Beyond the smartphone on wheels

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Carmakers used to call connected cars “smartphones on wheels.” They were keying in on the idea that the vehicles would deliver the same breadth of connectivity, range of mobile applications, and ease of use as your smartphone.

Headlines touted the idea as far back as 2013. In March of that year, Fast Company published a story headlined “Why Your Car Is Now A Giant Smartphone On Wheels” that looked at the work of General Motors’ Global Connected Consumer unit. Fast-forward a couple of years and you could see other auto-industry opinion leaders adopting the term, such as Dr. Dieter Zetsche, former CEO of Mercedes-Benz, talking in 2015 to the BBC about his company’s connected-car strategy. And Tesla has been leading the industry with over-the-air updates for its vehicles for years, eliminating the need to visit a service center for a vehicle software update.

It’s easy to see why car makers explained their strategies using a smartphone analogy: they were just starting to understand what kinds of connected services consumers would want and use in their cars. But we’re a few years on from that initial digital vision setting and it’s now clear that the idea of the smartphone on wheels isn’t sufficient to describe the power and range of what connected cars will accomplish for the industry and the consumer.

A new digital in-car experience

The value proposition of the connected car has expanded dramatically beyond something that just helps consumers explore different ways to listen to music or make phone calls while they drive. It underpins a whole new in-car and beyond-the-car experience that is not only about infotainment but also covers everything from in-car shopping (i.e., “Alexa, make my usual order for groceries and have them delivered to the trunk of my car this afternoon”) to remote management and monitoring (alerts about where your teenage child is traveling) to managing the semi-autonomous and autonomous driving modes of new generations of cars to using a growing array of sensors, arrays, and analytics tools to keep drivers and their passengers safer.

The average car now contains more than 100 million lines of programming code to drive not only the vehicle components but also its many digital services. In the future, we expect to see this increase exponentially.

The reason is simple: it’s about creating the end-to-end experience consumers expect.

The lines between experiences will blur as services such as Alexa and Siri continue to connect your home, your vehicle, and your life. Digital services will find and pay for your parking, pay for your Starbucks order, and remind you to change the filter in your furnace at home. The connected vehicle will be a platform to unify and connect multiple aspects of your life and the introduction of autonomous vehicles will only help that trend rise.

And one further paradigm shift is coming: vehicles will use AI to anticipate and incorporate capabilities and services before consumers even realize they want them.

A different way to define brand

A compelling question is how automotive manufacturers will leverage pervasive digital connectivity to update and enhance the value of their unique brands. Carmakers will need to differentiate a vehicle and its traditional features, connectivity, and integration to the customer’s connected life. Increasingly, customers will make buying decisions based on factors such as “Does this vehicle support Android or iOS?” in addition to the traditional choices such as fuel economy/charge range, cargo capacity, etc. The definition of connected brands is where the future of the auto industry will be won or lost. Its importance cannot be understated.

And understanding the needs of the customer – creating the right experience end-to-end by adjusting offerings to differentiate, attract, and retain that customer – is what is most important to retain customers and attract new buyers.

Manufacturers need to ask themselves the big question: what role do they want to play in urban mobility? And how do they make money and create value in that urban mobility ecosystem?

A new connection with customers

A key part of the answers to those questions lies in the redefined relationship between automakers and the customers who own and use their cars. How much of the success of that new relationship will come from the products, the services, and the platform they build to support them? Equally, what contributions do the technology, the partnerships, and the ecosystem supporting the customer make?

I think the winners will find a way to create frictionless value throughout the whole life cycle – a way to attract customers and retain customers while also having value-added relationships with others in the ecosystem to drive the profits they need to keep their companies going.

The carmaker of the future

What will a carmaker look like in 15 years when all these technologies are proven and at scale? I think finding the answer to that question is what keeps them up at night. It’s really about moving from being a product-oriented company to a solution provider, a platform provider, and a mobility company within a much more connected ecosystem.

To learn more about Capgemini’s automotive practice, contact Mike Hessler, North America Automotive and Industrial Equipment Lead, at michael.hessler@capgemini.com.

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