Connectivity has enabled car makers to diversify their portfolios away from pure-play vehicle manufacture and into the world of the Internet of Things (IoT), where vehicles, as first demonstrated by Tesla’s Model S, can be repaired, upgraded or enhanced, by remote updates. Connectivity also lends itself to the streamlining of logistics fleet solutions through telematics, a market that is set to increase from its 2012 valuation of $120m to over $3bn by 2025.
Listed below are the key connectivity and telematics trends impacting the connected car theme, as identified by GlobalData.
Connectivity and telematics trends
More responsibility or a new revenue stream
Partnerships with mobile network operators (MNOs) have broadened the scope of the contractual agreements offered at point of purchase and connectivity comes with its own headaches around data privacy and protection. BMW is among the manufacturers partnering with Vodafone (UK), AT&T (US), China Unicom (China), Deutsche Telekom (Germany) to offer customers 4G data connectivity agreements, to enable additional features in its connected cars. These partnerships are strategically setting the original equipment manufacturers (OEMs) up for the commencement of the 5G roll-out too.
Cyber security continues to be a key worry when consumers are surveyed about the future of cars and autonomous mobility. The main obstacle to tackle is ‘security fatigue’, a term coined to explain the high number of ransomware payoffs by IT security managers, a figure which soared by 950% in 2019.
Malicious hackers are using artificial intelligence (AI) to their advantage and while security experts are implementing similar tactics to defend company systems, attacks are relentless.
The challenge comes in trying to offer third-party app developers access to expand fleet and consumer services. Argus Cyber Security, the market leader, was acquired by Continental in 2017 in a bid to challenge Intel. The brand has continued to thrive, releasing an Over-The-Air Update (OTA) security solution in October of the same year. BT Security, Cisco, Harman Towersec and SBD Automotive & NCC Group and a myriad of smaller players, including Altran and Capgemini continue to vie for market share across different regions.
The interdisciplinary nature of telematics has meant a proliferation of services, developed from different backgrounds. That is to say, Bosch, Continental, Masternaut (Michelin) are major players from the automotive electronics background with AT&T and Verizon leading the way for the telecommunications field. Geotab, Mix Telematics and Cisco are telematics service providers (TSPs) from the computer science field.
It is crucial to bear in mind that the telematics industry is almost as diverse as the connected car itself. Each TSP has its strengths, whether monitoring driver behaviour, or vehicle status, or configuring fleet or insurance interfaces, the key to competitive advantage is ensuring a secure system. In June 2020, Upstream Security partnered with Amazon, to offer greater security to automotive companies using AWS for their data storage.
Not only is security paramount for vehicle safety, but data protection and privacy are crucial for fostering confidence in products and services, both B2B and B2C. The ramifications of a data breach extend far beyond the reputational damage since the eco-system of the connected car relies heavily on protection from threats.
If insurers, for example, expect to see data sent directly from the vehicle in future years, then it is imperative that data is protected flawlessly, to ensure compliance with regulations, such as Europe’s General Data Protection Regulation (GDPR).
This is an edited extract from the Connected Car – Thematic Research report produced by GlobalData Thematic Research.