Convergence is happening all around, and rapidly. The distinction between the physical and digital worlds is increasingly getting blurred across industries, both in business-to-business (B2B) and business-to-consumer (B2C) context. The automotive industry is no different.
Car buyers, according to a McKinsey survey, are increasingly prioritizing built-in Internet connectivity over features such as fuel efficiency and engine power when making vehicle purchase decisions. Automotive original equipment manufacturers (OEMs) worldwide, therefore, are seeking to reinvent themselves around software and services, for sustained top line expansion.
This shift in emphasis, from OEMs optimizing the car’s internal functions to enhancing its ability to connect with the outside world, and improving the in-vehicle user experience, is significant. Accordingly, there is growing focus on developing “connected cars”, vehicles that can harness onboard sensors and wireless network connectivity to optimize their operations, beside improving passenger convenience.
The underlying business opportunity is massive. Gartner expects the number of connected cars worldwide to reach 250 million by 2020, representing almost 20% of all vehicles on the road. For the auto industry to realize this lucrative opportunity, two factors, more than any other, will be critical–the rollout of 5G, and the commercialization of the Internet of Things (IoT).
5G driving vehicle connectivity
The connected car will generate massive volumes of data. Just to put that in perspective, today’s average car has the combined processing power of 20 personal computers, generating as much as 25GB of data per hour, a McKinsey study estimates.
Existing cellular network technologies, already grappling with the challenge of handling massive smartphone data consumption, are ill-equipped to tackle this soaring data traffic from Internet-enabled vehicles.
That’s where the anticipated transition to 5G, the next-generation wireless technology, over the coming years promises to be a game changer. It is expected to facilitate dramatic performance-related gains with regard to downlink speed, device density and latency. For instance, with throughput under 5G projected at up to 10GB per second, as compared to LTE’s maximum of 300MB per second, telcos could substantially improve the capacity and range of their networks.
IoT enabling V2X
Beyond connectivity, 5G will also foster an unprecedented leap in the evolution of communication protocols, helping OEMs develop self-learning, autonomous vehicles. This transition, however, will not happen without IoT playing its part.
Cars typically contain around 150 different microprocessor-controlled sub-systems underpinned by diverse functional units. And, as connected cars continue to evolve, deep integration will be necessary for all the instruments, devices and functionalities that operate the vehicle. This will require OEMs to put in place an automated mechanism that seamlessly connects chips embedded in various car hardware and software to one another and control devices or networks outside the vehicle.
Once auto makers are able to integrate all these hardware and software inside, they could leverage 5G to boost car connectivity with vehicle to everything (V2X) communication. V2X will help cars interact with any object having sensors or cellular connectivity, such as other vehicles (V2V), pedestrians (V2P), networks (V2N), and the surrounding infrastructure (V2I).
Moreover, 5G’s ultra-reliable and super-fast connections will foster the exchange of large volumes of 3D mapping data, and help improve situational awareness through sharing of sensory data.
Wide-ranging consumer benefits
I expect the convergence of 5G and IoT to deliver multiple benefits for the car buyer, in terms of enhanced functionalities concerning telematics, automated driving, infotainment, safety and security, and value-added services.
For instance, OEMs could roll out in-vehicle mobile hotspots that let passengers connect their laptops, smartphones, tablets and other mobile devices to the car for browsing, streaming content, and accessing social media.
Similarly, companies will be able to release over-the-air (OTA) software updates for a vehicle’s connected services. This will eliminate the need for customers to visit dealers, by providing them with live updates on maintenance needs, service appointments and order parts.
Car safety and security, too, will be reimagined with 5G and IoT. The next-generation wireless connectivity technology, alongside sensor data, will allow OEMs to track vehicle condition in real time, to determine maintenance needs. In the event of an accident, pre-installed services could be triggered to initiate automatic crash notifications, so that emergency services can be alerted.
The connected car of the future will be the ultimate Internet of Things, gathering and analyzing massive amounts of data from a wide range of sources. It will deliver enhanced user experiences, while significantly improving vehicle safety and security.
As the inevitable virtualization of cars gathers momentum, I expect OEMs to focus more on holistically to be interconnecting the different infrastructure for control versus convenience networks. And, that will require vehicle manufacturers to collaborate closely with mobile network operators and software developers. Exciting times lie ahead!
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