, much more. Additionally, smart cars are beginning to feature in-vehicle digital services such as General Motors’ OnStar wireless communications service. And herein lies the issue – why should consumer pay both the car manufacture and their technology service provider for similar digital services? Most likely they won’t. So the question is, who will be driving the innovations for future smart cars and how will we get there?

One school of thought is that smart car innovation will be initiated by vehicle manufacturers, who are already incorporating a variety of technology solutions into their vehicles. They have the ultimate access to the vehicle and are already using digital data for car operations such as systems that control handling or sensors that interact with the environment through vehicle-to-vehicle communications. Additionally, these multi-billion dollar manufacturers have the R&D budgets necessary to support the development of breakthrough products and services. And yet, they are coming into the digital services business behind other technology providers such as Apple and Google. As a result, they do not have as much experience developing application for consumers. Despite this, OEMs have made significant progress including installing touch screens that enable drivers to input characters just by using a finger to “write” on the designated touchpad or augmented reality displays that allow drivers to see information like speed, navigation details and even the name of an incoming call with minimalistic designs on our windshields. The Digital Fun Vii Concept Car is an inspiring example. This future car allows owners to change the exterior car color and constantly stay connected with ever friends or other automobiles.

The other thought on the issue of who will develop and own smart car technology, is that technology developers will replace in-vehicle, consumer-facing technologies with applications from a hand-held device. This may be the prevailing strategy considering that consumers are already comfortable using applications on their phones, creating digital IDs 24 hours a day, while cars are used on average less than two hours a day. Also, smart phone manufactures are yeas ahead of vehicle manufactures in terms of developing connectivity applications. One example already in production is an application called Hudway, which lets drivers place their iPhones on the dashboards cars and navigation information (from the iPhone) will be reflected and displayed on the windshield. If technology developers take the lead, some suggest that OEMs become the builder of “shells” that allow other ecosystems to live within the vehicle.

The reality of how vehicle innovation will be developed, however, may be somewhere in the middle. OEMs seem to view Google, Apple, etc. as competition. But another perspective may be that the technology providers deliver consumers value, while vehicles manufactures focus on safe mobility.  Rather than force their way into the business of creating content and services, OEMs create value by focusing on innovate vehicle designs that are conduits for content. When this happen, the game is reversed. OEMs provide content developers and other partners with an opportunity to safely reach a captive audience through the vehicle. In this way, OEMS have a way to control and influence the content being delivered, allowing them to maintain a valuable role within the digital ecosystem.

Some manufacturers already are exploring this approach. For example, Honda is integrating Apple’s Siri Eyes Free into their upcoming car models. This application allows users to use the operating system from the car dashboard, letting drivers easily and safely make phone calls, access music, send and receive messages, and get directions using built-in Apple apps. “Honda recognizes the power of Siri Eyes Free to meet connectivity and convenience needs of its customers in a responsible manner,” said Honda’s vice president of product planning and logistics Art St. Cyr “With technology becoming further integrated into people’s lives, we are happy to provide next-generation connectivity and meet our customer’s ever-changing needs (AppleInsider.com).” Some car manufacturers like Audi are moving toward a “conduit” approach by implementing Long Term Evolution (LTE) in their future car models. LTE provides better quality internet radio, allows drivers to search for a location using pictures, and makes it faster to load live maps. Having a dedicated LTE connection in a car also turns it into a Wi-Fi hotspot for people on laptops who are constantly on the go.

Focusing on a safe driving experience put manufactures back in the driver’s seat, allowing them to control the delivery of the content, rather than create it. Once current security obstacles are overcome, the future holds nearly unlimited connectivity opportunities. OEMS will be able to monetize the technology investments being installed in vehicles, while hand-held device manufacturers can put their experience at creating consumer applications to work.  Working together they can increase revenue for service providers and manufactures, improve safety and raise consumer satisfaction levels. It’s a win-win-win for everyone.

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  1. William Newman

    Great future cast to the OEM direction of cars vs transport vs mobility.  How we monetize the connected platforms in Auto 4.0 will be telling.

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