CB Insights

The electronic highway: How ‘connected cars’ will change driving

From transmitting data on how you drive and making your car an Internet hotspot, new cars are becoming truly intelligent

BMW's connected car dashboard

BMW’s connected car dashboard

When the 2015 cars hit showroom floors this year, some buyers will be looking at features the likes of which no one’s seen before. The Audi A5, for example, has a seven-inch screen that emerges from a slot on the dashboard. It will use a 4G wireless modem built into the car itself to connect to the Internet, navigate Google Maps, surf Facebook, and offer a Wi-Fi hotspot for people in the car.

Shoppers considering the 2015 Hyundai Sonata will find themselves looking at a model with CarPlay, a new technology from Apple. When they plug an iPhone into the dashboard, the whole car will essentially become a smartphone on wheels, using the phone’s 4G connection to connect to the Internet, showing car-enabled iPhone apps on the car’s touch-screen interface, and using Siri to accept voice commands.

The connected car is here, but like any emerging technology, it’s arriving in the form of an all-out melee among automakers and technology giants, all fighting over just how the connected car should work.

“There are two ways to connect a car: There’s the original telemetry readings, but the new phase, now that we have 4G is infotainment devices, and the vehicle as a hotspot,” says Larry Zibrik, vice-president of Market Development at Sierra Wireless, a Vancouver-based company that’s become a global leader in the modules that allow machines to communicate over cellular networks. Their modems are used in Chrysler and Tesla cars.

Telemetry readings, also known as telematics, ­gathers information that the car’s many sensors gather about the machine itself, from tire pressure to oil heat to the speedometer. In a world of connected cars, they could help predictively maintain a car, scheduling a garage visit against its driver’s personal calendar, and making sure that the mechanic has the parts they need in stock.

Cars might also start speaking to each other: A car that notices a loss of traction from its wheels might send out an automatic alert to nearby vehicles, and their drivers, that they’re approaching slippery conditions.

Telematics can offer up business intelligence: Insurance companies like Desjardins, for instance, are offering to adjust rates for consumers who install car-monitoring devices that will analyze their driving habits. (Desjardins says it will only adjust rates downwards, a courtesy that other insurers might not provide in the future.) “What the insurance industry wants to understand is user behaviour within the vehicle,” Tony Stone, an expert in connected devices with IBM in Detroit says.

Public attention is about to be grabbed by the rapid evolution of the auto dashboard, as carmakers and tech giants work out bringing to the car the Internet experience consumers have gotten used to on their smartphones.

There are two competing ways of doing this. Some companies, like Audi and Chevrolet, are selling cars with Internet modems and touch-screen systems built in. This, of course, means paying the carmaker a subscription for Internet service, and right now, the rates are pricey. But carmakers like this approach, because it allows them to control the relationship with the Internet-surfing customer, and make their in-car Internet as a distinguishing feature of the brand.

The flipside is Apple’s approach: The Internet enters the car through the smartphone, using the customer’s existing data plan. Google is also working with a consortium of automakers to bring Android compatibility to the dashboard, although it hasn’t reached the market as quickly as Apple’s.

The technology companies are betting that consumers will prefer a standardized in-car Internet experience from one car to the next over a world in which every car’s dashboard Internet works differently. Of course, this setup lets Apple and Google be the gatekeepers to drivers’ surfing; Google is a voracious amasser of data, which it uses to market its advertising, while Apple is eager to broaden its ecosystem, to encourage people to buy more iPhones, which is where it makes its money. All the while, software developers who’d write apps for connected cars are caught in the middle.

But high-end cars with these systems built-in will only account for a fraction of the 16-odd million new cars sold every year, especially in the near-term, which is why other companies are targeting the aftermarket. Pioneer, for example, has released its first in-car radios with touch-screens that will support CarPlay. (They’re not cheap, either, ranging from $700 to $1,400.)

And firms like Mojio, a Vancouver startup whose products are in pre-market testing, is one of several firms that are targeting the vast base of cars that don’t have touchscreens at all, but whose owners would like to reap the benefits of constant connectivity. “It’s not about the connected car, it’s about the unconnected car that most people own,” says Jay Giraud, Mojio’s CEO.

Mojio is a little box that plugs into any car’s maintenance data port, beaming out information about the car’s internal state, so the driver can use smartphone apps (either supplied by Mojio, or by third parties) to do anything from monitor their car’s fuel economy to find parking spots.

“We think that this is going to dramatically advance the pace at which cars start to talk to one another—to see in blind spots, to see where there’s a traffic jam,” says Giraud. “We look at cars as being able to be a whole new layer of communication between infrastructure and society and general.”

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