Data is no small feat: the value of data coming from your car’s transactions is estimated at $1400 a year. The in-vehicle connected world has been attracting significant innovation and large amounts of investment, presenting a $200 billion market opportunities in North America and $500 billion globally.
According to IHS Automotive, a global market information and analytics company, growth in car commerce is estimated to yield more than $14.5 billion in revenue from automotive data assets by 2020. IHS Automotive forecasts there will be 152 million actively connected cars on global roads by 2020, where value from the connected car will be derived from a variety of Big Data assets such as diagnostics information, location, user experience (UX) and feature utilization, and adaptive driver assistance or autonomy/self-driving systems.
As vehicles increasingly transform into digital platforms, while Internet connectivity is more accessible and affordable, the automotive industry is facing opportunities to generate in-car commerce models, presenting possibilities for new revenue streams. The connected car also allows a better understanding of driver behavior and of vehicle ownership experiences.
One of the main challenges is to figure out what services do drivers/travelers actually want in their vehicles and which business models will be economically viable. At the Autotech Council recent event Tobin Trevarthen, founder of Spatial Shift, talked about future disruptions in the Connected Car world and the commerce opportunities in this field. For example, the connected car is migrating from AM/FM/XM/Sync/apps today to digital streams, with utilizing proximity delivery and a full digital experience within 4-5 years.
What are the business models for in-vehicles revenue streams?
Today, we already have applications that:
- Sell behavioral data (for example, in the insurance industry)
- Subscription to premium radio services (like OnStar, Sync, My Link, U Connect, and more)
- Placement fees (paid to OEMs)
- Royalty apps (paid to OEMs; for example Sirius XM)
Emerging models in the future will include:
- Localized advertising and local commerce (location-based promotions, special deals, personal and timed offerings, etc. – which are all based on drivers’ personal preferences and consuming behavior)
- Capturing, collecting and selling enhanced data to new sources. This includes data related to drivers’ behavior (for example on the road, location stops, frequency, more), lifestyle, etc.
- Reshaping and reimagining the whole driving experience – presenting a new world of creativity and opportunities for disruption.
- The sector of infotainment is in growth. Travelers demand more options with uninterrupted access to the flow of information, news, entertainment, and social media in their cars.
Infotainment technologies would include:
- Big Data & analytics (historical and real time transactions; predictive analytics has a huge proposition). Collecting information and running analysis of driver behavior, the vehicle operation and maintenance.
- Embedded apps – coupled with sensors safety-related apps, 3rd party apps in entertainment, traffic routes, congestion and parking, etc.
- Audio – radio, satellite, digital, TTS. These are main distractors to drivers. Couple such offerings with safe-driving alerts present a new line of apps.
- Voice activation – in car and connecting to outside businesses or entities.
Today, advertising has already matured and push-content is a reality. In-car advertising would be based on location, context, and personally-tailored shopping preferences: if you need to pick up a pizza for dinner, an app can route you there, find an available parking spot and alert the pizza parlor that you are approaching. All can be done through voice activation. Such propositions save time, offer convenience, minimize distractions (no need to reach for your smartphone while driving), and help drivers to be safer.
Tracking our patterns of behavior and preferences is a game-changer and goes beyond personal privacy. Whether we like it or not, as drivers, personal-identity type of intelligent apps are coming and your identity would be known: your car will ‘know’ your routes, your stops, where you work, the coming and leaving of places, where do you stop for groceries or coffee, your children’s after-school activities or pick up routines from daycare, etc. Of course, some drivers will choose the option to turn-off such tracking, but the new ‘norm’ would enable such disruptive technologies.
Let’s admit: the proposition of in-car commerce offers a better quality of life and can make us more productive and less stressful, giving us the time to focus on our important activities. For example: apps can remind us to stop at the store to pick up milk. Or alert us of an accident (in real time) on the usual route we take from work to home, while offering alternative roads. Or, an app can remind you to pick up a child from the sports practice at a certain time, etc. Each driver will have to weigh convenience versus what may be perceived as intrusion-to-privacy.
With the progression of the Smart City concept and the view of smart transportation in our urban areas, another example is application to alleviate the ‘pain’ of parking (well, think about the parking challenges in San Francisco, at Giants events, cultural performances and festivals… The list is long). With sensors, cloud computing and a connectivity software platforms, drivers can find available parking spot in near-by garages and the real-time cost of the parking space.
1. Pictured: ‘Stella’, the world’s first solar-powered family car, has room for four people, a trunk, intuitive steering and a range of 600 kilometers. In the World Solar Challenge in Australia in October 2013, Stella raced and won the Michelin Cruiser Class. Stella was developed by the The Solar Team Eindhoven (STE) of Eindhoven University of Technology (TU/e) in the Netherlands. The “Stella goes USA” partners announced the U.S. arrival of the vehicle in the U.S. and it will travel to Los Angeles for National Drive Electric Week (NDEW), with stops in Sacramento and San Francisco.(Click on YouTube video: https://www.youtube.com/watch?v=1vTKnwsYPxA or check more information at www.solarteameindhoven.nl
2. Autotech Council website: http://www.autotechcouncil.com
The Autotech Council, a member based organization, aims to help innovation in the auto industry get to market faster and benefits the entire automotive value chain.