Matt Dirks, a senior client partner at Acquity Group (part of Accenture Group), says the 4G-enabled car could usher in an age of more data-driven analytics. Insurance companies will better tap into opt-in data for "good driver" discounts without relying on aftermarket add-ons, he says, while car dealers could provide a "smart reception" service that works like a virtual concierge for new customers.
'Legacy' Cars, Compatibility, Pricing Will Present (Familiar) Challenges
Of course, of the biggest challenges the auto industry faces when it comes to connected cars concerns adoption levels. The problem is all too familiar to IT execs: There are millions of "legacy" cars on the road, and none will be able to connect to that new 2016 BMW X1.
Twist says IT professionals will have to rise to the challenge and figure out how to make after-market systems, such as those from Delphi and OnStar, work with the latest 4G-enabled systems in newer cars. For example, for a video chat between cars, IT might need to develop standards for the connection and video format that works across multiple cellular carriers and car systems.
Compatibility issues could also arise. Lhamon says automakers will be the stakeholders in setting the overall vision. Ultimately, the in-car system has to meet the needs of the driver. Added to that, he says, wireless carriers will have to lead the charge on making sure the connection is fast and robust. Hardware suppliers such as Continental, Harman International, Parrot and Denso face compatibility issues between car makes and models, as do the telematics and cloud service providers such as IBM, Cisco Systems, Agero and Airbiquity.
"The cellular-embedded module used in a car must meet automotive-grade standards, which have higher requirements than embedded modules for most consumer devices," Lhamon says. "Auto-embedded modules are certified for operation in harsh and 'mission-critical' environments, requiring stringent compliance for operating temperature and reliability, among others."
Amrit Vivekanand, a spokesman for the semiconductor company Renesas Electronics America, says pricing presents another challenge. This is another issue familiar to IT execs: Setting costs for services. Today, many automakers provide 3G and Wi-Fi service free of charge for the first year or two of ownership. OnStar currently costs $29.90 per month for a concierge service, directions and automatic 911 calls. 4G services could include HD video streaming, video phone calls, route-sharing with other drivers and much more.
"The primary roadblocks for 4G LTE in the North American automotive market are licensing with mobile operator partners," Vivekanand says, using contracts with car companies as an example, "and determining a pricing model that's attractive to consumers as well as the OEMs and mobile operators."
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