The connected car: Tech's next gold rush

A potentially massive market is showing signs of progress.

connected car
Image credit: Google

Although it seems like an innovation that should have occurred years ago, the stage appears to be setting for the connected car to come to fruition, opening up a market that could surpass $131 billion in the next six years, according to a new report from Transparency Market Research.

The signs of this growth, which TMR forecasts at a 34.7% compound annual growth rate from 2013 to 2019, have materialized in the market slowly in the past year or so, with Chevy boasting in-car 4G LTE in TV commercials this summer. General Motors was hardly the first car maker to offer in-car LTE or Wi-Fi, joining the likes of Ford, Chrysler, and Audi in the race to meet a suddenly burgeoning demand. A J.D. Power and Associates survey from earlier this year found that 38% of respondents in the market for U.S.-built cars identified "the latest technology features" as a key selling point.

Greasing the wheels for this transition to a connected car ecosystem is a new set of Ethernet chips and software designed specifically for cars. As Computerworld’s Lucas Merian pointed out, Freescale’s Ethernet-focused connectivity suite for the car would mark a significant improvement over the more common CAT 5 cables and could open the door to a much more richly connected car. Not only will personal devices be able to connect to Wi-Fi, but the cars themselves could come equipped with connected devices, opening up an entirely new platform for applications.

These advances immediately bring to mind the basic content streaming and web browsing that could now be easier in the car. Parents taking their children on long road trips are surely excited to connect tablets or seat-mounted displays to Netflix or Amazon Instant Video, and the ability to stream Pandora or Spotify without running up a wireless bill or losing cellular coverage sounds like a death knell for the AM/FM radio. But the implications go much farther than that.

Wi-Fi connectivity for cars would make for a more accurate vehicle tracking systems, which could help combat auto theft and in emergency situations. In Brazil, a government plan to battle the country’s exceptionally high auto theft rates turned to vehicle tracking technology. This capability has long been available in the U.S. through add-on devices and services, but could become standard, and more effective, once cars are outfitted to accommodate high-bandwidth processes.

Beyond that, however, simply connecting cars to the internet means a new source of data showing where and how people drive. And where there is data, there will be advertisers ready to use it every way they can imagine. Connecting cars to the internet means digital advertisers could effectively re-double their efforts in the smartphone market. For example, digital beacon technology, which recognizes nearby smartphones and can push information like promotions or advertisements to them through Bluetooth low energy, is a huge opportunity for retailers and advertisers. It’s not a big leap to imagine a similar technology alerting drivers when they drive by their favorite fast food restaurants or retail stores.

Of course, a lot of details still need to be ironed out, the most important being how drivers react to the connected car. Beacons for smartphones are still untested waters, and it remains to be seen whether smartphone users will really take advantage of them. Whether people want to be subjected to promotions and advertisements while they’re driving is a big question. And there’s always the privacy issue, although that didn't really slow down progress in the smartphone market.

Still, the introduction of Ethernet technology designed for the car is an encouraging sign for a market that is ripe for growth.


Copyright © 2014 IDG Communications, Inc.

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