The Connected Car – IoT for Automobiles Still Doesn’t Matter

IoT is the combination of being able to connect everything to the Internet and linking in Big Data. These ushers in many possibilities, including “the connected car.” But this post will tell you why IoT for automobiles still doesn’t matter.

If you’ve been following me, you know I’ve been exceptionally bullish on the state of IoT in numerous industries and sectors. There are huge dollars to be made and a big value to add. The way consumers interact with companies, processes, and enjoy products is all about to change.

But, what about cars? This is the one area that’s keeping me skeptical.

And to be clear, I’m not talking about automobile manufacturing…that is a hotbed for IoT…I’m talking about the vehicles themselves.

Thus far, we haven’t really seen much apart from fancier infotainment systems and modest home IoT integration. And believe me, I love technology, IoT, and cars. I want to believe it!

But are consumers really demanding and buying IoT features in their cars? Is it offering compelling features and making it worth the investment from a car manufacturer’s perspective?

Or are people still just buying cars based on traditional factors and sex appeal?

In case you need to catch up, here’s how IoT is rocking other industries

  1. IoT in Healthcare Business Trends for 2016
  2. The Top 3 Home IoT Opportunities in 2016
  3. The Top 3 IoT Devices in Aviation Right Now
  4. The IoT Remote Connectivity Feature Hot List
  5. Stop Using a VPN to Connect to Your Products
  6. How to Make Remote Connectivity Scalable from Day 1

Alright, back to cars. Who cares about connected cars?

Cars seem ripe for IoT features. Safety, comfort, convenience, information availability, and reliability could all be dramatically improved.

Yet, IoT in cars is largely still a novelty. The real magic is all behind the scenes during the manufacturing stage, but that has more to do with the manufacturing IoT revolution than the consumer-facing opportunities.

“True, automakers have yet to turn the “connected car” into a significant revenue generator or a key driver of vehicle sales: Despite two decades of TV ads promoting advances in in-vehicle connected services, drivers have resisted paying extra for those features, either not understanding the new technologies or simply seeing little value in the services offered.” – Deloitte University Press – The Internet of Things in Automotive

Think how much GPS, originally introduced to consumers in 1996, has transformed cars for consumers. Personally, I won’t purchase a car without a great GPS and navigation system. Sitting in a car without makes me feel uncomfortable. In a very short time, it has become a standard expectation. Much like I wouldn’t buy a TV without a remote, I sure won’t buy a car without GPS.

Where’s that “need to have/can’t live without” IoT feature?

The BIG PLAY for connected cars?

While we see some minor consumer-facing IoT plays going on (and nothing that’s exciting me), there really are a couple of big plays that will bring the sort of revolution IoT has to other industries. These aren’t incremental changes and improvements. These are evolutionary leaps.

1. Self-Driving Cars

This is the biggie. While there is no shortage of obstacles, companies like Google and Tesla are forging an entirely new path that could completely shift how we humans interact with our cars. This is truly revolutionary stuff.

Most exciting is self-driving cars could massively improve traffic and safety. Without human error and variability, transportation becomes an entirely new playing field.

“Tesla CEO, Elon Musk said that in 20 years, owning a car will be a lot like owning a horse [1] and Morgan Stanley expects “full automation” by 2022, creating $1.3 trillion value in the United States alone.” – Alam, M. (n.d.). The Software Defined Car: Convergence of Automotive and Internet of Things. In Wireless World in 2050 and Beyond: A Window into the Future! (pp. 83-92). Springer International Publishing.

With the rise of distracted drivers (IoT takes some blame here!) and traffic, I for one am eagerly anticipating this revolution.

“America’s drivers wasted 6.9 billion hours in traffic in 2014 [3]. This is bound to come down tremendously, and consequently, will shoot up American productivity and scope of a knowledge-based workforce.” – Alam, M. (n.d.). The Software Defined Car: Convergence of Automotive and Internet of Things. In Wireless World in 2050 and Beyond: A Window into the Future! (pp. 83-92). Springer International Publishing.

2. Fleet operations

Individuals are not the only consumers of automobiles. Fleet vehicles are a huge portion and stand to see massive improvements based on IoT. The impact on serviceability, knowing what drivers are doing, eliminating/minimizing drivers, and having better real-time logistics modeling all stand to blow current techniques out of the water.

The Wall Street Journal has a great article on vehicle sensors and their impact on the overall supply chain: Internet of Things Reaches Into the Trucking Business.

Market projections for the connected car

Alright, I started this article off saying I’m not nearly as excited about Automobile IoT as I am about IoT in other industries. And I’m not, mostly because it won’t be impacting our lives as heavily for years to come.

But…those changes that are coming are going to be massive. And that I’m looking forward to.

What else is going to slow down the connected car? While the technology is still in experimental stages, the connected car is not just about technology. There are very significant hurdles to overcome as these big plays put lives at stake and fundamentally alter a heavily regulated landscape.

That said, here’s some information on exactly how big and fast the market is expected to be.

“Analysts differ in their estimates, but all agree that the prospects are staggering. Gartner predicts that by 2020, more than 250 million vehicles will be connected globally, with the number of installed connectivity units in vehicles worldwide increasing by 67 percent and consumer spend on in-vehicle connectivity doubling.” – Deloitte University Press – The Internet of Things in Automotive

Delloitte Univesity Connected Car

“An estimated CAGR of 8.95% from 2014 to 2020. The Americas accounted for the leading market share in the overall IoT in transportation market, followed by Europe and APAC.” – IoT in Transportation Market by Components, Products, Software & Services, Verticals Solutions, Applications, and Geography – Analysis & Forecast to 2014 – 2020. 2015. Normans Media Ltd.


What do you think? Am I off base in my “meh” approach to the connected car?

I greatly look forward to the future, but as a consumer and also an IoT businessperson, I’m going to focus my energy elsewhere…for now. Aviation is what gets me going…check out how the F-35 compares to the Tesla »

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