Although forecasts of the potential of the connected vehicles have become common, perhaps 2014 will be remembered as the year that the technology reached a tipping point toward the optimization of technologies, features and services associated with the emerging trend. And the reason for this is money.
We already know that consumer demand for connectivity in a vehicle is high – even faced with headwinds such as data security and personal privacy concerns and research showing that consumers are generally not willing to spend additional money for it. This creates a real challenge for automakers in defining how they will approach their respective connected car programs, given that the growth trajectory points toward even more connectivity demand and capital investment
McKinsey and Company just released yet another study, this one predicting that the revenue generated by connected car technology across multiple industries will grow to more than $230 billion by 2020. With automakers competing directly with tech industry players for a share of the pie, winners and losers could likely be determined by who is first across the technology development finish line.
Getting past the various legal hurdles associated with connected vehicles might prove to be easier than establishing connected vehicle platforms in a way that captures all or a portion of the projected revenue from big data analysis, connected services and cloud-based features. In the meantime, consumers will benefit greatly by this healthy disruptive business environment between the auto and tech industries and will soon enjoy a massive convergence of hardware, software and connectivity in their driving experience that was not possible only a few years back.
But consumer benefits aside, we are anxiously watching how the auto and tech industries size each other up and if there will be a collaborative atmosphere in developing connected car technologies. When technology takes the wheel, the industry with strategic vision will be the one that drive revenue and reaps the profits.
Source: Technology Takes The Wheel – New York Times