The Connected Vehicle: Viewing the Road Ahead

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The Connected Vehicle:
Viewing the Road Ahead

2
Introduction
In the past decade, auto manufacturers have installed various
technologies designed to make cars safer, more responsive, and
more pleasurable to drive. From the hands-free cellphone, to iPod
berths, to satellite radio, to automated parking—not to mention
Google’s self-driving vehicle—the automobile is undergoing
an electronic overhaul that promises to transform its role for
consumers. What once was perceived as personal transportation
is fast evolving into a new mobile device, merging with the digital
world into an all-encompassing communications environment.

3
This ongoing transformation is poised to shift into high gear as cars display still greater
connectivity and broader capabilities than ever. What makes this shift different from the
way automobiles adopted new technologies in the past is that this time, automakers may
have to consider how they can quickly merge consumer electronics and software with
their traditional automotive systems.
Moreover, the consumer—whose
platform preferences have
already been made clearly and
decisively known in the electronics
marketplace in general—could
exert a greater influence on the
automotive industry as well.
The overwhelmingly broad
acceptance of technologies from
Apple, Google, and Microsoft
will easily spill over into the
automotive interior. This shift
could have major implications
for automotive OEMs.
As consumers express their
preference for the in-vehicle
technologies, form factors,
and brands they have grown
accustomed to using elsewhere
in their lives, automotive
manufacturers may be forced
to follow suit. In other words,
if automobile Brand X is the first
to offer Apple CarPlay™ to rave
reviews and brisk sales, can other
carmakers afford to stand by idly
and watch?
This paper examines the key
trends affecting the connected
vehicle, the role of the consumer
in deciding these technologies,
and the likely role that third-
party technology leaders such as
Apple, Microsoft and Google may
play in determining in-vehicle
technologies. We also look at how
the concept of the connected
vehicle extends to services in
a B2B setting—such as fleet
management—and the importance
of vehicle use data collected by
telemetry technologies to OEMs’
connected vehicle services.

4
Contents
Tap or click icon to
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Consumer in
the driver seat
Good timing
for the
connected
vehicle
Non-passenger
cars welcome
Looking down
the road
Connected
vehicle will
spawn business
opportunities
How to make
the connected
vehicle a reality
Mobile device
the gateway?
How should
companies
prepare for this
market?

5
Positive consumer attitudes toward a variety of technologies and services in vehicles,
such as reports on the vehicle’s health and maintenance, are driving these changes.
According to Accenture research, some of the most popular features are safety-oriented.
Consumer in the driver seat
1
Accenture Connected Vehicle: What Drivers Want 2014 research - http://www.accenture.com/us-en/landing-pages/products/Pages/connected-vehicle.aspx
These include fully automated
parking, lane-changing warnings,
lane-keeping systems, collision
warning devices, emergency
calls, and automatic braking that
prevents the car from running into
an object.
In fact, consumers so heavily favor
the purchase of a vehicle based on
its in-vehicle technology options,
that performance—traditionally
one of the top factors swaying
a purchase decision—takes a
back seat. Drivers are twice as
likely to choose a car based on
its technology options than on
its performance according to
Accenture research.1
For example,
some 39 percent of drivers
surveyed said their primary
consideration in choosing a new
vehicle is in-car technology.
This compares with 14 percent who
said driving performance was the
biggest influence on their choice.
Nor is this preference confined
to the traditional automotive
markets. Consumers in emerging
markets were similarly favorable
toward in-car technologies.
Accenture research found strong
demand from consumers in
emerging markets, as drivers
in China, Brazil, Indonesia, and
Malaysia expressed the greatest
interest in all of the connected
vehicle technologies and digital
capabilities currently available and
used widely by consumers in more
mature markets.

6
Several factors have converged to make the connected vehicle not only possible today,
but essential from a consumer view. For one thing, barriers that once made machine-to-
machine communication difficult to achieve are coming down across the board.
Good timing for the connected vehicle
2
Accenture Connected Vehicle: What Drivers Want 2014 research - http://www.accenture.com/us-en/landing-pages/products/Pages/connected-vehicle.aspx
With the smart home equipped
with sophisticated electronics—
entertainment, energy
management, security, and other
systems—as well as emerging
“smart city” applications such
as parking location, intermodal
transportation, and traffic control,
it’s no wonder consumers are
waiting for the “next big thing.”
Indeed, there is pressure to not
only meet, but exceed, customer
expectations for interaction
between devices, and for digital
intelligence to augment the
consumer’s physical experience.
The auto industry is responding
with innovations of its own—
often led by newcomers that
are changing the industry
paradigm, such as Google with its
autonomous driving car, Tesla with
the electric vehicle, or Daimler with
its car2go™ car-sharing business.
Some 90 percent of survey
respondents2
expressed an interest
in some autonomous driving
options, primarily those related to
safety. This demand for aspects
of autonomous driving has
already encouraged automotive
OEMs, regulators, and industry
organizations to address the current
barriers to widespread use of such
technology as Google’s driverless
vehicle (see sidebar article).

7
Another reason the connected
vehicle is timely is the convergence
of a robust ecosystem offering
a fertile environment for in-
vehicle innovation. Numerous
companies and parts manufacturers
serve this developing industry,
including automotive OEMs,
telecommunications operators,
consumer electronics firms, and
software and application developers.
A final factor is the general
evolution of the automobile system.
The automobile traditionally has
been a closed system whose
offerings were dominated by
the automakers themselves.
If a third party wanted to develop
an application to play in the
vehicle interior, they first had
to go through the carmaker.
Now, however, the convergence
of consumer electronics in the
car portends a change in that
relationship, one that could well
reduce the OEMs’ purview.

8
The connected vehicle concept is inherently flexible, enabling the application
of in-vehicle technologies to industrial vehicles and heavy equipment.
Non-passenger cars welcome
Industrial vehicles can benefit
from a telematics platform capable
of transmitting a collection of
data from their machines on
a global basis.
Heavy equipment operating in
remote locations can send engine
performance, fuel consumption,
mileage, and other data to a
central site for processing and
necessary follow-on servicing.
Vehicle data is sent to the
connected vehicle platform, with
real-time processing of the data
enabling decision-makers to act
on fuel consumption and other
service-related trends.
This could be beneficial to a
host of industries—including
agriculture, insurance, health,
advertising, and location-based
services such as couponing and
other business promotions—and
represents a promising, and
potentially very profitable,
revenue stream for carmakers.

9
With in-vehicle technology currently undergoing a rapid transformation, consumers can
expect to see a variety of different telematics solutions in their cars before a common
platform is adopted by the community of automotive OEMs.
Looking down the road
One factor slowing the in-
vehicle transformation is the
fact that consumer electronics
continues to evolve faster than
the OEM electronics in vehicles.
For instance, the lifecycle of the
consumer cellphone is minimal
compared to that of commonly
accepted technology inside a
personal auto.
In one scenario, a lightweight
“silver box” in the car would
provide basic Bluetooth
connectivity to all technology in
the vehicle, but at the same time
open to potential upgrades or
apps that would enable greater
longevity for the technology.
A critical factor is the need
for standardization to enable
true portability. For instance,
consumers could bring their
own user interface to this box
in the form of their tablet or
smartphone and immediately
enjoy the full connectivity to
which they are accustomed.

10
If the connectivity between
the tablet and silver box is
standardized—say, for instance,
it’s a common USB-enabled
“docking station”—then
interoperability across different
cars becomes possible. To this
end, joint ventures may develop
between car manufacturers and
consumer technology companies.
The current in-vehicle display
size also is likely to expand to
accommodate a host of new
capabilities, some of which the
driver or passenger would access
when the vehicle is parked or
stopped. The current size of six or
nine inches could be eclipsed by
larger displays that could handle
the many applications that will
find their way into the vehicle to
add convenience for the driver.
For instance, the display could
feature a “smart” instrument
cluster that includes traditional
dashboard indicators as well as
those related to infotainment
options, such as the one on
the 2015 Audi TT concept car
previewed at the 2014 Consumer
Electronics Show.3
The display
also could more closely duplicate
the experience consumers are
accustomed to when using their
current computing devices—
such as a laptop that might
have scores or even hundreds
of different applications—and
could offers consumers the
opportunity to extensively
personalize the user interface.
Importantly, displays likely
will support different interfaces
for various people in the car.
For instance, the driver will need
a dedicated interface linking to
specific content related to vehicle
performance, road conditions,
and vehicle status. Front-seat
passengers will need a separate
interface to other content, such
as access to the radio controls and
navigation. Passengers in the rear
of the vehicle will want a third
interface, providing access
to entertainment content such
as videos and music.
3
http://www.themotorreport.com.au/57982/audi-reveals-new-tt-interior-at-consumer-electronics-show

11
The ability to source data from vehicles will enable a range of new business-to-business
and business-to-consumer digital services, Accenture believes.
Connected vehicle will spawn
business opportunities
For example, data sourced
from vehicles could be used
to enable a portfolio of value-
added consumer services such
as vehicle diagnostics, driving
dashboards, and concierge
services. These could be delivered
to drivers through multiple
devices—a vehicle’s head unit, or
a driver’s smartphone or tablet.
As the connected vehicle becomes
more of a reality, automotive
manufacturers also will find
it essential to upgrade their
online offerings to consumers.
With connected vehicle
technology rapidly becoming
a key car-purchasing criterion,
consumer expectations for
greater responsiveness to their
needs and desires will require
that manufacturers provide
more customized, interactive
websites to better aid consumers’
car-buying decisions.
For instance, based on Accenture’s
survey findings, the industry
should consider adopting digital
innovations such as web chat
and mobile-enabled websites.
These technologies can not only
further enhance the consumer’s
digital shopping experience,
but also enable automakers
to stay in closer touch with
customers while they own their
cars—to strengthen loyalty and
to provide offers for after-sales
maintenance services, vehicle
parts, or even vehicle repurchase.

12
Importantly, automakers will need
to ensure their cars are equipped
with over-the-air downloading
capabilities to deliver regular
updates and new content to the
onboard system without the need
for user intervention.
The connected vehicle also could
spawn new opportunities for
businesses in various industries,
including agriculture, insurance
health care, and advertising,
among others. In agriculture,
for instance, vehicles could be
equipped with a core set of
functionalities common
across all industries, and then
a set of differentiated vertical
applications specific to the needs
of agribusinesses.
Valuable predictive maintenance
and remote diagnostics services
for agricultural and construction
equipment also could be
supported by more sophisticated
vehicle connectivity.
As long as cars are equipped with
OEM systems for connectivity,
automakers will have the
opportunity to gather a wide
range of data from their vehicles
and work with specialized service
providers to resell that data to
interested parties. For instance,
vehicle use data is valuable to
such enterprises as fleet operators,
rental agencies, and service firms.
Equipped with information
on vehicle usage, insurance
companies could bill their
customers based on the mileage
driven. Auto manufacturers, in
effect, have an opportunity to
create a new line of business
as information brokers to
complement their traditional
role as vehicle producers.

13
For the connected vehicle to become a mainstream reality in the auto marketplace,
cooperation among key players in key industries—automotive, telecommunications,
and electronics—is essential.
How to make the connected
vehicle a reality
This industry cooperation—and,
to an extent, standardization—is
being promoted by such efforts as
the GENIVI Alliance, a nonprofit
industry group committed to
broad adoption of an open-source
development platform for a variety
of In-Vehicle Infotainment (IVI)
services, and the Open Automotive
Alliance launched by Google.
The development of the market for
telematics already has progressed
for several years, so that auto
manufacturers have begun to install
their own systems. Ford’s SYNC™
is the first example of the vehicle
being opened to a community
of developers. A development
platform, SYNC allows developers
to build their own applications that
run on a smartphone that is, in turn,
connected to the vehicle and its
onboard systems. While controlling
the apps that run on SYNC, Ford
has positioned itself in the vanguard
of the trend for automakers to
open their vehicles to enable
consumers to take advantage
of connected vehicle services
beyond those the OEM provides.
Also pursuing telematics
solutions are large
telecommunications providers,
which have embarked
on a variety of efforts to push
the connected car forward.
Some providers are acquiring
companies with telematics
capabilities, and others
are teaming directly with
automotive manufacturers.
Finally, there is the role of
technology giants such as Apple,
Google, and Microsoft. As leaders
in the personal communications
market, they exert a huge influence
on consumer desires, habits,
and expectations for technology.
The role they play in the
development of in-vehicle systems
could have a major influence on
the technologies and platforms
that ultimately become preferred
by consumers and adopted by
auto manufacturers.

14
One reason for this is that many of the solutions for the connected vehicle are
based on the premise that consumers will bring their own device—i.e., the smartphone
or tablet—into the vehicle.
Mobile device the gateway?
Thus the mobile device, in effect,
becomes the gateway between
the various technologies that
connect within and outside the
vehicle, including navigation,
entertainment, and the reporting
of vehicle health data.
Of course, when it comes to
the smartphone as gateway to
in-vehicle technology, Apple has
to be viewed as the elephant
in the front seat. Apple recently
announced a new system called
Apple CarPlay™, which considers
the vehicle as an accessory to
the iPhone. Consumers will
be able to attach different
accessories to the iPhone,
including their vehicles. Google
announced a similar technology,
called Projected Mode™, and
Microsoft has its own solution.
Apple’s CarPlay represents a
potentially disruptive technology
for auto manufacturers, which
traditionally have controlled
the human-machine interface
in the vehicle, including
much of the technology that
consumers use today to access
entertainment systems.

15
In many cases, the actual branding
of a carmaker is reflected in each
OEM’s human-machine interface
in the vehicle, including variations
in the control device (joystick or
touchscreen, for example), the
color, the background materials,
buttons, etc.
For this reason, carmakers will see
the incursion by the Apple platform
as a possible threat to their control
of in-vehicle technology.
By contrast, if consumers expect
to bring their iPhones into the
vehicle as the primary source or
gateway to the car’s infotainment
systems, Apple could become
the user interface for in-vehicle
infotainment. In other words,
Apple would completely control
the user experience into the
vehicle the same way it does for
the applications for smartphones,
the iPad, and the iPod. With
CarPlay, Apple promises to bring
the dynamics of the Apple stores
and smartphone applications into
the vehicle.
This, of course, would be much
appreciated by car buyers, who
would view it as a means to
further enhance their driving
experience via a common
technology that has become a
de facto consumer standard.
Android Auto™, Google’s answer
to CarPlay, could be similarly
disruptive. It enables a driver to
plug his Android phone into a
car’s console and turn the car’s
center display into a large-screen
interface for the phone. The
in-vehicle infotainment system
is expected to be offered in cars
from the 40-plus companies
that are members of the
Open Automotive Alliance.
In effect, the smartphone and
the vehicle’s own embedded
communication system become
the two most important pieces
of the connected vehicle.
Most solutions in the market
today are based on either
of these two platforms, and
in some cases, on both.

16
The promise of the connected vehicle is huge—affording the winners in
this market increased sales and new business opportunities.
How should companies prepare
for this market?
At the same time, making a
variety of different technologies
come together in a smooth
and coordinated fashion
presents a significant challenge
for auto manufacturers.
Carmakers also must be able to
negotiate the challenge posed by
big players such as Apple, Google,
or Microsoft, whose powerful sway
in the consumer marketplace could
ultimately enable them to dictate
the user interface in their vehicles.
Another import service
provider in this market is the
telecommunications industry,
which, because of its regional
and global fragmentation, could
require separate solutions for
different players. Finally, there
are the content providers, the
satellite radio companies and other
infotainment services that will
help create a rich experience for
the consumer.
Regardless of which industry they
are in, companies must be open
to new business models, as well
as the need for cooperation with
other players to enable business-
to-business services. A major
facilitator of such cooperation
will be a standard platform—such
as the open-source, in-vehicle
infotainment development
platform favored by the GENIVI
Alliance—that enables third-party
providers of services to develop
their own vertical applications.
Ultimately, what’s needed is
a consistent solution among
automobile manufacturers,
technology providers, telco
companies, and content providers
that provides the functionality and
user experience that customers
have come to expect—and
demand—from their mobile
devices. Even if that device parks
in their garage instead of in their
purse or briefcase.

17
As of May 2014, the company has
had its employees driving the cars
on the freeway and most recently
on the streets around Google’s
headquarters in Mountain View,
California, where the cars have
racked up a total of 700,000 miles.
Chris Urmson, director of Google’s
self-driving car concept outlines
on Google’s official blog how city
driving is more complex and how
they have improved the software
so it can detect hundreds of
distinct objects simultaneously—
pedestrians, buses, a stop sign
held up by a crossing guard,
or a cyclist making gestures
that indicate a possible turn.4
While the Google self-driving
cars until recently were occupied
by employees, the company
has begun testing two-seat
prototypes with no steering
wheel, accelerator pedal, or brake
pedal. While the only driver
controls are a red button for
panic stops and a start button.
Since 2009, Google has been trying out a fleet of driverless automobiles.
Google’s self-driving car—Is the future already
in your rear view?
4
The latest chapter for the self-driving car: mastering city street driving, Google Official Blog, May 28 2014. http://googleblog.blogspot.fi/2014/04/the-latest-chapter-for-self-driving-car.html

18
Google plans to build a fleet of
these prototype electric vehicles
that can be summoned via a
smartphone app. Their top speed
is 25 miles per hour, with a range
of about 100 miles and it’s a sign
driverless cars are a step closer
to transforming transportation.5
In the next few decades, self-
driving cars are expected to
become more mainstream as
both consumers and regulators
become comfortable with
their use on the road.
By 2030, autonomous-driving-
capable vehicles will represent
approximately 25 percent of the
passenger vehicle population
in use in mature markets.6
5
Can Google Keep Its Self-Driving Car From Re-Igniting More Suburban Sprawl?, ClimateProgress, May 30, 2014. http://thinkprogress.org/climate/2014/05/30/3442311/self-driving-sprawl/
6
Maverick Research: Crashing Industries and Our Societal Beliefs — The Real Implications of the Autonomous Vehicle, Gartner, Published: 3 October 2014

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Contents | Cover
October 2014 | 14-4643

The Connected Vehicle: Viewing the Road Ahead

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