Today's Connected Smart Cars
In the last several years, connected cars have exploded thanks to the IoT. Currently, automakers are connecting their vehicles in two ways: embedded and tethered. Embedded cars use a built-in antenna and chipset, while tethered connections use hardware to allow drivers to connect to their cars via their smartphones.
Furthermore, app integration is becoming commonplace in today's vehicles. Google Maps and other navigation tools have begun to replace built-in GPS systems. Apps such as GasBuddy show the driver where he or she can find the cheapest fuel in their area. Music apps such as Spotify remove the need for traditional or even satellite radio.
Perhaps the most significant example of the transformation of the automobile today is part two of Tesla's "master plan," as outlined by CEO Elon Musk. The electric car giant plans to create solar roofs with integrated battery storage, create self-driving car technology that is "ten times safer" than manual driving, and implement car sharing, which would allow Tesla owners to earn money by lending out their cars.
Speaking of self-driving cars, BI Intelligence expects this to be the next wave of innovation in the IoT in transportation. And that change has already begun.
Step one was stop and go autopilot, which allows cars to drive themselves in traffic jams by analyzing the lane ahead of them and moving appropriately. Step two was the remote valet assistant, the ability to actually summon a car in a small space (such as a parking garage) through a smartphone, smartwatch, or key fob. Step three was highway autopilot with lane changing, which included blind spot technology to shift lanes.
Now, we're starting to get into the truly exciting stage. Step four is cars that require a driver behind the wheel, but have an option for the driver to push a button to let the car drive itself. Step five will be totally driverless vehicles that do not require a driver behind the wheel, or even a steering wheel at all. BI Intelligence expects these cars to hit the market after 2020.
How IoT Will Make Smart Cars Even More Connected
Automakers are ramping up their connected car efforts for several reasons. Internet connectivity in vehicles allows car companies to release software updates in real time, which is extremely important during a recall.
Second, automotive companies can use data from the car to analyze its performance and obtain valuable data on how drivers use their cars. Finally, more connectivity provides more ways for automakers to cross-sell their products and services to customers.
So which automotive companies are leading the pack in this connected car push? There is no clear winner, but several companies are setting the tone. BMW is the champion, according to a KPMG survey of 200 automotive executives. Daimler, General Motors, Toyota, and Tesla are also near the top of the list.
As far as tech companies, AT&T is a prime example. The telecommunications giant added 2.7 million connected cars in the U.S. in the first three quarters of 2015. But Microsoft, Apple, Pandora, Sprint, Google, and other tech heavyweights are all throwing their considerable muscle behind connected cars.
And all of this effort will not go unnoticed or unappreciated by consumers. A recent Google survey found that 30% of U.S. smartphone users get "anxious" without their smartphone on them, and 68% check their smartphones within 15 minutes after waking up in the morning. Connected cars allow people to stay connected more frequently and remove that anxiety.
The government is also cracking down on texting while driving, a problem that connected cars would solve by letting drivers keep their hands on the wheel and their eyes on the road even as they communicate with others.
Consumer interest in the connected car is growing, and that will rapidly translate into dollars. Approximately 62% of U.S. consumers were aware of the term "connected car" in a recent AT&T and Ericsson survey. And Google Trends shows the term "connected car" is reaching new highs every month. As a result, estimates say in-car infotainment centers will generate $15 billion in sales in 2021, up from $7 billion in 2016.
The Internet of Things will become increasingly important in transportation and logistics in the next several years, especially as self-driving cars hit the road in increasing numbers. But this is just one area that the IoT will totally transform.