The Connected Car
Finding the Intersection of Opportunity
and Consumer Demand
OVERVIEW
Like many industries springing up around the Internet of Things (IoT), the
connected car is increasingly finding its way into everyday life. Cars have evolved
from mechanical-only hardware devices to essentially mobile computers complete
with Bluetooth, vehicle specific data flow, and Wi-Fi connectivity. The transition
is transforming the car market and creating a new ecosystem. For the first time,
original equipment manufacturers (OEMs), in this case car makers, are faced with
the question of how to best leverage the developer market.
Should a brand open up to the third-party developer market, offering a set
of APIs available for public consumption? Should strategic partnerships be
prioritized as the most effective means of bringing new quality services to
market? Or should development remain strictly closed off from the outside world
leaving the creation of new application and services exclusively in house? Factor
in the question of which mobile development platforms to pursue, and the overall
market becomes increasingly complex.
This whitepaper addresses how the broad ecosystem involving OEM and
developer interests can align with consumer demands. It examines prominent
OEM strategies for approaching the connected car market and developer
community, and using survey data, suggests how OEMs can best engage
developers and consumers to capture this forthcoming mega-million market.
WHITEPAPER | 2
DEFINING THE CONNECTED CAR
First, what is a connected car? With so many parties involved, the concept is still
in flux. Is it a car that registers vehicle-specific data flow? Does it have to be Wi-Fi
connected? Where does autonomous driving fit in?
On face value, the definition appears relatively intuitive: “A vehicle capable
of sharing and/or receiving information.” While that description may be true,
it’s probably too broad for the average consumer: Since 1996 when onboard
diagnostic (OBD) ports became federally required, any vehicle connected with
the right piece of equipment can share vehicle-specific data. Even a ’98 Jeep
(base model without aftermarket modifications) might be considered a connected
car using the “sharing and/or receiving information” definition.
For the purposes of this document, the term “connected car” describes
vehicles that use some form of cellular/network connection to interact with the
environment and passengers. The source of this connectivity is irrelevant; cars
that use embedded connection capabilities, or that support an auxiliary cellular
device such as a smart phone for service, are considered equally connected.
KEY TERMS
Connected Car
A vehicle capable of exchanging data, including for occupant communication,
using either an embedded or a tethered cellular/network connection.
Embedded Connectivity
Any connected vehicle in which the means of network connection is provided
via the vehicle itself. Over the years this connectivity has evolved from vehicles
sending and receiving data via an Internet connection to cars now serving as
Wi-Fi hotspots for occupants who can use the network connection to power apps
and media on their smart devices. Generally speaking, embedded connectivity
often enables more machine-to-machine (M2M) opportunities.
Tethered Connection
Connection via either mobile phone or cellular hotspot device, which is often
criticized for its high level of data consumption (relative to cellular data plans).
OBD Port
The on-board diagnostic system (including the requisite socket or plug) that
enables vehicle-specific reporting capabilities. OBD capabilities were developed
in the early 80s but it was not until 1996 that federal mandates required all
manufactured vehicles to include OBD ports. Though the port enables relaying of
information, thereby allowing the car to interact with the outside environment, it
does so without network connectivity, and therefore does not meet the modern
definition of a connected vehicle (or component).
Infotainment System
A factory original or aftermarket console system that uses some form of
connectivity to provide drivers and passengers with vehicle specific information,
navigation, and standalone or integrated applications and/or multimedia
entertainment including audio and video.
Vehicle Relationship Management
The practice of using vehicle specific diagnostic data for routine or unexpected
maintenance. The connection varies from the OBD model in that data is relayed
via a network, not a port.
WHITEPAPER | 3
MARKET OUTLOOK
The overall connected car market is vast, with varying estimates putting hundreds
of millions of connected cars on the road by 2020. Gartner estimates 250 million
by 20201; IHS Automotive, 152 million2; Business Insider, 220 million within five
years3. And with this growth comes massive increases in revenue. PWC projects
revenue from connected non-commercial vehicles to quadruple over the next five
years4. Whatever the estimate, the point is clear: The connected car market is
massive and poised for growth. It is no surprise that most of the major car makers
are getting involved through a varied set of strategies.
Rather expectedly, the major brands are undertaking very different approaches
to the connected car and to engaging the developer community. Some opt
for open public consumption (albeit with reasonable restrictions), while others
pursue the more traditional model of strategic partnerships as a means of
retaining greater control. There are of course pros and cons to any of these
methodologies, here examined by company:
FORD
Ford is often credited as one of the early entrants into the connected car market
with its Sync platform. Originally released in 2007, the first generation ran on the
Microsoft Windows Embedded Automotive operating system. Ford shifted this
strategy in the second generation, developing on the Blackberry QNX platform.
The company recently announced it will double back and use the Microsoft Azure
platform for Sync 3. This latest update will first roll out to Ford’s Fiesta and
Escape vehicles with additional models to follow.
Throughout its lifespan the Sync platform tapped into the third-party developer
community for help with applications and services. The program offers a suite
of APIs and SDKs that developers can use for building mobile apps for the Sync
Applink interface. Ford emphasizes development of hands-free applications
reliant on voice command. In addition to the APIs and SDKs, it offers an emulator
so developers can get a feel for their application in the Applink digital interface.
BMW
Unlike Ford’s relationship with third-party developers, BMW takes a more
conservative approach, opting for a strategic partnership strategy with its
connected car platform, ConnectedDrive. The company has said its reasoning
stems from the desire to maintain a high caliber user experience in its iDrive
system. This approach has allowed BMW to focus partnership and subsequent
app development on big name partners such as Facebook, GoPro, Pandora,
Spotify, and Twitter. Like the second generation of the Ford Sync system, BMW
ConnectedDrive is powered by Blackberry QNX.
1 Burt, Jeffrey. Connected Car Market to Reach 250 Million Vehicles by 2020: Gartner. January 27, 2015.
2 Fong, Marla. Driving A Trend: Redifing The Connected Car. IHS Automotive. April 5, 2015. http://techdrive.
co/driving-a-trend-redefining-the-connected-car/.
3 Greenough, John. The ‘connected car’ is creating a massive new business opportunity for auto, tech, and
telecom companies. Business Insider. March 11, 2015.
4 Viereckl, Richard, Jörg Assmann, and Christian Radüge. In The Fast Lane, The bright future of connected
cars. PWC. Chicago, IL, February 3, 2014.
WHITEPAPER | 4
GENERAL MOTORS
GM is taking yet another approach, opting for Apple CarPlay for some of its
brands. For example, Chevrolet plans on rolling out CarPlay enabled vehicles in 14
of its 2016 models. These vehicles will also be Android Auto ready, so users will
not be limited by their choice of smartphone.
Like Ford, GM has opened up its developer program to the external community.
As part of its offering, it is serving up APIs for some of its core OnStar features
as well as its RemoteLink service. RemoteLink allows direct vehicle interaction
such as locking and unlocking doors, turning lights on/off, and registering vehicle
location and speed. Access to these APIs requires review and approval by the GM
developer program team.
Notably, Chevy enables its vehicles with Wi-Fi hotspots, and in these new
vehicles users will be able to choose between connectivity through their carrier
or through the Chevrolet OnStar 4G LTE plans that generate Wi-Fi hotspots. For
those with an AT&T data family share plan, the car can be added for a monthly
fee just like any other smart device. The advantage of offering both connectivity
models (embedded and tethered) is that users can interact with the vehicle even
when they aren’t near it.
AUDI
Audi has been noted for its relatively early adoption of Android Auto. At the
2015 Google/IO, it was announced that new Audi models would implement
indirect controls of the Android Auto interface. Instead of relying on touchscreen
navigation as many other implementations do, new Audi models will use manual
controls (often located on the center console) to navigate notifications and
applications. The connected car infotainment experience for Audi, like Chevrolet,
offers an embedded connectivity model with AT&T powering a Wi-Fi connection.
Its connected car experience is powered by the QNX operating system.
MARKET SURVEYS
METHODOLOGY
As part of this analysis, TIBCO conducted two surveys polling members of the
TIBCO Mashery® Developer Network and general consumers. The goal was an
understanding of each groups’ familiarity and interest in the connected car. A
comparison determined how well aligned these two segments are and the sort of
opportunities provided to OEMs.
STATISTICAL HIGHLIGHTS
Part of the results are presented below.
Consumer Survey
Which is the most “connected” connected car manufacturer?
• Ford: 28%
• GM: 13%
• BMW: 21%
• Mercedes and Audi: ~10% each
Which do you see as the most innovative party in the connected space?
• Google: 45%
• Apple: 15%
• Car Manufacturers: 15%
WHITEPAPER | 5
Which components of the connected car are you most excited to see/use?
(Respondents could select multiple options)
• Media/Entertainment: 53%
• Navigation Services: 63%
• IoT Sensors: 37%
• Safety Information: 38%
• Vehicle Specific Data: 42%
Should car manufacturers focus on more traditional differentiators other
than connectivity?
• No: 14%
• Yes: 86%
Are you concerned with hacking/security?
• Yes: 72%
Mashery Developer Network Survey
Which do you think is the most “connected” connected car manufacturer?
• Ford: 36%
• GM: 8%
• BMW: 22%
When thinking about/developing for connected cars what are the biggest
challenges you face?
• Access to demo car: 8%
• Simulating real world environments: 33%
• Lack of dev tools/SDKs/docs etc: 11%
• Difficult onboarding process (to OEM platforms): 17%
Which do you see as the most restrictive party in the app approval process?
• Apple: 39%
• Car manufacturers: 47%
How familiar are you with the guidelines for what you are allowed to build/develop
for connected cars?
• Somewhat: 25%
• Unfamiliar: 53%
Which components of connected cars are you most excited for?
• IoT sensors: 47%
• Vehicle specific data: 19%
WHITEPAPER | 6
ANALYSIS AND RECOMMENDATIONS
Where is the opportunity? What do consumers expect from car manufacturers?
Which types of developers are best suited to address their wishes? And what
does it mean for OEMs?
Given consumers’ expectations, concerns, and desires, taking a hybrid
approach to developer engagement could very well be the best course of action.
There are a number of reasons for this assessment:
Consumers Want Specific Features
Consumers want to see connected cars in the market. In fact, a TIBCO Mashery
survey found that less than 5% of respondents had no intention of owning or
using a connected vehicle, and a report from Park Associates indicates that 78%
of connected car owners will want connected features in their next vehicles5.
Consumers are excited about certain features more than others. In the survey
cited above, 63% were excited about the navigation/location services, and 48%
were excited about possible media and entertainment features. With over 70%
saying that hacking and security are concerns, the role of third-party developers
becomes clearer.
Navigation Features Are Prime Targets
Consumers are already accustomed to allowing access to their location,
particularly for navigation. A study conducted by the Pew Research Center found
that 74% of adult smartphone users enable location services for navigation,6 and
30% use location tagging in their social media posts. APIs focused on these two
areas could be used to engage third-party developers, spur innovation, and build
a richer consumer experience that can meet growing demand.
Consumers Want Connectivity as a Commodity
What about the choice between CarPlay and Android Auto or an open vs. a
closed OEM platform? Some automakers have elected to forgo integration with
Silicon Valley powerhouses, citing the importance of control. But is that what
consumers want?
Over half the respondents in the TIBCO Mashery survey credited Apple and
Google with doing a better job of innovating the connected car, and less than
15% thought OEMs should focus on connectivity as a brand differentiator. Instead,
respondents said they wanted manufacturers to focus on more traditional features
like performance, fuel economy, and safety. Consumers seem to just want their
connected car experience to work, to plug in their phone, whether iOS or Android,
and have it connect seamlessly. Increasingly, connectivity is being viewed as a
commodity, not a differentiator. So, taking a more inclusive approach to connectivitybased features appears to be a better way to meet consumer expectations.
5 Park Associates. 78% of Connected Car Owners Will Demand Connected Features in Their Next Vehicle.
www.marketwatch.com. July 29, 2014.
6 Zickuhr, Kathryn. Location-Based Services. Pew Research Center. September 12, 2013. http://www.pewinternet.org/2013/09/12/location-based-services/ (accessed June 25, 2015).
WHITEPAPER | 7
Security Is a Concern
Despite its enthusiasm for connected vehicles, the general public still has
reservations about security. This sentiment has been reflected in TIBCO Mashery
polls as well as those run by the public sector. Massachusetts Senator Ed Markey’s
report from February of 2015, Tracking & Hacking: Security & Privacy Gaps Put
American Drivers at Risk7 is notable. Among the primary concerns revealed by this
report was the lack of standardized OEM controls for preventing access to vehicle
electronics (sensors).
Security, the IoT, and Innovation Are Opportunities
The Mashery Developer Network Connected Car Survey found that connected
vehicle developers are most excited about leveraging IoT sensors, which conflicts
with consumer interests as documented in the Markey report. However, offering
IoT related APIs strictly to trusted partners could be a safe and effective way
of giving developers, consumers, and OEMs what they want. This model would
require thorough partner vetting, probably best initiated with those having longstanding OEM business relationships.
An additional OEM tactic might be decoupling infotainment services
from vehicle specific functions. This approach, offering services like media/
entertainment and navigation at low security risk, opens the possibility of new
innovative third-party services while keeping vehicle functions in house. OEMs
can meet consumer demand while sidestepping the market’s major concerns.
7 Markey, Edward. Tracking & Hacking: Security & Privacy Gaps Put American Drivers at Risk. www.markey.
senate.gov. February 1, 2015.
Global Headquarters
3307 Hillview Avenue
Palo Alto, CA 94304
+1 650-846-1000 TEL
+1 800-420-8450
+1 650-846-1005 FAX
www.tibco.com
TIBCO Software empowers executives, developers, and business users with Fast Data solutions that make the
right data available in real time for faster answers, better decisions, and smarter action. Over the past 15 years,
thousands of businesses across the globe have relied on TIBCO technology to integrate their applications and
ecosystems, analyze their data, and create real-time solutions. Learn how TIBCO turns data—big or small—into
differentiation at www.tibco.com.
©2016, TIBCO Software Inc. All rights reserved. TIBCO and the TIBCO logo, and Mashery are trademarks or registered trademarks of TIBCO Software Inc. or its
subsidiaries in the United States and/or other countries. All other product and company names and marks in this document are the property of their respective
owners and mentioned for identification purposes only.
01/19/16