United States

Digital connectivity: The future of automobiles

Taking advantage of research and development


There are two undisputed facts about Americans – 1. We are a nation on the go. 2. We need instant satisfaction in terms of information accessibility. With both of these things in mind, it is no wonder that the number-one trend facing the automotive industry is connectivity. The need for connectivity in cars is dominated by a movement toward standard interfaces that are both wired and wireless. Interfaces that enable connectivity with smartphones, removable media devices and other portable products as well as automotive navigation systems are in high-demand from consumers. These in-car entertainment systems are often referred to as infotainment features on new cars.

The greater penetration of smartphones and tablets in the marketplace is leading consumers to expect more advanced electronic contents in their automobiles, with infotainment systems quickly becoming an important factor in helping consumers make new car purchasing decisions. This technology comes with a much faster refresh cycle than is typical in this industry; therefore, the automotive industry is facing technological challenges like never before.  

To meet these new challenges, the major OEMs and Tier 1 and 2 suppliers must provide infotainment systems that include voice control and Internet connectivity, advanced driver assistance systems, remote monitoring and control. With this growing demand for car connectivity, automakers are beginning to work closely with service providers and tech companies to stay ahead of the evolving technological landscape. Instead of hearing about the usual car maker mergers and partnerships, we are now hearing of technology-based alliances, such as the one forged between Nissan and Intel Corporation. The goal of a partnership such as this is to deliver information and entertainment to drivers and passengers simultaneously in a safe manner.

One challenge facing OEMs and all the main players in the auto industry is the incredible speed at which connectivity solutions are changing. The rapid rate of change in electronic trends could potentially render infotainment options obsolete on cars within months of the car being launched. There are several options being investigated now to avoid this trend, with cloud-based services being the leading option. A secondary solution is the modular approach, whereas, components and software designs can be swapped out as more advanced technology becomes available. This approach is already in play with Audi's Modulare Infotainment-Baukasten™.

As technology converges with the car, the silicon solutions serving the infotainment and telematics market are expected to rise from $5.6 billion in 2010 to $8.7 billion in 2018.1 This trend toward global networking and unlimited mobility is also reflected in the way communication users behave. Future services will be optimally adapted to the respective environment and the available technology through transparent, 24/7 access, regardless of location or device. This trend toward instant accessibility is forcing researchers to take another step closer towards seamless integration of multimedia services and social networks in the vehicle, allowing for a continuous entertainment experience.

Winners in the auto industry five years from now will be those who develop a process for capitalizing on innovation from a wide range of sources. Leveraging innovation, R&D and the right partnerships will be critical to their long-term success. It may take years to realize the results, but companies that bypass innovation today are quite simply handing over the future to their competition.

1 Strategy Analytics, October 2011.


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