The Connected Car IVI Opportunity: Lessons from Mobile - AppCarousel
We have been in the mobile device industry for over a decade, creating and operating app store platforms for large telecommunications companies. During that time, we have seen the incredible evolution of the wireless industry. Now, as a member of GENIVI and a supplier to companies in the automotive sector, we " />
The Connected Car IVI Opportunity: Lessons from Mobile - AppCarousel
We have been in the mobile device industry for over a decade, creating and operating app store platforms for large telecommunications companies. During that time, we have seen the incredible evolution of the wireless industry. Now, as a member of GENIVI and a supplier to companies in the automotive sector, we are witnessing major change in the IVI market. For some of the changes we can draw parallels with mobile, while others are unique to vehicles. This short paper gives some perspectives on the challenges and opportunities for apps, content, data and value-added services for the connected car.
Key Observations about the Connected Car
The in-car app and content world will be very different to mobile
Apple’s and Google’s stores both have more than a million apps each. Drivers will not tolerate having to browse through hundreds of news apps just to find the one that works best in their vehicle. Instead they will want top quality, highly relevant, curated experiences that add value to their driving experience, and if the car industry gets it right, those drivers won’t realize they are using apps at all. We don’t see the need for mobile-type app stores in the car. Instead we see those apps, services and infotainment feeds, being delivered in a seamless manner, as part of a managed service and as an extension of the car manufacturer’s brand.
Connected car will see as many battles as mobile
One obvious battle will be for the operating system. Will dashboards be fully open, dominated by Apple or Google, or proprietary like in the old featurephone days? It’s a land grab, and each automotive OEM also wants to differentiate, so we may not see clear leaders for several years. Will the in-car screen dominate or the driver’s mobile phone? As drivers won’t care so much about a vast choice of apps and services, the battle may shift from platforms to the finesse and execution of the in-car experience.
From the developer’s perspective they don’t want to see battles; they want to see standardization so they can build once and deploy everywhere. Fragmentation is never a good thing for developers, and it’s platform fragmentation that drives so many of the battles of exclusivity, lack of availability across devices, and ultimately added costs. Our experience in mobile tells us that this is short-sighted and that tools like HTML5 will help the IVI industry break away from proprietary systems over time.
The car today is like yesterday’s featurephone
Consumers today can make their smartphones exactly what they want them to be, as there’s an app for almost every use case imaginable. Whereas, to a large extent, once you buy a car, you interact with the same firmware for the life of the car. Cars are however becoming more software-based. Today updates may be performed at the dealer’s workshop, tomorrow it will be SOTA (Software Over The Air). As users demand more features and customizations over time, and as car manufacturers drive to keep their vehicles relevant and up-to-date, cars will move from being like featurephones to being like smartphones. An entire software management industry for automotive will appear.
How is the car connected, and what are the implications?
There are several ways for cars to connect. Many manufacturers are looking to deploy black-box cellular modules in every car, making deals with the network operators across all of their markets. Bluetooth is now ubiquitous so the car can easily piggyback onto the driver’s personal mobile phone. Of course, Wi-Fi is easy and cheap to add to any new vehicle, so there is no shortage of connectivity options.
In the world of smartphones, there is a general expectation that the user needs to be online and connected in order for most apps and services to work. However in automotive, almost every feature on a dashboard will be expected to work irrespective of whether the car is connected, just as today’s GPS satnav devices all work without an internet connection. Apps that are deployed in the car therefore need to be designed to work offline as well as online, and the scheduling of SOTA updates will need to consider the car’s connectivity options.
The connected car is as much about IoT / M2M as it is about IVI
There are two drivers for connecting the car. One is in-vehicle infotainment IVI), the other is telemetry otherwise known as telematics. Some call it machine to machine (M2M), others call it the Internet of Things (IoT). Whatever you call it, we think of the car as a connected device which collects enormous amounts of data, from internal data such as engine statistics, to its external environment such as outside temperature, and driver behavior characteristics.
Consumers will benefit by having all their assets connected (for example, the car will turn on the house lights and open the garage when it is approaching). Car manufacturers will dive deep into “big data”. Service providers such as traffic and weather companies will use the car as a moving sensor. The two use cases; IVI and IoT, will interact such that a weather app on the dashboard will know there is ice ahead thanks to the cars in front. Ultimately the connected car will give rise to smart cities where cars drive themselves while the passengers enjoy in-vehicle infotainment.
The connected car has a different value chain to mobile
A phone is typically owned for 18 months, whereas a car is on the road for more than 10 years. So, choosing vendors for the long run is critical. Having an IVI solution that can adapt during those 10+ years is essential, which can be achieved by having flexible APIs that connect the vehicle to the cloud. In this way, the head unit interface in the vehicle can be defined, and the apps and content feeds that interface to it can be enhanced, upgraded, and efficiently managed as time passes.
Having different vendors for the in-car software, in-car hardware, cloud services, content and apps means tight collaboration and tight integrations – based on those APIs that connect them all together. The car will be as easily differentiated via its apps and services as it is today from its accessories and trim.
The key to a successful IVI platform will be a rich set of APIs that third party cloud providers can use, in a tightly controlled manner, to connect to the car, provide IVI services, and access car data to personalize their offerings.
Monetization will be different to mobile; there will not so many 99c apps, but rather far more valuable services based around apps that users will be prepared to pay a subscription to their manufacturer or dealer for.
The connected car is a true multi-screen environment
Drivers entering their car don’t suddenly turn off their phones as they do on airplanes. At the most basic level those phones need to pair with the vehicle for calls. However, there is a growing movement in IVI to provide heads-up displays of their favorite mobile apps on the dashboard. That requires developers of mobile apps to embrace the in-vehicle form factor as a second screen. It also requires an understanding of the functions a driver wants compared to a mobile phone user. The other way round, if a driver discovers a great service on the dash, he should be able to continue that service on his mobile. Even within the vehicle we will start to see multiple screens, such that the passengers in the back of the car can download or stream movies while the driver is using an app to find a particular roadside amenity. Finally, we don’t expect drivers to configure their IVI on the dashboard, so we see a control app or a web portal being an important part of the multi-screen experience for configuration and content consumption away from the car.
What are the killer apps from the consumer’s perspective?
If we look to mobile, we couldn’t have predicted that Angry Birds and Instagram would have risen to dominance. So while we can’t accurately predict what apps vehicle owners will want to use in their cars, it is safe to say that the winners will deliver information and entertainment (also known as “infotainment”) to drivers. However if we lock the systems down to information services (news, weather, flight arrivals, sports, traffic, points of interest, nearby fuel, and more) and entertainment (streaming radio being the best example) we may be restricting users from choosing the apps they really want, we may restrict the developer ecosystem from creating experiences that can change an entire industry. So we believe in the hybrid approach; an open ecosystem of innovation, but with a tightly managed curated experience in the car which can evolve over time as needs and trends change.
What are the killer features from a car manufacturer’s perspective?
Car OEMs need to create additional stickiness and brand loyalty, and in-vehicle apps are a great way to do that, whether they are OEM branded apps so that the manufacturer and its dealers an engage with its customers while in the vehicle, or via apps that add value to the car such as diagnostic, informational and other unique apps commissioned by the OEM. For manufacturers it’s not so much about the apps, it’s about big data. Cars are giant sensors, whether it’s internal parameters such as car performance and reliability or external ones such as weather and trip data, and OEMs are in a unique position to harvest that data for intelligence, planning and ultimately, commercial gain.
Unlike mobile, automotive OEMs will insist on a secure walled garden for many reasons including control and protection of the driver, so we will see a need for locked down environments where every app and service is thoroughly tested and approved. With that comes the opportunity for revenue generation based on having the keys to the walled garden where those keys are the APIs and access to the consumer and his profile.
What about the after-market? And what about OTT?
Ultimately will the car manufacturer’s in-built systems be the ones consumers use, or will they be discarded in favor of after-market solutions that offer a wider choice of apps, content, flexibility and commercial models. Those after-market devices (a great example being GPS devices) are being purchased in the millions. Android as an operating system has the potential to be the platform of choice in vehicles but will it be an after-market add-on? Or will the driver’s smartphone be the device of choice? As we have seen in the TV market, there is a strong desire from consumers to go “OTT” (Over The Top), by buying their own terminals and then paying for content and services. This is the biggest risk to the car manufacturers, and if they embrace the above 9 points in the right way, they have every chance of being in control of the in-vehicle experience for the entire lifetime of the vehicle.
AppCarousel is a leading app store provider that provides custom app store solutions and app ecosystem management for major organizations across a variety of sectors including consumer electronics, automotives, telecommunications and IoT (Internet of Things). AppCarousel takes the complexity away from app distribution and app ecosystem management by powering the curation, management, distribution and monetization of apps. AppCarousel helps to drive app discovery, adoption and revenues by putting organizations in control of their app strategies and allowing them to capitalize on the growing app economy, while delivering an enhanced customer experience across multiple screens and connected devices. AppCarousel, based in San Francisco, is part of Wmode Inc. For more information, visit http://www.appcarousel.com.
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