iot services in the automotive sector

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IoT Services in the Automotive Sector The Car as a Platform of Services… …Changing The Automotive Ecosystem Toward a Broad Array of Services Security As The Main Challenge To Overcome Toward a Continuous Customer Relationship + June 2015 + Hélène André

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Page 1: IoT services in the automotive sector

IoT Services in the Automotive SectorThe Car as a Platform of Services……Changing The Automotive EcosystemToward a Broad Array of ServicesSecurity As The Main Challenge To OvercomeToward a Continuous Customer Relationship

+ June 2015

+ Hélène André

Page 2: IoT services in the automotive sector

IoT Services Become Crucial For Both Enterprises & Consumers

For EnterprisesServices derived from the connected devices will drive IoT revenuesIoT Business revenues in 2020 : $300 Billion 90% from software & services

For ConsumersThese services will provide awareness, knowledge & actions on their surroundingsUltimate answer to their need of cost-effective & tailored solutions

Products to be designed as Connected Platforms of Services

Gartner, Press Release, December 2013

Page 3: IoT services in the automotive sector

From Product-Centric to Service-Centric Business Model

Product

One-time product sales

After-sales service

Shift in Value CreationCompanies need to create and capture value differently

Experience

Recurring revenues

Continuous customer relationship

HBR, How the Internet of Things Changes Business Models, July 2014

Page 4: IoT services in the automotive sector

The Car as a Platform of Services…

90%40%

10%

40%20%

23MConnected vehicles

2015 2020

152MConnected vehicles

The car becomes a platform of services connected to the city, to companies and to other vehicles

hardware contentsoftware

IHS, Emerging Technologies: Big Data in the Connected Car, Nov 2013Morgan Stanley, Self-Driving the New Auto Industry Paradigm, Nov 2013

Page 5: IoT services in the automotive sector

…Disrupting The Automotive Ecosystem

The IoT-enabled car is a hub for an entire ecosystem of connected services provided by various players for various players

Drivers & Passengers

Car Makers, OEMs & Traditional suppliersGM, VW, Renault-Nissan, Valeo, Delphi, Faurecia…

Third-party suppliers & Content producersGarmin, Apple, Netflix, Google, Comcast

Page 6: IoT services in the automotive sector

Toward a Broad Array of Services

4G LTESmartphone

Infotainment Safety & Security

Usage-based insurance

Data Management

Over-the-air updates

Business Insider, March 2015

Page 7: IoT services in the automotive sector

Toward a Broad Array of Services

Infotainment Safety & Security

Usage-based insurance

Data Management

Over-the-air updates

Business Insider, March 2015

AT&T Mobility is currently emerging as a leader in infotainment in the USA. The carrier has secured Tesla, Subaru. AT&T has made it easy for the customers to use AT&T with their car by allowing AT&T-equipped cars to work inside AT&T's shared data plans. There’s room for more carriers but also for content producers to gain ground in the car space. According to Business Insider, 25% of global consumers would be willing to receive in-car advertising if it meant they got free basic services in exchange.

Google is developing a version of its Android software that would be built directly into the consoles of cars. Such a move could obviate the need to have a smartphone connected to the car's infotainment system.

Page 8: IoT services in the automotive sector

Toward a Broad Array of Services

V2VV2IOBD-II plugin

Infotainment Safety & Security

Usage-based insurance

Data Management

Over-the-air updates

Page 9: IoT services in the automotive sector

Toward a Broad Array of Services

Infotainment Safety & Security

Usage-based insurance

Data Management

Over-the-air updates

There are services that can be preinstalled by the car manufacturer like Volkswagen’s Car-Net which can automatically alert emergency services when an accident has occurred. These services can also be provided by additional devices. The Automatic car adapter can alert Automatic’s call center to send emergency services to the location of the crash and notify emergency contacts.

Beyond emergencies, Garmin launched Garmin Traffic–a subscription add-on to their GPS devices that helps drivers avoid traffic and other delays in real-time. Traffic alerts come from a traffic data collection system that analyzes traffic flow data collected from millions of Garmin device owners, cellphone owners, incident reports, fixed traffic sensors on major roads…

Page 10: IoT services in the automotive sector

Toward a Broad Array of Services

OBD-II pluginBluetoothSmartphone

Infotainment Safety & Security

Usage-based insurance

Data Management

Over-the-air updates

Page 11: IoT services in the automotive sector

Toward a Broad Array of Services

Infotainment Safety & Security

Usage-based insurance

Data Management

Over-the-air updates

Connected cars, and soon autonomous cars, are expected to bring accident rates down. It is an incentive for insurers to develop usage-based insurance instead of relying on premium income. Insurers now have to tailor their product offerings with historical and real-time data about customers’ behavior. Like Allstate and its Drivewise program that collects data every time customers drive their vehicle and that rewards safe drivers.

Big data analytics can help insurers monitor how their customers drive. But incumbents may be too slow to catch up with startups like Metromile and big data kings like Google. Metromile offers per-mile car insurance and is already attracting low-mileage drivers. Additionally, carmakers may choose not to share the data they collect and rather use it to bundle their own policies in with their vehicles. That’s what BMW has hinted at.

Page 12: IoT services in the automotive sector

Toward a Broad Array of Services

SIM card4G / LTE

Infotainment Safety & Security

Usage-based insurance

Data Management

Over-the-air updates

Page 13: IoT services in the automotive sector

Toward a Broad Array of Services

Infotainment Safety & Security

Usage-based insurance

Data Management

Over-the-air updates

Over the air updates enable to keep contact with the vehicle while skipping the visit to a dealership.

Tesla is better positioned than most automakers to offer OTA software upgrades, particularly major ones that affect the powertrain and not just the infotainment or navigation system. This is because all of the Model S's electronic control units (ECUs) can be centrally accessed as part of the vehicle's telematics system. On most vehicles, there are hard firewalls between ECUs that serve navigation systems, entertainment units and powertrains to avoid hacking and protect IP.But Tesla is not alone, Mercedes has partnered with Verizon to develop and offer Mbrace2 to its drivers.

Page 14: IoT services in the automotive sector

Toward a Broad Array of Services

Infotainment Safety & Security

Usage-based insurance

Data Management

OBD-II pluginBluetooth & SmartphoneGPS & Radio

Over-the-air updates

TechCrunch, January 2015

Page 15: IoT services in the automotive sector

Toward a Broad Array of Services

Infotainment Safety & Security

Usage-based insurance

Data Management

Over-the-air updates

TechCrunch, January 2015

Airbiquity is a platform of services that goes from collecting to analyzing data. It links the vehicle to Airbiquity cloud via mobile or embedded device. Airbiquity then delivers smartphone apps, cloud content, and services through the vehicle head unit with the driver’s smartphone. Airbiquity raised a bit more than $35 million.

Mojio connect cars to the cloud via its OBDII plugin devices. Mojio includes built-in connectivity and a GPS in its unit (Vs. Bluetooth and smartphone). It uploads hundreds of data points about the car every minute, tracking everything from the brakes to the locks. Everything is available for developers on Mojio’s open source platform. It then uses these data points to provide connected car services in partnership with apps like Concur to measure gas mileage and Glympse for GPS tracking.

Page 16: IoT services in the automotive sector

Next opportunities

Security As The Main Challenge To OvercomeContinuous Customer Relationship

+ IoT services in the automotive sector

Page 17: IoT services in the automotive sector

Security As The Main Challenge To Overcome

Securing both hardware and software in the car against hacking

Central telematics systems Vs. Closed circuitsMany embedded systems that have not been designed to be connected to the outside world, are wired to other systems more vulnerable. So, how should mission critical software be wired to other software in the vehicle to ensure both security and efficient updates? Some will advocate in favor of privacy by design creating closed circuits, while others will be less conservative and will design central telematics systems

IHS, Emerging Technologies: Big Data in the Connected Car, Nov 2013Morgan Stanley, Self-Driving the New Auto Industry Paradigm, Nov 2013

Page 18: IoT services in the automotive sector

Security As The Main Challenge To Overcome

Building interfaces & security standards for the Connected Car

Most car manufacturers and OEMs believe that there is strength in unity. British Telecom has announced the launch of an ethical hacking service: a new security service developed to test the exposure of connected vehicles to cyber-attacks. The objective is to include suppliers, IT security specialists and certification bodies to build the security standards of tomorrow.

IHS, Emerging Technologies: Big Data in the Connected Car, Nov 2013Morgan Stanley, Self-Driving the New Auto Industry Paradigm, Nov 2013

Page 19: IoT services in the automotive sector

Toward a Continuous Customer Relationship

It is a perfect opportunity to create more value and to enhance brand loyalty. Service providers are encouraged to explore open platforms for the production of apps that bring innovation to all users: drivers, OEMs and all the automotive players.

In terms of value creation, services are becoming far more important than hardware. In this new paradigm, customer relationship goes far beyond the sale.

Page 20: IoT services in the automotive sector

Sources

gartner.com/newsroom/id/2636073

hbr.org/2014/07/how-the-internet-of-things-changes-business-modelsbusiness.time.com/2014/01/07/your-car-is-about-to-get-smarter-than-you-are/forbes.com/sites/eliseackerman/2014/12/11/freescale-talks-about-its-sweet-spot-the-growing-market-for-connected-cars/

businessinsider.com/connected-car-is-next-digital-platform-2015-2#ixzz3WqCnR29M

techcrunch.com/2015/01/31/how-connected-cars-have-established-a-new-ecosystem-powered-by-iot/wired.com/2015/05/feds-say-banned-researcher-commandeered-plane/marketwatch.com/story/bt-launches-ethical-hacking-service-to-enhance-the-security-of-connected-cars-2015-04-20