Blog: Connected Cars

This blog post was written by Howie Chan, Business Analyst at TechAlliance.

Remember those OnStar commercials from the late 90’s?  GM has been integrating cellular and GPS technology into its cars since 1996. To put this into perspective, 1996 was the same year the late Steve Jobs returned to the ailing Apple after NeXT was acquired for $427 million.

Fast forward to the present where Tesla has made leaps and bounds in electric vehicles, Google is playing around with autonomous vehicles, and major manufactures have automated features like parallel parking.

IDC Canada, a global provider of industry research, predicts connected cars (along with the trend of the Internet of Things) will have a profound impact on Canadians in 2014. Citing technologies like OnStar, Blackberry’s QNX, in-car Bluetooth and a growing demand for in-car apps, connected cars are an example of an ecosystem of “unlimited growth” potential.

Big software players like Pandora and SiriusXM already come pre-loaded in certain technology packages for new vehicles. Through relationships with OEMs and market acceptance of broad utility, these pioneers are tapping into a growing market opportunity.

The platform exists and apps are already installed; why not build apps for cars?

First let’s look at some reasons not to. Cars aren’t used the same way phones are. Like developing apps for televisions or the switch from phone to tablet, UI/UX changes drastically. Developers and entrepreneurs will need to consider how users interact with cars and establish new frameworks of design and usability.

The market size for existing cars is drastically smaller than the smartphone market. Not to mention the latter is growing at a much greater rate.

*data taken from Wikipedia’s List of countries by vehicles per capita and List of countries by number of mobile phones in use

Business models are also unclear in the smart car ecosystem. At the end of the day, who pays for the app?

At the other end of the decision analysis, competition is low. Compared to the growingly crowded smartphone app ecosystem, genres have yet to be explored for smart cars. Not only is there overlap between existing apps that can be “ported” over to the connected car (like Pandora, and navigation apps) developers have yet to explore the plethora of sensors available in the car. From efficient and safe driving, to augmented reality experiences, the car’s sensors have much to offer.

For example, in 2013 Volkswagen announced an augmented reality media-driving app for its Golf GTI called Play The Road and Nissan launched Nismo a connected car smartwatch.

Drivers are also prohibited from using their cell phones will driving. On the other hand, integrated applications are allowed. Although this regulation implies future considerations of UI/UX design for car applications, it does however mean that there are unique competitive and value-added advantages to developing new solutions for cars.

Finally, because of existing limitations to interacting with cell phones while driving, and the benefit of redesigned and integrated applications, new car apps have a potential to tap into some serious pots of gold. Creative new business models will have a profound impact on this platform (consider the first instance of the app store model.)

Smart cars will undoubtedly play a role in the near future. With CES 2014 running in Las Vegas this week, we’re sure to see some new tech in the smart car sector (a Google Android-based system for your car?)

Leave your thoughts and comments in the section below or shoot me an email at howie.chan@techalliance.ca .