Study: Connected car growth driven by diagnostics, not infotainment

A new, 120-page report has been released by iGR, a mobile market consultancy, titled “U.S. Connected Car Market Forecast, 2012-2017: Infotainment on Four Wheels.” The study predicts a compound annual growth rate of 142 percent for connected cars.

For the purpose of this study, iGR defined “connected car” with a strict meaning of that often-used phrase. RAIN spoke with report author and iGR founder Iain Gillott about what a connected car really is, what is driving its development, and the key question of whether dashboards will ever be standardized again.

RAIN: What does “connected car” mean to you?

IG: There are lots of car systems. Many of them are not truly connected cars. You take a smartphone into the car; you can do Bluetooth and run apps. That’s not what we’re talking about. The way we look at it, the car must have its own connection. The number of cars like that today is relatively small, outside of OnStar.

Having said that, things will change significantly in the next 24 months. We looked at all the car manufacturers, what they’re doing today and where they’re going — in 24 months it’s going to be very difficult not to get Internet [built into] the car.

RAIN: The truly connected car, one which has Internet built in, is the roadmap of the future?

IG: Yes, I think so. What the car manufacturers want to do are things like car diagnostics for service and warranty. Engine management software updates. That obviously impacts their warranty and service costs significantly. If you can do an engine software update remotely, instead of issuing a recall and having the customer bring in the car, that’s pretty big. Pandora [and other infotainment apps] are nice, but the car companies are trying to do other things with the built-in connection. That’s the benefit to the car companies, rather than offering apps to the consumer.

When you look at some of the new cars like the Mercedes M-Class, the systems in it are amazing. Mercedes can look remotely at whether the car needs service. As opposed to, “Bring it in, we’ll take a look at it when we get a chance.”

RAIN: In that view, diagnostic apps are driving the connected car. Users and their in-car audio will be dragged along with that imperative.

IG: We surveyed consumers. Herein lies the problem! Knowledge of this sort of technology, and the systems available today, is low. Even navigation, which is highest-used in-car technology today, is used by only 30 percent of drivers. When we asked people to consider their current car and what they liked about it, the top three answers were: safety, reliability, and fuel economy. Infotainment features were just up from the bottom. When we asked people the same thing about buying a new car, we got the same answers.

The manufacturers are throwing infotainment in the car. But there is an education process that needs to happen with consumers, about why it’s good, why they need it. There’s a disconnect between what the consumers perceive, and what the car companies offer.

RAIN: All the car companies seem to be going in different directions. Will we ever get a standardized dashboard that anybody can understand when they first get in the car?

IG: Probably not. [laugh] But I’m not sure the rest of the car is really standardized. Beyond the speedometer and seat belts, there’s not much standardization. I’m not sure the OEMs want standardization in the car. It’s hard to imagine that Mercedes and Jaguar would have the same look-and-feel. They certainly don’t want that.

Brad Hill