HOW CONNECTED MOBILITY TECHNOLOGY IS DRIVING THE FUTURE OF THE AUTOMOTIVE INDUSTRY – PART 2

This is the second article in this 2-part series

Four key trends of the connected car paradigm

The connected car is changing the way we perceive our driving experience. We have identified four key areas of connected car technology that are shaping the industry future, driving new business models and creating a new technology paradigm.

  1. Navigation and parking

While navigation technology has become a standard feature in premium vehicles, the interactivity with other drivers and users is becoming more common and it is expected to be a standard feature in new vehicle models. Start-ups such as Waze were a key driver for the mass adoption of social platforms by drivers and it could be suggested that they were the pioneers of the connected car revolution for the wider industry. Waze was recently sold to Google for over $1B and is being integrated into Google maps providing intelligent crowdsourced information to millions around the world. Connectivity is also changing the world of parking, with a number of start-ups using smart algorithms to predict parking behaviour in real time as well as providing availability maps for drivers and municipalities. One of the key challenges in both navigation and parking analytics is the monetization of these services and we can expect to see some business model innovation in this area.

  1. Vehicle analytics

In-vehicle analytics is also creating significant opportunities for technology players. Initially this technology was mostly being used for large fleets in commercial vehicles making it possible to manage driver performance and vehicle diagnostics in real time and helping improve fleet safety and reduce maintenance costs significantly.  The positioning of such an offering for the mass consumer market has not been established, but we can expect to see this technology impact the way we maintain and insure our cars as well as features for monitoring our own family driving patterns and behaviors.

  1. Wearables

Another important factor in the connected car paradigm is the use of wearable devices and the information extracted from them. These items can be expected to assist in creating additional connectivity and in the short term will allow for connectivity for drivers in non-connected cars. For example the use of smart glasses can provide access to augmented reality navigation prior to the installation of a HUD or virtualization projector. Using data from wearable and mobile devices will provide a wealth of personalized data and will allow the vehicle to become contextually aware and therefore respond to specific driver needs better.

  1. Driver safety and autonomous driving

In the world of sensors and driver safety we have seen companies using various technologies including laser, cameras, night vision and radars to create smart driver assistance and collision avoidance systems. While initially these systems have been used for parking assistance and collision warnings for premium models, we can expect mass adoption of these systems while gradually moving toward full autonomous driving. This area is likely to be heavily guided by regulation and government policy and we can expect the adoption of full autonomous driving to be gradual and limited to specific areas.

These four key trends are an indication of the wealth of opportunities in the connected mobility space, however, while connectivity provides multiple benefits, it is also a vulnerability to core vehicle systems through its multiple wireless entry points (RDS, GPS, cellular, IR, WiFi, etc.). As vehicles become ‘smarter’, all systems become interconnected via the vehicle CANbus providing direct access to critical vehicle systems. Most recently, there has been a significant amount of work conducted around understanding the future threats in this area from simple auto-theft to more advanced cyber terrorism. A number of automotive specific cyber firms have been setup in order to build up expertise for tackling such challenges and ultimately to provide us with vehicle firewalls and other cyber security mechanism.

Connectivity driving new players into the Auto industry

While vehicle connectivity has been relatively slow to enter the global auto sector, the Chinese auto industry has shown strong commitment and vision in this area. In fact, China has already made fundamental moves to ensure that it will be a global leader in the auto mobility paradigm.

The unique context of China’s urban transportation challenge, the high rate of adoption of mobile device connectivity, combined with the rapid and aggressive introduction of alternative mobility and ownership concepts will compress the time needed to commercialize smart, connected car technology and related services.

However, while China holds a tremendous ability to scale the manufacturing of its auto industry, its corporate structures lack the flexibility required for the development of new ‘out of the box’ technology and therefore it requires an external source of innovation to support this area of growth.

Prof Steven Spiegel of UCLA presented a model of ‘Importing Innovation’ from small innovative nations to large industrial superpowers. He presents the notion of economic complementarity between the US and small countries such as Israel, Singapore or Finland as drivers of ideas and innovation.

By way of example, Israel, dubbed the start-up nation, is known for its disproportional number of successful start-ups, doctors, scientists, engineers, registered patents and NASDAQ listed companies and could offer a unique development platform for major industrial countries such as the US or China. Israel’s experience in developing world class military technology combined with its leadership in mobile technology makes it a unique potential partner for the Chinese Auto industry in its quest for seamlessly integrating connectivity into cars.

Such collaborations could act as a powerful springboard for the Chinese industry in its path to establish global leadership in the auto industry.

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End of Part 2 (of 2)

Click here to read Part 1

For further discussion, please contact the authors:
Bill Russo
Managing Director,
Gao Feng Advisory Company
bill.russo@gaofengadv.com

Chee-Kiang Lim
Principal,
Gao Feng Advisory Company
ck.lim@gaofengadv.com

Guy Pross
Managing Partner,
31ºNorth Innovation Exchange
guy.pross@31degreesnorth.com 

Uri Kushnir
Managing Partner,
31ºNorth Innovation Exchange
uri.kushnir@31degreesnorth.com 

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