One quick stroll around this year’s Consumer Electronics Show made clear it’s “game on” for in-car connectivity, as mobile devices collide head-on with the automobile. But if you think this is about telling your dashboard, “Play 'White Stripes,'” you’re missing the point.
The reality is that automotive connectivity will come in several flavors, and those data and voice pipes will connect to the cloud and provide all manner of service, productivity, safety and entertainment possibilities.
Ford legitimately caught the industry sleeping at the switch when it launched the Sync in-vehicle connectivity system in late 2007. Not only was it a major leap on the technological front, it was one of the best automotive marketing plays since the Toyota Prius.
But the ability to connect your smartphone via Bluetooth and have seamless integration with media, voice and data is but the tip of the iceberg. The same can be said for embedded cellular capabilities that offer safety and security, such as GM’s OnStar and the Mercedes-Benz Mbrace.
Audi, BMW, Hyundai, Mini, Nissan and Toyota have jumped into the fray as well. Now the supply base is responding with fully integrated infotainment systems built around an embedded telematic device coupled with a tethered phone.
This combination is an important distinction to understand.
Having the perpetual connection allowed by an embedded device gives you the ability to interact with the vehicle even if you don’t have your phone. General Motors, Mercedes and Nissan are among those providing smartphone apps that allow customers to read diagnostic information, lock or unlock doors, start the car and track their vehicle from just about anywhere. An embedded device also allows reflashing control modules in the vehicle, in much the same way you get software updates on your laptop.
You also can remote-program the vehicle from a handheld device and save the profiles among several cars. As electric vehicles and the development of the smart grid take off, this will be a huge enabling tool.
Already we’re seeing smartphone apps that let you program when a car like the Chevrolet Volt will draw power from the wall socket. All this is to say, as cellular speeds increase and the cost of service decreases, automakers will be putting embedded cellular devices in vehicles across the board.
We’re seeing the rapid proliferation of application-based capabilities. Internet radio; location-based search apps; vehicle maintenance apps; traffic, navigation and mapping applications; media streaming; and even video chatting are proliferating.
These capabilities are marrying nicely with services such as automatic crash notification, mileage-based insurance (which tracks actual mileage to precisely figure your premium), vehicle diagnostic alerts by email, advanced navigation and emergency calling -- all through an embedded cellular connection.
But time on the network costs money, so who pays the bill? That will depend on you. Obviously you pay the cellphone bill. But the embedded connection is another issue.
One of the favorite business models within the industry is using an embedded telematic device to pepper drivers with advertising, location-based marketing and other schemes to generate revenue. In return, customers in this “freemium” model would receive a host of services, such as automatic crash notification, mileage-based insurance, family tracking capabilities and more, in exchange for surrendering your vehicle’s data for diagnostics and location.
Think about driving down a row of restaurants after exiting the interstate and having the vehicle chirp that you can get two-for-one Big Macs if you hit the Micky-Ds instead of hangin’ with the Colonel. Another possibility is monetizing point-of-interest searches made from the car by giving preference to sponsored partners.
It sounds attractive on paper, but in reality, the specter of Big Brother, the annoyance of in-car spam, and privacy concerns are big friction points. Also, the opportunity isn’t as big as some suspect. Think about it: 95 percent of the time you’re in the car, you know exactly where you’re going and it’s usually a set trip, like driving to work or school.
Additionally, you already get hit with ads and marketing offers through dozens of other means before you drive, and the providers of vehicle connectivity systems will compete for scarce mobile-marketing dollars. And while there’s definitely something here, there’s a legitimate question as to whether auto companies and other players can beat Google at the location-based marketing game.
It could be that automakers simply eat the cost or fold it into the price of the car, or use the customer-relationship-management opportunities for sales and service upselling. The idea is that if you can get the get the vehicle’s diagnostic information and then respectfully use it to interact with the customer -- “We see you’re due for an oil change and 12K service” -- you can keep the customer closely tied to the dealership. There’s an incentive for this, because service retention leads to sales retention in a business where the sheer number of quality automobiles make brand loyalty hard to come by.
And don’t think a subscription model for truly desirable services such as concierge call-center support, emergency assistance or crash notification is an outdated model. Subscriptions may not work for everyone, but they remain highly viable. Just look at OnStar and SiriusXM.
The flashing red light in all of this is the issue of distracted driving, which is not to be taken lightly. Suffice it to say, this will be a huge tempering force in how connectivity proliferates and in what flavors -- especially since Transportation Secretary Ray LaHood is making it a big issue.
But the very same connectivity that could be so distracting also could make us safer with the advent of intelligent vehicle highway systems, augmented reality-based navigation and a host of technologies under development that will alert us to danger before we’re even aware of it.
The automakers that move quickly and decisively into this new frontier will have the technological and marketing advantage as our world grows ever more connected. Game on, indeed.
Photo: Steve Fecht/OnStar
