Car makers have traditionally controlled the technology that drivers use within their vehicles. Accordingly, they have pursued strategic alliances with hardware suppliers to access the infotainment systems they believe their customers require. And yet, by pursuing such a proprietary strategy in the fast-moving world of consumer electronics, they are effectively forcing their customers to commit to systems that will soon become 'legacy' in status.
The challenge carmakers face is that the proprietary software they use to power their on-board hardware systems – such as radio and satellite navigation – can only perform a fraction of what modern devices can. Without the technological capabilities to compete with software and technology leaders, carmakers are finding it harder and harder to get customers to buy built-in infotainment systems. They face a future in which they have little or no control over the technology that drivers use in their vehicles.
By taking decisive action towards a new technology-driven strategy, carmakers can regain control and develop the multimedia technology their customers want.
In our view, carmakers can achieve this ambition by taking the following steps:
making open source the starting point for in-car technology
being open to new partnerships with technology and software leaders
focusing technology innovation where it counts.
Carmakers must put their customers first. This means accepting that they will want to use the smartphone interface that they have customised to meet their needs and lifestyle. To enable this, open-source is key. The MyFord Touch® system, for example, which the carmaker developed with Microsoft, lets drivers connect their own device to their car. Having an open-source operating system eliminates the effort and cost involved in creating a separate proprietary system. It allows Ford to provide software upgrades to its customers as they hit the market, helping the company stay ahead in the digital race.
As they move towards an open-source set-up, carmakers need a change in mindset. They should recognise that they are not operating system experts and release the tight grip they have on design. Partnering with third-party operating system developers will unlock a number of benefits, including reducing (or eliminating) the cost of maintaining complex proprietary systems or developing new ones.
Link-ups, such as Apple CarPlay (originally ‘iOS in the car’) and the ‘Open Automotive Alliance’ between Google and four automotive companies that aims to integrate a vehicle-adapted version of Android into new car models, are steps in the right direction.
Carmakers should focus their innovation on the areas where they can make a difference: designing the interface with the customer and supporting apps. Here, they can build on deep customer insight to create new mobility services that reflect their own brand values and meet customers’ needs. A good example is the Volkswagen Service app that lets users locate their closest dealer and, in the event of a breakdown, helps the nearest service centre locate their vehicle faster.
As the internet of things develops, the level of connectivity that different vehicles offer will become a decisive factor for a fast-growing group of technology-savvy buyers. More and more, consumers will chose brands that differentiate themselves by having the best connectivity. If carmakers fail to realise that threat, they risk falling victim to digital disruption.
To find out more about developing in-car technology for the connected car, contact us now.