What connected cars will be doing by 2020

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Many of us dream of autonomous cars. Just imagine the relaxation of  completely hands-free driving that is both seamless and safe, unlocking new time  for us to work, talk, and learn while going from point A to point B.  A recent report from Telefónica Digital found the percentage  of cars with built-in connectivity will jump from 10 percent today to 90 percent  by 2020.

Will the connected cars of 2020 offer night vision, automatic alcohol  detection via breath monitors, virtual driving simulations, and advanced lessons  (remotely administered) to practice our reaction times when safely parked in the  garage? The Internet of things has come to the car industry in a big way,  unlocking the possibility of all manners of innovation and evolution.

As I’ve spoken to many people around the world gauging the reaction to the Connected Car Industry 2013 report, I have been struck by  the depth and interest in the massive transformation in the car industry, the  largest and most disruptive change in the industry in over 100 years.

Everyone from major OEMs in Germany to other value chain players in the UK  and the U.S. had a view on the findings from the report, and a few key themes  are dominating the discussion:

Embedded, brought-in, or hybrid?

Should automakers build in connectivity, or should they deploy a hybrid model that allows  consumers to bring in their desired connected devices so they can personalize  their connected experience?

With user experience at the core of connected car innovative efforts, there  are several arguments about the ideal nature of the telematics involved  (integrated telecommunications and informatics, e.g., GPS capability).

There is a lot of excitement about hybrid and smartphone-based telematics  solutions, but certain vehicles require embedded connectivity in order to  remotely track battery charging status and other operating parameters, leading  Ford to abandon the brought-in approach with the Ford Focus Electric.

The differences in opinion could make cars the stage for the next  platform war as differing policies will lead to consumer choices being  influenced by a preference in style of telematics integration.

4G or not to 4G?

As cars are a long-term purchase and the customer-product relationship spans  years, connected car manufacturers are trying to anticipate not only what  consumers want now but what they will want. With 4G, your car can become  a Wi-Fi hot spot — but would it be too much, too soon?

The hardware and chip to enable a car with 4G is expensive and results in  higher data consumption (and, consequently, usage bills for the consumer).  Despite constant increases, 4G coverage also remains unavailable in many areas  of the world.

However, 4G is seen by many as the next standard in mobile coverage, and with  the comparatively slow development and manufacturing cycle (often needing to  plan one or two years ahead of the market) in the auto industry, many are  wondering if the technology should be adopted in advance.

Billing and payment relationships

The emergence of connected cars, while exciting, poses concerns on the best  model for payments, including who should pay and how.

Connected cars  offer a new suite of services, so the conversation quickly switches to who will pay  for them. Some are relatively simple, like embedded calling and SMS, the bills  for which can run directly through the telecommunications provider. But if the  car is “connected” for anything from being a roving Wi-Fi hotspot through to  diagnostics and real-time reporting, who will pay for the data? Do consumers  have the appetite for yet another billing relationship? Is there an appropriate  subscription model? Should it be charged as an optional extra or bundled in the  sale price. Or indeed could it be ad-supported, which brings in the questions of  safety and privacy?

GM’s OnStar (which includes emergency services, collision detection, roadside  assistance, etc.) uses a subscription model, but what will be the billing  mechanism for other services such as Spotify? The question of what developers  will prefer is in the forefront of many minds in the industry.

What about the second-hand market in the case of connected cars? Will severing  account and data ties with your car be a new headache for consumers and for the  companies who want to ensure they have accurate user data?


The connected car environment is the latest computational frontier and is  also a new consumer environment, providing potentially meaningful business  models and revenue streams. The report made clear that automotive manufacturers  are committed and excited by the opportunity.

Connected cars are here and will be in our future. They are a powerful tool  for safety and enhance the driving experience. There are many issues being  discussed today, but I’m glad to see the industry is as enthusiastic about the  challenges as it is about the opportunities that lie ahead.

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