Connected car: for whom will a deal be?


The connected car, the car connected to the Internet, could be the new smartphone, at least in the expectations of motorists and companies: for the former in terms of functionality and services, for the latter in terms of earnings.

And indeed the statistics seem to confirm it: at the beginning of 2016, for the first time, the number of new smart cars registered in the United States exceeded the number of new smartphones sold.

More and more smart car traffic. This figure explains the growing interest in the sector by telephone operators: AT&T, one of the largest telephone companies in the States, can already count on as many as 8 million cars connected to its network. That together with the other devices of the Internet of Things (sensors, appliances, cameras, etc: we explain it here) has allowed the company to earn over 1 billion dollars in data traffic alone in 2015.

And another interesting number concerns the overall growth of data traffic worldwide: according to Cisco, between 2014 and 2015 it grew by 74% and in the last 10 years it has multiplied 4000 times.

Today the biggest bandwidth consumers are mobile phones, thanks to which we are always connected to the Internet to update social networks, publish photos, play games, watch videos. And second place could soon be cars.

How do I update your car? In fact, most modern cars are equipped with over 150 different electronic systems controlled by as many microprocessors: from navigation to entertainment, from active safety to engine management, from ABS to air conditioning.

In short, the car is virtualizing and the automotive companies, Tesla first, are beginning to rethink it by designing hardware and software as a single entity.

What we can expect for the next few years is an evolution of the car, in terms of product, very similar to that of smartphones: hardware and software on board will tend to have ever shorter life cycles, whose duration will be dictated by the new versions of the operating systems that manage the car.

The same Tesla updates the software of its cars via the Internet just like those of mobile phones. The only difference with smartphones is that the update is not optional, but the new version of the software is available as soon as it is available.

Who pays? From the consumer's point of view, all this means that the connected car will present an additional recurring expense item in addition to fuel, road tax and insurance: connectivity.

The car will then become one with the smartphone and in many cases will replace it: not only to call while we are traveling or to consult maps, but also to pay, to listen to music, to play games or watch a movie while the autonomous driving system takes us to the destination.

Who benefits from it. And how. All this opens up endless possibilities for companies to gain: telephone operators, content providers and the advertising market. But also different possible business models: from the more traditional ones to consumption (I pay for a service, for example the maps, if and when I use it), to the freemium to Spotify (listening to music for free in exchange for advertising, but I can pay for a better quality service and without commercials) to those completely free of charge at Google.

The latter, however, reserve the right to acquire and use our “automobilisitci” data (where I go, when, how I drive, etc.) to do commercial operations themselves.

They could, for example, decide to sell the data of virtuous motorists to insurance companies to encourage them to take out policies with advantageous figures and penalize equally reckless ones, perhaps by offering them supplementary insurance against accidents: the evolution of behavioral advertising on four wheels we talked about some time ago.

According to Gartner, there will be over 250 million connected cars in circulation by 2020: in the coming years we must therefore expect the birth of unprecedented industrial alliances between car manufacturers, telecommunications companies and big online, just as happened with mobile phones.