Digital automotive – Window of opportunity

Data from cars is better than data from phones for now.  

• When it comes to digital transportation services, I think that data that comes directly from the vehicle will be much more accurate and therefore, valuable, highlighting the opportunity that the OEMs still have provided they act in time.
• When it comes to transportation data, Google is currently the king as it has over 2bn devices in the hands of users whose data it can use to draw insights about transportation and the events that affect it.
• This is not because vehicles do not generate data but because 99.9% of that data stays within the vehicle and is never really used for anything other than diagnosing faults.
• Google generates these insights by assuming that handsets moving down the street are in vehicles from which it can draw conclusions about traffic conditions.
• The weakness of this system has been laid bare by a German artist by the name of Simon Weckert who managed to create a traffic jam in Google maps by wheeling a trolley of smartphones down an empty road (see here).
• While this in no way detracts from the usefulness of Google Maps in any practical sense, it does expose the weakness of using estimates rather than the real data itself.
• For example, if Android Automotive was running in every vehicle and this data was being used for traffic, then this would not have been possible.
• A great example of how this could be very relevant is with a smart parking service.
• Using smartphone data and data from parking facilities, a basic smart parking service can be created but it will be quite limited in terms of what it could achieve with everything being based on estimates.
• In contrast using vehicle GPS (accurate), door openings and closings, ignition stops and starts, a service could be created that would know where all the free parking spots are and exactly when they become occupied.
• Combine this with data from parking structure operators and a much better smart parking service for which users would be willing to pay a higher price could be created.
• The danger for the OEMs is time.
• The longer Google is left to crunch the imperfect data that it gets and turn it into real insights, the more accurate it becomes.
• There may come a time when this data is good enough to compete with the real data from the vehicle but I suspect that even for Google, this day is quite far off.
• Hence, for the OEMs, I think that there is a window of opportunity to make their data available for these types of services because as it stands today, these services will be superior to anything that anyone else can come up with based on estimates.
• Users will prefer these services to those on the smartphone which could also drive digital engagement in the vehicle away from brought-in devices to the infotainment unit.
• This is another goal that the OEM must achieve because if digital engagement in the vehicle stays on the smartphone, there is not much point in having any infotainment at all.
• Even if OEMs do not create the services themselves, if it is their data that is being used, then they will have a seat at the table and the opportunity to earn a share of the revenue.
• This could end up being crucial to their long-term survival which RFM sees as being at serious risk from substantial declines in vehicle demand driven by electrification and autonomy.
• The OEM approach to this seems to be a problem to be solved rather than an opportunity, which I think is one reason why they are really struggling with the changes that are coming to their industry.
• The opportunity remains but the direction that the OEMs are taking continues to fill me with great concern.