The App is the Future of Telematics

For a long time the biggest problem with connected mobile applications has been the ‘connected’ part.  The mobile web has existed for many years, but only since the broad adoption of 3G has a true mobile web emerged. In fact, things aren’t really even about the mobile web anymore, it’s an almost antiquated concept.  With the power of the newer generation of mobile devices and increased bandwidth the Web2.0 world is accessible on-the-go. Now the cutting edge of mobile connectivity is downloadable applications.

Every major smartphone platform (for my purposes, iPhone, Android, and WebOS) has apps that can be downloaded and installed to the phone to add functionality and value.  The iPhone app store alone is over 140,000 apps with billions of downloads.  BILLIONS with a B.  Generating an estimated $250 million in revenue per month (which Apple passes 70% of on to developers).  That’s staggering…

It’s clear the future of in car technology is the application.  As the iPhone and Android app stores continue to grow, spurred recently by the launch of the iTampon iPad (Flurry Analytics reported a 300% increase in new application development in January), users are downloading apps for every purpose you could think of.  In the car this wont be limited to just infotainment, applications also offer the opportunity to deliver a la carte safety and security options as well.

It’s pretty clear that consumers like being able to download apps and that the application store model is a viable one, yet there is no real way to download applications to your vehicle.  Ford has announced they are developing an API that will allow developers to create applications for smartphones that can be controlled through Sync system’s voice and steering wheel controls.  This method of integration is intended to take advantage of the power of the user’s existing devices (a main part of Sync’s strategy) to deliver the functionality and connectivity while the Sync system allows the user to interact with the device more safely.

This will likely be a very effective method of enabling apps for the car, but it will require any plans for a Ford app store to include support for multiple platforms, which is different from the current iPhone / Android specific model.  No doubt it can be done, but will the apps also be available through the platform specific store?  To launch it sounds like users will only be able to download apps from the app store for their respective device or OS.  I’d assume you would be able to download the same app both from Ford and from iTunes.  That would make the most sense for getting the apps into users devices.

Continental’s AutoLinQ is introducing the concept of the app store as well with a head unit that will support Android based applications.  Continental also plans to distribute an SDK that will allow developers to create automotive specific applications for the android platform. [Author's Tangent: This is possible because Android is open source and can be modified and extended legally. Check out this post about open source technology on sister site Tech to Live By.]

Mercedes-Benz’s mbrace system and OnStar both offer apps for the smartphone that allow users to interact with their car (vehicle diagnostics, door unlock, etc) remotely.  Even Popular Science recently took notice and highlighted smartphone apps enabled to control the vehicle.

None of this is a full blown app store yet, but it is on it’s way.

Previously we discussed some issues with the value proposition for telematics (and how there probably shouldn’t be any) and the revenue and customer satisfaction opportunities associated with the app store are off the charts.  By enabling others to develop for your platform you allow a few things to happen:

  • The volume of apps is far far greater than any company could develop on their own.
  • Apps are developed to address specific needs in the consumer base.
  • The only cost to the company is the management of the app store and the approval process (and the iPhone app store covers at least part of those costs with fees to developers).

I would assume at some point, there will be an open platform where a company will allow others to create their own content and not be limited to a specific system or application.  To start developers will modify existing apps to be used in the car, but over time there will be new breeds of applications that will leverage the unique environment of the car.  Apps that utilize geo locations will no doubt get a boost, but in particular I look forward to seeing how developers can integrate and leverage the vehicle platforms strengths to create yet to be considered applications for users.

The challenges facing the automotive adoption of applications are not small ones…

Safety is at the forefront of reasons people hate the idea of apps in the car.  Obviously these apps need to be implemented in a way that is safer then using your phone while driving and, in turn, the approval process for applications will likely have to be extremely rigorous (more so than the ridiculous Apple process).  The ‘old way’ of thinking about automotive electronics is a barrier as well.  Some companies struggle with getting out of the 2-5 year electronics life cycle (shortening that cycle to keep up with changing technology and customer preferences is a significant benefit of bringing the newer mobile technologies to the vehicle).

The lack of a standard is a difficulty in any new technology.  Continental has gone the route of extending an open source OS (android) which leverages the existing application and developer base.  Ford isn’t tying themselves to smartphone platform and is instead enabling developers to interact with the vehicle from multiple platforms through an API. Which approach will make the most sense in the long run?  Ford’s probably offers the most flexibility in user devices, but will Continental’s provide better integration between the vehicle and the application?

The rollout of 4G wireless technologies is also a key factor in the development of advanced vehicle applications.  WiMax and LTE will battle for marketshare (WiMax has a headstart, but LTE is well backed and will, in some ways, be easier to rollout).  Strategy Analytics’ Randy Frank talks a little bit about the differences in the technologies and the backers on either side of the firing lines.  They key is that both technologies provide higher bandwidth mobile applications.  While many in-car technologies are currently tied to low bandwidth data-over-voice technologies the increased bandwidth will provide opportunities to significantly increase the interaction between the in-vehicle technology and the outside world.  This means improvements in everything from search and download times to the possible delivery of mobile IP Television.  Whatever the increased bandwidth is used for, the rollout of these networks is a very important element in the overall growth of telematics.

Apple is making ~$80 million a month from applications.  Granted, they had to create a hardware and software platform, but automotive companies already have a hardware platform (the car) and they need to enable customers to take advantage of the hardware the way that smartphones have.  Each app is an opportunity for the user to customize their experience, engage the customer more deeply and increase customer satisfaction.

Soon OEM’s wont have to make all the decisions about the functionality of a customers system…the customer will be able to pick and choose the features and functionality they want and create a unique system tailored to their tastes.  It is the convergence and integration of these tools that will expand opportunities for auto-makers, for developers and for any service provider who has a good idea.

Update: The time has come. The Apps are coming… Join us in San Diego for the Apps and Automotive Conference from Telematics Update.

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