CES 2014 is taking place next month in Las Vegas and Thilo Koslowski, vice president and distinguished analyst at Gartner, said the innovations in the connected vehicle will be making news at the event. Mr. Koslowski provided his thoughts on what disruptions and business opportunities the connected car will offer.
Q: Connected vehicle technology turns automobiles into the ultimate mobile device, and its users into connected drivers and passengers. How is this market growing?
A: Gartner predicts that, by 2016, the majority of average car buyers for a standard brand vehicle in mature markets will expect at least basic Web-based information availability in their new automobiles. This tipping point will be achieved in 2014 for premium brand vehicles. By year-end 2020, Gartner predicts that more than 80 percent of all new vehicles sold in mature automobile markets, such as the United States, will offer connected-vehicle functionality.
Q: The connected vehicle and new mobility solutions are motivating automotive and nonautomotive companies to explore new opportunities in this new era. What can be expected at CES?
A: Many companies will continue to showcase the latest infotainment offerings, as well as new user interface innovations that take advantage of an automobile’s numerous sensors and other design advantages compared to mobile consumer electronic devices. Advancements in self-driving automobiles will also be discussed again as well as higher data speeds.
I envision that the automobile will eventually become more innovative and cooler than smartphones and excite drivers and passengers in immersive experiences that will put an end to the question “are we there yet?” It’s not just the automakers that will make new connected vehicle-centric announcements. Expect small and large technology companies to step up their efforts and interests in one of the fastest growing connected device platforms.
Q: What type of connected vehicle features do consumers want?
A: Today’s consumers want very specific features that enhance the driving and ownership experience. It’s not about Internet browsing in the car and instead about Internet snacking. That means getting the right amount of information contextualized at the right time. Until the arrival of the self-driving automobile, consumers want practical information and apps that entertain them and find the next available parking spot without wasting time and gas. They like to know the location of their friends and family, but don’t want to do social networking on Facebook or Twitter. Consumers also like the automakers to provide them with the latest software and application upgrades delivered wirelessly over-the-air and offered in a personalized fashion.
Q:The shift from a predominant focus on mechanical engineering excellence toward connected vehicle-centric innovations will highlight the critical importance of IT and its role in creating new consumer and business benefits. What will IT investments focus on?
A: IT investments in the era of the connected vehicle will touch on all aspects of content creation, sharing and consumption. That means that technology will enable the automotive industry to bring the convergence of consumer’s digital lifestyles into the automobile and turn cars into smart mobile nodes that can also talk to each other and with the infrastructure.
IT is becoming a core element of automotive product innovations and will eventually be as important as sheet metal and design. For the automotive industry that means that product and brand values will have to be redefined using IT and the connected vehicle as a fresh canvas to work with.
Of course, the automotive industry will also need to keep a balance of value vs. turning off consumers. For example, data capture and analysis in the connected vehicle context has to focus on providing real value and not overstep the “creepiness line.” That means that big data (as well as small data) needs to focus on generating insights that matter to consumers and not create the fear of tracking driving behavior. Being able to help consumers find a type of restaurant based on their cuisine preference provides real value without being invasive. Bombarding consumers with marketing messages because they are driving by a coffee place, on the other side, misses the point.
Q: What are the some of the key business benefits and opportunities for the automotive industry resulting from the connected automobile?
A: The era of the connected vehicle will help the automotive industry to redefine value propositions for its customers by going beyond realizing all profits at the point of sale when a customer purchases a vehicle. The ability to be connected and talk to a consumer while driving represents a unique and truly captive audience that other industries would love to have. This will allow the automotive industry to move into an intermodal-transportation-solution-provider business model that offers all kinds of transportation solutions plus adjacent Infotainment value propositions over time.
Key to these types of new business models are, of course, partnerships with other companies that will define the new connected vehicle and smart mobility ecosystem. I can imagine that at some point the sale of an automobile will become so irrelevant in the bigger picture that cars might be offered for free in return for a ‘lifetime’ wireless data contract. That might shock some consumers, but delight many others.
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