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Connected car takes OEM, IT rivalry higher

Posted: 01 Sep 2014     Print Version  Bookmark and Share

Keywords:PwC  strategy&  OEM  connected car  infotainment 

As one of the most hyped terms in the car industry, the concept of the 'connected car' does indeed offer significant value and impact to consumers. As to the specifics of the applications, a study jointly developed from PwC and strategy& (this is no typo, the consulting company formerly known as Booz & Company really chose this somewhat unusual name) revealed that it is completely unclear who will be the winners.

Between 2015 and 2020, the total available market of networked mobility will almost quadruple, from 31.9 billion to 115 billion, noted the report. The main drivers in this huge market are safety and autonomous driving. While the segment safety in 2015 will amount to a mere 12.2 billion, products related to safety in the connected car context will be worth 47.4 billion. Likewise, autonomous driving - or better, its preparing efforts and technologies, will represent a value of 7.5 billion in 2015 with growth expectations to 35.7 billion by 2020. Other strong contributing sectors are infotainment (13.2 billion), comfort (7.1 billion and vehicle management (6.7 billion). And these are only the figures for the passenger car market; commercial vehicles were not subject of the study. This market analysis got granular on mobility management, vehicle management, infotainment, well-being, autonomous driving, safety as well as home integration, a field that is relatively new and refers to functions that connect the vehicle with the home and the office, thus creating holistic solutions.

The vehicle increasingly communicates with its environment, with fellow vehicles and with the driver's home, said Richard Viereckl, who oversees strategy&'s international automotive segment. "This creates enormous growth potential to OEMs."

But not only for automotive OEMs. While the carmakers regard mobility as their home turf, the information technologies required to implement applications like autonomous driving or active driving safety in an increasingly complex traffic environment is dominated by a players in digital electronics and software. Thus, the IT will be the competitive battlefield of technology developments around the connected car. Stefan Bratzel from the Centre of Automotive Management expects an interesting development. "The automotive OEMs will continue to regard the connected car as their very own sphere of activity and strive to occupy strategic control points. However, who intends to successfully implement digital business models without running the danger to offer unattractive isolated solutions, need to find ways to collaborate with the digital players. The catchword in this context will be coopetition," Bratzel said. As a logical consequence, standards will be established at multiple places in the digital automotive ecosystem, since players in the realm of digital technology will find proprietary solutions rather uninteresting. One field where this competition has erupted with particular intensity is the contrast between the design and product life cycles in consumer electronics and automotive industry, in the consumer electronics world, new designs hit the market in monthly intervals while in the automotive industry it still takes several years to bring a car to the market.

The crucial point for this future industry is data safety and security. The study identifies three fundamental weak points of the connected car: First, the connectivity opens a door for hacker attacks who potentially could intercept and/or manipulate the data stream between vehicle and backend. Second, vehicle-based interfaces, for instance for mobile phones or tablets, represent a very significant attack target. In addition, the experts expressed concerns that the connected car could involuntarily get under remote control, be converted to a botnet and attack servers anywhere in the world. And vice versa: The car itself can be target of the attack, with fatal consequences. The spectrum of the possibilities ranges from manipulating brakes or remotely opening the doors to creating motion profiles of the driver, drastically violating its privacy. "Against this background, data security is a very central mission for all research and development activities aiming at implementing the connected car", said Felix Kuhnert, PwC partner and head of the automotive business segment.

Data security however is another field where the digital players have an edge over the incumbent automotive OEMs. Thus, a large number of far-reaching developments is foreseeable. After all, none of the competing parties in the market is inclined to cut back -after all, individual mobility is a basic need of mankind und thus one of the most fundamental marketplaces. "Who takes the foot of the gas pedal has already lost," noted Viereckl.

- Christoph Hammerschmidt
  EE Times Europe

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