Insight: Internet of Things Drivers

Posted by Mae Kowalke on Friday, April 24, 2015 with No comments

The Internet of Things (IoT) includes many types of "things," from personal fitness trackers (think FitBit) to smart watches (think Apple Watch) to augmented reality tools (think Google Glass). One of those things is definitely the vehicle. Connected cars seem pretty futuristic, but actually they're already here. 

At first glance, it appears telecommunications players are new to the connected car market, and can't ad much value except for connectivity itself. Not true, pointed out Claudia Bacco, managing director for EMEA at RCR Wireless News, in a recent article. Cars have been 'connected' in one way or another for a while (e.g. telematics, machine-to-machine). What's new are applications like autonomous driving.

This shift toward new connected car applications is altering business practices, as the old "set it and forget it" strategy on the part of OEMs (tech is sold built into a vehicle, and after sale there's no further interaction with the customer) is being phased out because it's no longer competitive for OEMs.

Bacco noted in the article that specific challenges faced by telecom players in the connected car market include:
  • Quality and reliability. Carrier-grade products still don't reach automotive-grade product standards (technology that will last for 10-15 years with little or no service, for example).
  • Vehicle life cycles. Long-term functionality for connectivity tech is vital, since consumers typically keep their cars for many years.
  • Automative regulatory requirements. While this factor can get in the way to some extent, it may also be an opportunity; for example, the European E-Call mandate (requiring an embedded SIM chip in every new vehicle) could be a way to piggyback on standard functionality to offer connected vehicle services.
  • Billing. Direct-to-customer monthly billing for ongoing subscriptions is a foreign concept in the automotive industry. Telecom companies can help migrate connected cars closer to being a service.
In another article, Bacco explored the concept of the connected car as-a-service. She explained that there's an important distinction to be made here between the connected car itself and the technology that enables that connectivity. In other words, technology and service are not the same thing.

She noted that consumers generally still don't understand what a connected car is or why they need it. Clearly, work needs to be done in education and marketing, which means operators and vendors themselves need to agree on what they are talking about.

On the service side, Bacco predicted (based on conversations with industry players) that OEM and not mobile operators will drive end-user services. Eventually, segmented services (personal infotainment, car usage) will merge together. The car will become an extension of the consumer's house.

And what about self-driving cars? To the average consumer, a car that drives itself might seem even more futuristic than many other 'connected car' services being imagined or marketing. But guess what? It's probably coming sooner than you'd expect. 

Last month, The Roadrunner--an Audi modified by English auto tech company Delphi--completed a 3,400-mile almost totally driverless trip from San Francisco to New York City. (Engineers took control only when the vehicle had to traverse non-interstate roads; 99% of the trip was autonomous.) 

RCR Wireless reported that the Roadrunner's journey--which included traffic circles, construction zones, tunnels, bridges, a variety of weather conditions, and aggressive drivers--took nine days. Much of the technology used (e.g. collision mitigation, integrated radar and cameras, forward collision and lane departure warning) is already on the automotive market today. 
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