Reference no: EM133148669
IT's About Business 10.1
Data from Connected Vehicles Is Valuable
A connected vehicle is equipped with Internet access and usually with a wireless local area network (LAN). These features enable the vehicle to share Internet access with other devices inside as well as outside the vehicle.
Connected vehicle technology is becoming standard in many new cars. Semiautonomous driving is a reality, with advanced driver-assistance systems enhancing safety. Also, fully autonomous vehicles, which can operate without any human intervention, are already in service on roadways.
Research firm Gartner (www.gartner.com) forecasts that there will be 250 million connected cars on global roads by 2020. The combination of new car features as well as technology added to existing cars could increase that number to 2 billion by 2025. IHS Automotive (www.ihs.com) estimates that the average connected car will produce up to 30 terabytes of data each day.
Consider that when you start a late-model car today, it updates more than 100,000 data variables, from the pressure in your tires to pollution levels in your engine's exhaust. The onboard navigation system tracks every mile you drive and remembers your favorite route to work. Your car can help you avoid traffic jams and find a place to park. Some of today's cars even collect data on the weight of each occupant in the car.
There are many opportunities to use real-time, streaming data from connected cars. McKinsey (www.mckinsey.com) estimates that in-car data services could generate more than $1 trillion of annual revenue by 2030. Let's look at five areas where connected car data will be particularly valuable.
The driving experience.
Programmable seats, preset radio stations, driver information centers, heads-up displays, adaptive cruise control, lane departure notification, automatic parallel parking, and collision avoidance are all features in many of today's newer cars. But, what if the car learned the driver's preferences? For example, a driver might want to listen to the news in the morning on the way to work to be informed and then to classical music on the way home to relax. Perhaps on most Fridays, the driver takes a detour from her usual route home to meet a friend at a coffee shop. So now, when she gets behind the wheel to go to work on Friday, the radio is set to public radio. After work, the car's radio is set to classical music. Along the way, the navigation system warns her of an accident along her normal route, and it recommends an alternate route to get to the coffee shop.
Driver well-being.
Connected cars have functions that involve the driver's ability and fitness to drive. These apps include fatigue detection, automatic detection of inebriated drivers, and the ability of the car to summon medical assistance if the driver is unable to do so. Another interesting app involves the use of in-car cameras to detect distracted driving, such as texting while driving.
Location-based services.
Data from each car can be used to provide location-based offers. For example, the driver above could receive an offer for a discount on her favorite cup of coffee as she arrived at the coffee shop.
Quality and reliability.
Today, social media has shifted power to the consumer, and they have highlighted the importance of vehicle quality and reliability. These two issues are key elements in building a strong automotive brand reputation and customer loyalty. However, no matter how excellent the manufacturing process, automobiles are complex machines, and issues often appear in the field. Automobile manufacturers use data from connected cars to find and resolve these issues quickly. In this way, these companies will reduce warranty costs and enhance their brand and customer loyalty.
Using data from sensors, the cars themselves can predict needed service and maintenance and notify the driver. The sensor data can also enable dealerships to perform remote diagnostics to assess when a service or repair is needed and to identify the needed parts. When the customer arrives for an appointment, the technician with the appropriate skills is available with the correct parts to perform the service and to minimize any customer inconvenience. This process will also optimize inventory levels in dealerships and minimize inventory-carrying costs.
This sensor data provides valuable insights regarding the performance and health of the vehicle: for example, how, when, and where the vehicle is driven; the driver's driving style and preferences; and many other variables. Analyzing these data can help to provide a better, safer driving experience while enhancing vehicle quality and reliability.
Infotainment (Information + Entertainment).
The average American spends, on average, 8 percent of each day (about two hours) in his or her car. Infotainment has existed in cars since the 1930s. Consider the following audio features in cars:
Radios began to appear in cars in the 1930s.
FM radio appeared in the 1950s.
Eight-track tape players appeared in the mid-1960s.
The cassette deck debuted in the 1970s.
The first factory CD player appeared in 1985.
Satellite radio appeared in the 1990s.
Today, drivers can connect almost any digital device that plays audio and video to their car's infotainment system. For example, how much do parents appreciate built-in movie players for their children in the backseat? Mobile Wi-Fi connectivity has brought streaming services for news and entertainment into the car as well.
There are many ways to capitalize on the integration of infotainment data and vehicle data. For example, companies use data on location, length of average trip, miles driven per week, number of passengers, date, and/or day of week to provide various offerings.
Recommended content: Short-form content may be suggested when you are taking the children to baseball practice and long-form content suggested when you drive to the beach. Short-form content is short in length, such as video clips, listicles (short articles composed entirely of a list of items), and blog posts fewer than 1,000 words. This type of content can appeal to users' limited attention spans. Long-form content consists of longer articles (typically between 1,200 and 20,000 words) that contain greater amounts of content than short-form content. These articles often take the form of creative nonfiction or narrative journalism.
Mobile payments: Pay-per-view movies and sporting events (for backseat passengers).
Intelligent messaging: You can access breaking news, traffic, and weather reports based on actual travel patterns.
Live content transfer: When you have arrived at your destination, you can continue watching on your tablet, smartphone, or television.
Many companies are competing in the connected services marketplace. For example, Weve (www.weve.com/about) is a leading provider of mobile marketing and commerce in the United Kingdom. The firm combines and analyzes real-time data streams from 17 million mobile users for intelligent messaging, targeted marketing offers, and mobile payments. These data streams include location data, purchase history, daily routines, and social data that users choose to make public.
All of the automakers are worried about Google and Apple. These two technology companies are developing cars and self-driving technology, and both are leaders in connected services. For example, Google's Waze is a leading in-car app. Waze is an advertising-supported and crowdsourced program that offers congestion-avoiding directions. Waze examines personal data in smartphones with users' permission and sends pop-up ads to the screens of its 50 million global users.
Ford (www.ford.com), BMW (www.bmw.com), General Motors (GM; www.gm.com), and other automakers have deployed systems that can host, and limit, in-car apps produced by competitors. These systems allow drivers to plug in Apple's and Google's competing vehicle screen operating systems, CarPlay and Android Auto, respectively, without giving the two technology companies access to drivers' personal information or vehicle diagnostics. For example, Ford's offering in this area, which Toyota also uses, is called AppLink. The app enables the car to access 90 phone apps without using CarPlay or Android Auto as an intermediary.
Other companies are making efforts to develop in-car services. As one example, in 2016, BMW, Daimler, and Volkswagen teamed up to purchase Nokia's digital mapping business, called Here (www.here.com/en), for $3.1 billion. This acquisition gave these companies a platform for location-based services and, eventually, for mapping capabilities for self-driving cars. GM's OnStar (www.onstar.com) mobile information subscription service offers dashboard-delivered coupons for Exxon and Mobil gas stations as well as the ability to book hotel rooms. Mercedes-Benz's concierge service Mbrace (www.mbusa.com/mercedes/mbrace) can route a driver around traffic or bad weather. Both OnStar and Mbrace cost about $20 per month. Alibaba Group (www.alibaba.com), whose YunOS (operating system) connects phones, tablets, and smartwatches, is also working on deals with Chinese automakers to operate with vehicles.
Significantly, interest in car data is not limited to technology and automotive companies. The insurance industry also values access to data about driving habits. The insurance companies could then use these data to charge higher rates for drivers who exceed speed limits and lower rates for those who drive safely. Along these lines, GM and Ford offer drivers an app that calculates a driver score that could reduce their insurance rates if they exhibit safe habits.
Finally, IBM (www.ibm.com) is planning to become a single point of contact for all parts of the automotive industry. The company has signed a contract with BMW that will connect BMW's CarData platform to IBM's Bluemix platform-as-a-service cloud computing application (see Technology Guide 3). The idea is that IBM will host and analyze data from connected cars and then send the data to third parties-with drivers' consent-when required. Early applications can link your car to your local insurance agent, dealership, and automotive repair shop.
Sources: Compiled from A. Ross, "The Connected Car 'Data Explosion': The Challenges and Opportunities," Information Age, July 10, 2018; "The Connected Car, Big Data, and the Automotive Industry's Future," Datameer Blog, February 26, 2018; M. Spillar, "How Big Data Is Paving the Way for the Connected Car," Hortonworks Blog, January 23, 2018; L. Stolle, "Is Data from Connected Vehicles Valuable and, if So, to Whom?" SAP Blogs, June 21, 2017; C. Hall, "BMW's Connected-Car Data Platform to Run in IBM's Cloud," Data Center Knowledge, June 16, 2017; D. Cooper, "IBM Will Put Connected Car Data to Better Use," Engadget, June 14, 2017; N. Ismail, "The Present and Future of Connected Car Data," Information Age, May 17, 2017; R. Ferris, "An 'Ocean of Auto Big Data' Is Coming, Says Barclays," CNBC, April 26, 2017; D. Newcomb, "Connected Car Data Is the New Oil," Entrepreneur, April 17, 2017; M. McFarland, "Your Car's Data May Soon Be More Valuable than the Car Itself," CNN, February 7, 2017; L. Slowey, "Big Data and the Challenges in the Car Industry," IBM Internet of Things Blog, January 12, 2017; P. Nelson, "Just One Autonomous Car Will Use 4,000 GB of Data/Day," Network World, December 7, 2016; S. Tiao, "The Connected Car, Big Data, and the Automotive Industry's Future," Datameer, October 27, 2016; M. DeBord, "Big Data in Cars Could Be a $750 Billion Business by 2030," Business Insider, October 3, 2016; D. Welch, "The Battle for Smart Car Data," Bloomberg BusinessWeek, July 18-24, 2016; D. Booth, "It's Time for Automatic Alcohol Sensors in Every Car," Driving, May 6, 2016; "The Connected Vehicle: Big Data, Big Opportunities," SAS White Paper, 2016; G. Krueger, "Connected Vehicle Data: The Cost Challenge," Federal Department of Transportation, 2015; and www.ihs.com, www.bmw.com, accessed June 27, 2019.
Questions
Describe several other uses (other than the ones discussed in this case) for data from connected cars.
Would data from connected cars be considered Big Data? Why or why not? Support your answer.