The Connected Car: Where's the value being created for the ... · mobile devices are being used...

© 2011 IBM Corporation

Advancing MobilityThe new frontier of smarter transportation

Christian Kirschniak IBMFISITA / November 18, 2011


13%

30%Next 5 years

Last 5 years

What percentage of revenue comes from new sources, such as new products, services or markets?

In our recent Global CEO study:

… achieving results like this would have to be centered around the development of service-based business models

2.3xmore


…while the industry also provides significant economic contribution

Ownership of vehicles provide aspirational value and freedom of movement…

For decades the auto industry focused on two primary themes…


Climate and pollution

Traffic

Population growth

These traditional norms are being challenged sharply by forces limiting its unchecked expansion…


In 2010, over ¼ of the global population - 2 billion people

- were on the internet

Two billion peopleonline

If Facebook were a country, with over 600 million members it would be the 3rd largest population in the world

Social networking giant

Over 5 billion mobile devices are being used globally

Global mobile explosion

“Every two days we create as much information as we did between the dawn of civilization up until 2003”

Data explosion

There are expected to be 77bn mobile apps downloads in 2014

“Appification” of everything

Smart device everywhere

There could be 50bn mobile devices connected to the

internet by 2020

These disruptive forces are also running into sophisticated consumers who are connected, knowledgeable and empowered…


Who will make the contributions enabling the adoption of smarter, urban ecosystems?

Government / Urban Transport Authorities

Start-up companies

Service Providers / Integrators

Auto OEMs

Fleet Operators

Energy Utilities

62%

60%

45%

43%

36%

35%

"e-mobility is the value-added integration of information, technology, communication, process and

solutions"–Chinese Industry Group


RetailPurchase

HistoryWarranty

HistoryService History

Finance Packaging

Why should automakers care?

…the connection with customers was previously transactional


RetailPurchase

HistoryWarranty

HistoryService History

Finance Packaging

In just over 5 years, the industry has begun moving from limited, infrequent transactions with consumers…

Portals

Social Networking

Viral Marketing

Search Optimization

Blogs / User Communities

E-mail /SMS/Text


Retail

Mobile Web (where?)Transportation and location based services

Connectivity ServicesSupporting driver and passengers in vehicles

Mobility Services (how?)Transportation optimized across modes

Purchase History

Warranty History

Service History

Finance Packaging

In just over 5 years, the industry has begun moving from limited, infrequent transactions with consumers…

Portals

Social Networking

Viral Marketing

Search Optimization

Blogs / User Communities

E-mail /SMS/Text

…to a rapidly developing network of information enabling auto companies to know and understand their customers in new ways


Electrified Vehicles

Compact / Urban

Vehicles

Sports / Coupes

SUV / CUV / Vans

2010 7 1 2 1

2011 12 5 4 3

2012 9 8 3 5

2013 7 9 5 6

35 23 14 15

The industry is already thinking through the vehicles that will be needed in relation to these trends…


Urban vehicles will be

smaller…

…havelowercost...

…and less

profit

Volume Sales

Business Model Innovation


The ability to interact with consumers in new ways will be centered around connected vehicles


Emergency & safety

Productivity

Mobility commerce

Information services

Traffic & navigation

Intelligent driving

Multimedia / entertainment

eMail, contacts & calendarWorkflow managementBusiness applications

Pay-as-you-driveRoad charging

Location based News & weather

InfotainmentPervasive gamingComputer, games

Stolen vehicle trackingEmergency assistance

Remote diagnostics

Road warnings

Advanced navigationTraffic prediction

Driver status What will be open?

How will you profit?

Automated drive

Smart home

Multimodal optimization

EV charging & billing

Green routing

P2P transactions

Social media


41%

Auto electronic and software systems will be open and customized by Smartphone apps…


41% Automotive executives agreed51%



41%


JapanChina

W. EuropeEmerging Mkt

US

…there’s a large gap in how different regions think about this


Emergency & safety ProductivityMobility

commerceInformation

servicesTraffic &

navigationIntelligent

drivingMultimedia /

entertainment

The battleground for connected vehicles will be about what can be controlled and by who…

Control point

Battleground for revenue

Controlled by automakers

Potentially OpenClosely Controlled


Built In

Brought In

Beamed In

Delivery models are rapidly changing requiring integration points…

…depending on what is best suited for the

application


Two technologies will impact how business modelsaround vehicles can change…

Brought In

Beamed In

Smart phones will enable drivers to move their information with them

Cloud-based solutions allow data, content and parameters to be available from anywhere


Migrate product portfolio toward electrified vehicles

Provide Telematics Solutions

Provide Mobility-as-a-service

Provide Car Sharing

Provide Charging Infrastructure

83%

65%

63%

41%

19%

What are the best options for automakers to develop mobility solution offerings?


A game-changing byproduct of the connected car may be the interchange-ability of vehicles


Common access across a portfolio of vehicles:

• Music / media• Business

applications• Vehicle adjustments• Other content

• Common settings

• Preferences• Calendar• Navigation


To appeal to consumers, solutions must be simple, yet comprehensive…



Daily vehicles Subscription vehicles



Vehicles

Daily vehicles

Subscription vehicles



Vehicles Other Modes

Daily vehicles




InsuranceTollsParkingElectricity

SecurityConnectivityOther in-vehicle purchases



Vehicles Cashless PackagingOther Modes

Daily vehicles






Solutions beyond the vehicleOptimization and guidance across modesIntegrated cashless process



Vehicles Cashless PackagingOther Modes

Service Integration

Daily vehicles




Solutions beyond the vehicleOptimization and guidance across modesIntegrated cashless process


Automotive companies can embrace new potential business models that completely change the customer experience…

Enable consumers with your full portfolio of vehicles…

…help them link to other modes…

…control the commerce of transportation

…the customer connections and insight generated by these types of offerings will be unique and invaluable


The opportunity for the industry is exciting…

1. Invest aggressively in new business model strategies just as in technology strategy

2. Develop and execute pilots, learn and adapt

3. Redefine how to transform the connection to your customers through relationship based service offerings


“In the next 10 years we will have more change than in the 50 years before”

–European Automotive OEM, 2008IBM Automotive 2020 Study

The Connected Car: Where's the value being created for the ... · mobile devices are being used...

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