Why OEMs Need To Incorporate IoT Into Their Dashboards

September 30, 2015  |  By Michael O'Shea  |       

The number of cars worldwide connected to the Internet will grow more than sixfold to 152 million in 2020, up from 23 million in 2013, according to IHS Automotive. At the same time, Gartner estimates the Internet of Things (IoT), the machine-to-machine connection of which cars are a large part, will grow from 4.9 billion “things” in 2015 to 25 billion by 2020.

These increases can be attributed largely to customer demand; today, people want to stay connected to their digital lives wherever they are. As a result, in-vehicle technology has become the top selling point for 39 percent of auto buyers, according to a survey cited by Bloomberg. And that’s why OEMs must work to incorporate IoT into the dashboards of their vehicles.

Here are the major benefits of implementing IoT in your models:

Profit Potential

There’s more profit to be made from connected cars than just the original purchase of the vehicle’s high-tech features. According to Automotive News, by 2017 a quarter of all OEMs will earn money from the e-commerce transactions drivers make from the car. These purchases may include songs, audiobooks, and movies from content providers who leverage the connected car platform to monetize their services.

As Thilo Koslowski, auto analyst for researcher Gartner Inc., says in the AN article, “The automakers can take a cut of these transactions because this is their device platform.” However, that cut is at stake if technology companies take the lead in connected car dashboards. That’s why it’s imperative for OEMs to define the terms of IoT in their connected cars as soon as possible.

Differentiation in the Marketplace

As vehicle quality continues to increase, even in today’s most inexpensive models, OEMs must find new ways to distinguish their brands. Incorporating IoT is an ideal way to do this. Rather than using a generic interface for consumers to plug in their smartphones, automakers should leverage IoT to provide a streamlined infotainment experience. This may include mobile hotspot capabilities, 4G connectivity, apps that appeal to a specific customer demographic, real-time route optimization based on traffic patterns, and more.

Take Ford’s SYNC® system, for example. Using voice-activated technology, drivers can make calls, play music, select apps, and more. Most Ford vehicles sold are equipped with SYNC, and Ford has credited the system for bringing car buyers to its showrooms. In effect, connected car services like SYNC can actually win over buyers who previously may not have considered a specific auto brand.

Customer Loyalty

Along the same lines, a good IoT platform can engender customer loyalty. Today’s consumers see connectivity as a top priority, and they’ll be likely to stick with a brand that makes that connectivity easy and seamless. Safety is also an important factor that IoT can greatly enhance. While consumers may not realize its importance during the car buying process, they’ll certainly appreciate advanced safety features when they need them the most.

For example, with IoT, OEMs can provide a range of possibly life-saving benefits in the event of an accident, such as automatic crash notification for emergency services. Another example is an IoT-dependent system like Subaru EyeSight®, which actively aids in crash prevention. Once customers see the vital benefits of these features, they won’t want to be without them.

Valuable Connections

Once IoT is incorporated into a vehicle, that vehicle becomes part of a much broader network: the Internet of Things. All of these “things” – from smart home devices like the Nest thermostat to personal devices like the Apple Watch – can talk to one another, opening up a host of new experiences for customers.

Automatic and Zubie have already jumped in with aftermarket devices to bring IoT-enabled cars into the installed base. These devices empower drivers with the knowledge to make their cars safer and drive smarter. In some cases, they also allow the connected car to become part of the “If This, Then That” (IFTTT) recipe, which automatically triggers specific events (for example, texting or calling your spouse when you’re leaving work). It’s not too late for OEMs to take control of this new market by building these capabilities directly into their vehicles.

Reduced Service Costs

A final benefit of incorporating IoT is the ability to provide over-the-air (OTA) software updates in cars. This keeps the automaker apprised of the vehicle’s maintenance status without the customer having to visit the dealership. When connected cars are recalled due to software glitches, for example, OTA updates can save both OEMs and car owners a lot of time and money.

According to TechCrunch, “OTA updates are slowly becoming an industry standard -- Chrysler Uconnect, Mercedes-Benz mbrace, BMW ConnectedDrive and the Toyota Entune systems regularly send firmware OTA updates to fix software glitches in their vehicles.”

All of these types of benefits can and will help make IoT more mainstream and take the connected car platform to the same level as our phones and computers. And with what’s to come, there’s no turning back.

What other features do you see OEMs incorporating into their connected car dashboards?

Topics: IoT

Michael O'Shea

Michael O’Shea is the Founder and CEO of Abalta Technologies. He is responsible for all aspects of executive management of Abalta and a direct participant in many client engagements, particularly in management advisory projects.

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