The smartphone and tablet revolutionized computing, offering highly portable, connected devices that were easy to use and appealing to a wide variety of users. Consumers embraced these devices, and businesses have joined the fray, discovering that most users’ needs can be satisfied by a low-cost tablet, and also innovating with internal apps. Pundits have pointed to the automobile as the “next frontier” of mobility. This seems a sensible suggestion. Modern automobiles are laden with sensors, increasingly feature broadband connectivity, and represent a captive audience of consumers. For enterprises, a connected vehicle could provide safety information, mobile sales staff support, and innovative logistics applications, if only the promises of the connected vehicle were actually delivered.
The battle for the dashboard
The biggest question facing automobile manufacturers when it comes to connected vehicles is whether they want to cede control of the dashboard to Apple or Google. On one hand, “owning” the dashboard presents a compelling opportunity for auto manufacturers. With a unique user interface and compelling service offering, consumers are more likely to stay within the brand. Just as buying into Google’s ecosystem makes an Android user less likely to switch to an iPhone, presumably buying into a General Motors connected vehicle ecosystem makes a consumer less willing to shop Ford or Toyota when she’s ready to replace her Chevrolet.
However, this approach presents the same difficulties faced by “second tier” smartphone and tablet manufacturers that compete for limited developer attention outside of Android and iOS. A Ford or Mercedes automotive OS is unlikely to capture the attention of app developers due to a paucity of apps and consumers, the classic mobile “chicken and egg” problem. Developing the supporting infrastructure required for a mobile ecosystem, ranging from compelling hardware, to supporting backend infrastructure, to developer relations, also represents a massive and costly challenge for companies that are effectively new entrants to the mobile market.
Ceding control of the dashboard to Apple via something like CarPlay absolves the automaker of many of these challenges, but it also relieves the automaker of “ownership” of the customer, the corresponding revenue from ancillary services, and the potential for keeping that customer “in the brand.” CarPlay might be a shortcut to a compelling in-dash experience and a broad portfolio of apps, but when the consumer goes shopping for their next automobile, CarPlay is no longer a differentiator to a single brand.
The missing business model
Another major hindrance to connected vehicles gaining traction is that no manufacturer or vendor has discovered a successful business model. Should connected vehicle services be sold as a public safety measure, and pitched to government agencies? Should consumers be charged for ancillary services like travel information? Should consumers’ information be sold to service providers? Are fleets and corporate customers a major revenue stream? Apple and Google have relatively straightforward revenue streams from their mobile platforms, but automakers are still experimenting with how to actually make money from connected vehicles.
The upgrade problem
With smartphones, users generally upgrade on a regular basis, usually tied to contract renewals every two years. A four-year-old device is generally considered rather old, and often at the tail end of manufacturer support for upgrades. With automobiles, a four-year upgrade cycle is on the short end of the spectrum, with most consumers keeping their car for as many as a dozen years. While those who keep their car for decades may be less interested in gadgets and connected vehicles, a fairly short upgrade cycle in automotive terms of three years is nearly a lifetime in technology. Currently, few automotive systems even offer consumers the ability to upgrade the software installed in their cars without a trip to the dealer, but in a world of apps and rapidly increasing capabilities, dealer trips simply aren’t reasonable.
The next, next generation
Despite claims to the contrary, I don’t believe we’ve actually seen a mass market, connected production vehicle with a fully vetted business model. Most of what’s currently available represents more of an experiment or beta product that is a fully functioning mobile ecosystem akin to Google, or even Microsoft or BlackBerry. Broadband connectivity is only becoming broadly available on 2014 and 2015 model year cars, so while the connected vehicle space is evolving, constraints around hardware, business models, and consumer tastes continue to hold back the car as the next mobile platform.