Vehicle-to-infrastructure connectivity will help automotive commerce grow.
Before we have cars that drive themselves, we will have cars that talk to each other.
The timescale of the future of fully autonomous automobiles is something of a debate among technologists. Some people believe that we will have fully autonomous, level five self-driving cars within the next five years. Others, myself included, realize that such a massive upheaval in infrastructure and transportation is a pipe dream. Even if the technology is ready (and that is a big if), the adoption and acceptance of self-driving cars will be a process decades in the making.
In the shorter term, the gradual roll out of semi-autonomous features and connected vehicle features will be the driving technology within the car. Revenue in this area will be rising for vehicle manufacturers and service providers. According to Juniper Research, revenue from consumer connected car services will rise to $49.2 billion by 2022, a 21.6% compound annual growth rate from expected revenue of $18.4 billion in 2017.
Juniper predicts that 50% of consumer vehicles on the road will have at least one connectivity service by 2022. Connectivity services include connected telematics, vehicle-to-vehicle (V2V) or vehicle-to-everything (V2X) communications or connected commerce services (like your car paying for gas, tolls or parking automatically).
Vehicle To Everything: Near Term Opportunities For Connected Cars
Revenue opportunities in the connected car ecosystem spread across a variety of functions. The gradual introduction of autonomous car features (vehicle-to-vehicle) like lane assist, emergency breaking and rear end collision avoidance is currently an important technological step for manufacturers.
Vehicle-to-person (V2P) services like smartphone notifications, public transportation information and safety alerts will matter to software developers and service providers. Vehicle-to-device (V2D) such as smart OBD II ports, smartphone applications and Wi-Fi integration will continue the evolution and adoption tracts these technologies have already been on for several years.
Vehicle-to-home services, such as smart home integration will present an opportunity to tie multiple market segments to each other.
The most robust set of problems and opportunities in the connected car ecosystem reside in vehicle-to-infrastructure. It’s a two-sided problem, one where the weight of innovation comes down more on the side of infrastructure than in the car.
Vehicle-to-infrastructure connectivity opportunities are present in emergency services, safe driving data (for insurance), weather alerts, road condition updates, traffic data, optimized navigation (think Waze), smart city integration and commerce opportunities.
Commerce, connectivity and infotainment are probably the three biggest near-term opportunities in the connected car. Juniper Research says that connected car commerce consumer spend will be over $100 billion in 2022. The types of commerce coming from cars will be items like fuel, toll and parking payments.
North America will take 39% of the revenue generated by the connected car ecosystem in 2022, according to Juniper.
Did you know? Applause works with automobile manufacturers and service providers to help achieve the best in-car experience for consumers. See how Applause can help the automotive industry achieve the best quality experience here.