All In: Cashing In on Connected Cars
Although new connected car models are rolling off the assembly line, the key question is whether consumers will be willing to pay for the services the connected car enables.
J.D. Power conducted a survey of consumer interest in 61 different emerging automotive technologies and found that a wireless link between electronic devices and the factory-installed car equipment are the most attractive. In fact, 60 percent of consumers surveyed feel that a wireless connectivity system should be standard equipment. Less attractive to customers was a device/application link, which only 23 percent of consumers said they wanted. Similarly, only a quarter of owners are interested in paying the $3,000 price tag for an autonomous driving more in their next vehicle, which is up from 21 percent in 2013.
"Smartphone ownership has increased to 70 percent in 2014, and consumers want the same connectivity in their vehicle as they are used to getting from their smartphone, computer or tablet," said Mike VanNieuwkuyk, executive director of global automotive at J.D. Power. "Device/Application link enables the vehicle to replicate the display of a device on the vehicle's screen while managing the device through the vehicle's controls, which is why consumers want—and are willing to pay—to have that technology."
According to the J.D. Powers research, consumers are interesed in convenience features like wireless charging stations and Near field communication (NFC) control of various vehicle functions such as unlocking car, remote start and opening trunk or tailgate. Also interesting to customers are functions that leverage their smart phone like a voice-activated personal assistant system.
While customers might not be quite ready for the self-driving, location-aware connected cars of the future, putting the technology in the hands of customers and on the roads is an important first step—for the automotive and telecommunications industries alike. Many of the connected car technologies of the future have yet to emerge. And auto manufacturers are just getting their arms wrapped around what robust communications and information technology can do for their internal business as well. BMW recruited IBM Big Data and Analytics to apply their predictive solution to identify problems with their cars in the development stage, to identify potential issues and faults much more quickly than has been possible in the past.
Nokia also recognizes that connecting the car is only a first step and announced in May 2014 a $100 million fund to invest in connected car technology.
"For the last few years there has been a surge in innovation that has brought technological advances leading to safer, cleaner, increasingly connected, intelligent and more affordable vehicles. Vehicles are becoming a new platform for technology adoption very similar to phones or tablets," said Paul Asel, Partner at Nokia Growth Partners. "We are excited to deepen our collaboration with HERE through the Connected Car fund to invest in companies that are driving the future of the auto ecosystem, local services and personal mobility."
The connected car is here. Now is the time to take it out for a spin and see what it can really do, from a technology standpoint. Now that the major technological hurdles to fully realizing the connected car have been safely cleared, it's up to consumers and innovators to push the technologies to the next level. We might not be quite ready for Knight Rider, but it's certainly off to a strong start.
