Automakers looking to continue their revenue growth are challenged by the diminishing prospects for post-sale revenue from replacement parts. Conventional cars are becoming increasingly reliable and electric vehicles (EVs) need little servicing due to their reliance on electronic rather than mechanical components.
Meanwhile, connected vehicle technologies are enabling automakers to remotely deliver software for entertainment, safety, and performance upgrades. Central to this new revenue stream are vehicle operating systems (OSs) that can receive content from automakers or stream it from mobile phones.
Google’s Android Auto and Apple’s CarPlay software platforms are starting to take over, according to auto executives who spoke on a panel during the recent South by Southwest conference.
A Flat World
“Android and CarPlay have made a flat world” for app developers looking for space inside vehicles, said Nick Sugimoto, senior program director at Honda. Google’s Play Store, a popular service for downloading music, videos, and games, currently is not being used for sales within cars today, added Sugimoto, but Honda is working with the company to define an automotive platform.
Jenny Kim of Hyundai Ventures said that while her company also supports Android and CarPlay, Hyundai has its own offerings for music and mirroring mobile phone applications. Its Blue Link is used to connect to the car to the home and networked home devices. Hyundai subsidiary SoundHound, which provides the platform for the Hyundai Sonata, announced that it can also identify the music being played on wearable devices.
Moving control of popular applications from the mobile phone to the dashboard enhances safety, according to Sugimoto. Instead of looking at the phone on your lap, drivers can be looking forward at the display, he said.
Beyond Honda and Hyundai, Android and CarPlay are becoming the default automotive OS on many other models, such as the recently announced Volkswagen Passat Alltrack that supports both platforms. Conversely, Ford has switched to BlackBerry’s QNX OS for its in-vehicle platform.
In the Air Tonight
Connected vehicle technology is being leveraged most in EVs, which include wireless connectivity so that drivers can monitor the state of the battery charge, find charging stations, and perform other functions. Tesla Motors has been the most aggressive in over-the-air upgrades to vehicles to boost performance or enhance safety remotely rather than having to recall vehicles to be serviced. Tesla recently issued a remote upgrade for the Model S that will alert drivers if they stray out of range of one of the company’s Supercharger stations when driving on a low battery.
“There’s no question, over the air is coming” as a mechanism for issuing fixes and adding new features, said Hyundai’s Kim. Over-the-air distribution costs less and allows automakers to keep up with the advances in software outside of their normal 5-year or more development cycle.
For details on the varied initiatives that car companies are exploring to boost revenue, see Navigant Research’s report, Alternative Revenue Streams for Automakers.
Tags: Advanced Transportation Technologies, Clean Transportation, Electric Vehicles, Transportation Efficiencies
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