Are You Getting it Yet?
Written by Jason Craker on
Sometimes we miss an inflection point in a market because the way we currently see the world blinds us. We see what it reminds us of, not what it could become. The biggest breakthroughs are achieved by those who can put aside their preconceptions and ask “What if?”
In 2007, Steve Jobs spoke these words at an Apple product launch: “It’s an iPod, it’s a phone, it’s an internet communicator. iPod, phone, Internet – are you getting it yet? These are not three separate products, this is one device.” He was, of course, announcing the iPhone to the world – a truly game changing product that shattered our preconceptions about mobile communications and computing. Having reflected on this long and hard, and having successfully completed the acid test of explaining it to my mother, I can categorically state that the best way to understand the potential of the connected car is to stop thinking about it as a car.
So How Does That Help Us?
The connected car is a computer on wheels, a mass of sensors and collection points. It produces data – LOTS of data. That data can provide companies with better business intelligence and new revenue opportunities. It can provide consumers with innovative value-adding services, both delivered to the car based on route, location or destination and built around data transmitted from the car.
The future is all around us, albeit in an early form. Some of you will have received an email from your manufacturer reminding you it’s time to book a service, or even had your car’s dashboard tell you directly . You might have bought services like map updates or real time travel information – services which were downloaded to your car over the air through a built-in SIM, just like software updates on your phone. You might have used a smartphone app to remotely start your car on a cold day before you start your journey, to remotely lock or unlock it or to remind you where you parked. All of these are examples of connectivity and they’re all designed to make your life easier. Some connectivity functionality even makes driving safer. If you have an accident and an airbag deploys, your car can notify the emergency services and give your location using GPS sensors more accurate than anything on your phone.
Time to Dream a Little Bigger
As useful as today’s connectivity services are, they’re just the start. In China, where we see the greatest adoption of and consumer desire for connectivity, cars already have facial recognition software that identifies who is getting into the driver’s seat and adjusts the seats, mirrors and steering wheel accordingly. As in-car operating systems develop, manufacturers are following Apple and Google’s lead and offering third party apps through an approved automotive app store – apps which could help you find a parking space and guide you to it, suggest places to eat and book you a table, or warn of adverse road conditions ahead which might impact your journey.
Rolls Royce monitor their jet engines wirelessly, use AI to predict problems based on the data, and schedule preventative maintenance, avoiding costly downtime for their clients. How long before your vehicle manufacturer shifts to fixing problems before they happen rather than after? It would be an enhanced experience for private car owners but it would be transformative for commercial fleets whose vehicles only generate revenue when they’re moving! In fact new entrant Lynk&Co offers preventative monitoring today. Every other week, their cars get a wireless health check, tracking their wellbeing and planning proactive maintenance if necessary.
In August 2020, Luke Ibbetson, Vodafone’s Head of Group R&D, spoke about Cellular-Vehicle to Anything (C‑V2X) and described a future in which vehicle‑to-infrastructure services enable the car to exchange information with traffic lights, road signs, and lane markings – connected cars talking to smart cities. If you think that’s far-fetched, what would you have said if, five years ago, someone told you you’d have a voice-activated digital assistant sitting in your living room? Alexa, order me my usual pizza please, and turn down the central heating… Ibbetson also identified one of the keys to success in this brave new world when he observed that “new commercial relationships need to be established between different stakeholders”. V2X brings the car firmly into the realm of the Internet of Things but it’s a team sport. Collaboration is a critical success factor but it’s not a core skill for many businesses. How will you build your eco-system? Who will you include? How will you work together?
Ideas for new connected services can come from the humblest of beginnings. The modern car is a moving mass of sensors which monitor all aspects of its performance. Most of us have had the teeth-jarring experience of driving over a pothole. Sensors in your car also “feel” that bump and could provide local councils with information about the location and depth of the hole. By pooling the data from all the cars in a defined area, the council could prioritise its roadcrews to fix the worst potholes affecting most drivers and share the information with other vehicles in the vicinity, warning them to avoid that area. Similarly, pooling data on traffic incidents, or even when drivers hit the brakes hard, can indicate potential issues with road layouts, signage or traffic signals, information that can aid road planners and ultimately reduce accidents.
As with all data-based sectors, data privacy concerns and security breaches are paramount, and the connected car must evolve within strict regulatory frameworks such as GDPR in Europe and CCPA in California.
As cars continue to become more electronic than mechanical, manufacturers must shift their mindset and start thinking more like a software company. We don’t think twice about upgrading a software subscription service to add another device, moving to an ad-free premium experience, or adding a sports channel to our streaming TV service, so why not apply that model to cars? What if you could pay to unlock the full potential of your car for the weekend and have your manufacturer wirelessly adjust its engine management system to increase performance? You can apply parental controls to your streaming service, so why not limit the performance of your son or daughter’s car until they get through their provisional driver period? How about if your vehicle manufacturer let you know that, based on your driving style, you’re not using an important safety feature you’ve purchased, and told you how to enable it ?
Like software, cars might be shipped with a full range of capabilities but you decide which you want to pay to unlock. Over the air (OTA) updates, whether delivering new capabilities or unlocking existing ones, represent an important future revenue stream for manufacturers, one they’ve only just started to explore.
I’ve mentioned a few simple examples but there are thousands more! If you want a glimpse at the potential of connected car data, go to wejo.com. In their own words, Wejo “transforms and enhances big data, turning it into meaningful products that power innovations, drive efficiencies and innovate mobility”. The numbers are mind blowing – 10.6 million connected cars being monitored, 42.3 billion journey miles analysed, 8.6 trillion individual data points collected. And Wejo only has a proportion of the vehicles on the road. It’s a data centre service provider’s dream!
Turning Dreams into Reality
The connected car, together with data mining, analytics and business intelligence, is about to change the automotive industry. It will enable manufacturers and their partner ecosystems to create highly profitable new revenue streams, increase business efficiencies, enhance safety and deliver a loyalty-building customer experience for both drivers and passengers (we haven’t even talked about streaming services for passengers yet!). Companies like Facebook, Google, and Amazon have shown how successfully data can be monetised. Whether this new future represents an opportunity or a threat for an individual company depends on its ability to recognise the potential, build an effective ecosystem, and turn data into insight, action and revenue.
I believe the connected car represents a huge potential. It also poses a risk. Whilst the critical success factors for this new market are relatively new to the automotive industry, they’re old hat for players in other sectors. The rumours of Apple toying with the idea of creating an EV should terrify traditional manufacturers, not because Apple will be better at building cars, but because they are world class at turning data into insight and creating value-generating ecosystems.
Is it all just hype? If we build it, will consumers come? A recent McKinsey article included the statistic that 56 per cent of consumers in China said they’d be willing to change car brands for better connectivity. Addiction levels to smartphones in the West suggest that consumers here probably won’t behave that differently.
The day isn’t far away when the most valuable thing about a car won’t be the vehicle itself but the data and the insight that it’s generating. How well will today’s manufacturers compete as the car evolves further towards a computer on wheels? On the subject of outflanking the market, Jobs once said, “our task is to read things that are not yet on the page” Remember how you thought about mobile phones the day before the iPhone was launched. Now think about the apps and services on your phone today and your reliance on them. Imagine living without them. The connected car will be every bit as revolutionary as the smartphone !
Winners write the future, everyone else reads about it in tomorrow’s headlines. Which one will you be?
I’ll be looking to share further thoughts and insights on several other automotive-related topics in the coming months so please continue to look out for further blog posts. As always, if this blog or any of the others has sparked an idea that you’d like to talk about, please get in touch.
Here at changemaker, we support organisations and individuals in delivering sustainable and lasting change, especially during pivotal times of transformation. Our 5 Step change model allows us to help identify the changes that need making then bring a structured process to change that fully engages your people and makes change predictable so you can be certain of realising your goals in an increasingly uncertain world.
If you want to learn more about us, take a look at our website www.changemaker.org.uk or email myself at jason.craker@changemaker.org.uk.