The Connected Mobility Applications Market: Challenges and Opportunities

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Connected mobility is a megatrend significantly impacting the automotive industry and is expected to grow rapidly as a market. However, where will this growth come from? What are the areas in which connected mobility applications and services provide value? What are some of the challenges in propelling this growth forward? Unfortunately, the answers to these questions are not clear.

Understanding the connected vehicle ecosystem

We must understand what constitutes a connected vehicle ecosystem before discovering where the connected mobility market is headed. The ecosystem for a connected vehicle includes the underlying technology, the applicable services, and the infrastructure required to enable the connected vehicle to operate.


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The technology required to enable connected vehicles includes the hardware, the platforms on which this hardware operates, and the software needed to enable connected solutions. The critical hardware required involves sensors like cameras, LiDAR sensors and radars, display panels within vehicles to display output, smartphones with connected mobility applications, and the mobile technology necessary to transmit data like Wi-Fi, WLAN, Bluetooth, etc.

Technology platforms include operating systems for mobile phone providers (like iOS, Android, etc.), telematics solutions (like fleet optimization, predictive maintenance, traffic management, collision avoidance, emergency vehicle notification, etc.), and OEMs and third-party platforms that can enable various connected mobility applications and services. These include various cloud platforms from providers like AWS and Azure that can gather connected vehicle data to upload to a cloud.

Finally, we have software applications to provide the end customer with the connected vehicle utility. This includes software for weather applications, social media, entertainment, e-commerce, vehicle diagnostics, etc.

Another key aspect of the ecosystem is the services that can be offered. This includes diagnostics solutions, safety and security services like various ADAS (Advanced Driver Assistance System) features, roadside assistance, insurance, entertainment, and other analytic solutions.

Finally, the last aspect of the connected vehicle ecosystem is the infrastructure required —  network infrastructure like cellular connectivity, GPS, and internet; transportation infrastructure like sensors, traffic systems, smart roads, highways, etc.; and utilities like electricity, solar, etc., for charging the batteries. Much of the infrastructure is still being implemented to enable Vehicle-to-Vehicle (V2V) and Vehicle-to-Everything (V2X) services.

Connected Mobility Goals and Challenges

Many U.S. OEMs have set targets to generate USD20 billion to USD25 billion in sales through connected mobility by 2030 (e.g., GM, Stellantis, etc.). However, most lack a clearer view of whether these targets will be met as services are still being rolled out for consumer testing and acceptability. The two essential services being tested are in-vehicle infotainment (IVI) and ADAS.

Within ADAS, safety features will find acceptance among consumers who would pay for such features. For example, Ford’s BlueCruise system allows hands-off highway driving with features such as Adaptive Cruise Control (ACC) and Lane Centering Assistance. Similarly, Cadillac has a Super Cruise function, while Mercedes-Benz has Driver Assistance, and Tesla has its Autopilot system. Many of these features are offered as options packages today, but they will become standard in the future.

So, OEMs will need to shift to include the cost of the new systems in the vehicle price rather than charging for the options package. For example, Rivian’s safety features on its truck trims are now considered standard. To continue to charge for these advanced options, OEMs will need to innovate in ADAS — for example, make them more predictive, like adding safety features activated based on weather conditions in a particular driving situation.

Other use cases of connected mobility services are at the early stages of consumer testing and acceptance in the market — infotainment, insurance, video streaming, personalized services, etc. For auto insurance, the risk is transferred to the vehicle from humans. Many OEMs will self-insure in the future as they have the data for the owners and drivers and can accurately assess driver risk. As autonomy takes hold, this will be the direction OEMs will be headed towards.

Apart from market need and consumer willingness to pay, another challenge for adopting and accepting infotainment and personalized services is the rollout of required infrastructure — 5G, hotspots, connected traffic signals, smart roads and smart highways, and so on. 5G is currently being rolled out in only 20 major U.S. cities. So, a key challenge would be ensuring the continuity of high broadband infotainment or personalized services on a drive from Detroit to Chicago, for example.

Other barriers to adopting these services are related to costs — how much data should you store on the cloud, as that costs money; so, edge computing capabilities become essential to reduce data storage costs. Automotive manufacturers are also figuring out what data needs to be collected to provide a service. For example, future autonomous vehicles can generate 1 exabyte of information per year. How much of this data needs to be collected? These issues are still being resolved. Signal processing latency is also crucial and is related to telemetric infrastructure, which is not mature yet. Having the right technical resources to solve these challenges is also significant.

However, one area where connected mobility has picked up and been adopted is internally within OEM organizations to reduce costs. Connected vehicle data is being used for product feature redesign. For example, Tesla recently removed a lumbar support feature on its passenger side seat, as 97% of users never used it. Other areas of connected vehicle data use include the cost of quality reduction through geospatial data analytics and reduction in warranty costs through analyzing driver behavior and advanced driver segmentation.

In conclusion, the promise of connected mobility solutions is real. The industry is still in the early stages of adoption as OEMs try to figure out market acceptance and monetization potential. There are technical, infrastructural, and human resource challenges to be resolved. But the industry is rapidly progressing to a highly connected automotive future.