Car manufacturers will soon be competing against technology companies to provide the online services to connected cars.
Autonomous connected vehicles are seen as the first major market for so-called internet of things (IoT).
This will be an important market for IC and hardware system suppliers. But arguably the biggest market opportunity will be in the provision v of online services that support the IoT devices in the car.
Car manufacturers see this as their domain and they want a major slice of the business. But to do this they will have to compete with IT firms and partner with software suppliers.
According to chip supplier NXP:
“The race to win the future mobility services business has begun. It is wide open on how automakers will fare versus the technology companies.”
Existing automotive technologies and business models that have worked for the car industry for a century are not so well suited to a changing car market with autonomous vehicles and IoT-connected cars.
“So will technology companies like Uber win this race by adopting new and successful business models?” asks NXP.
In order to address the connected vehicle opportunity it will be necessary to form cross-industry groups. This will combine car makers with electronics firms and software services suppliers.
No single sector will be able to capitalise on this market, due to its diversity and the range of technologies required.
Putting electronics management systems in cars was only the beginning. Connecting vehicles to the internet will add a far greater level of complexity to the automotive business model.
According to NXP, the convergence of personal and public transportation markets, will force car manufacturers to make “a leap of faith and fundamentally transform their value chain”.
NXP believes car makers will find themselves fighting on two major battlefronts.
Their core activity will be designing new forms of autonomous connected vehicles, but to be successful in the connected vehicles market they will need to develop and sell internet based services.
Whether they are successful in doing this will determine they business growth in the years ahead.
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