In the second of a two-part series, Siegfried Mortkowitz reports on long-tail apps and the value of knowing the habits and preferences of end users.
If car OEMs are able to overcome their fears, one can foresee a time when a car owner will simply go online to purchase and download an app for his vehicle, which will take the job of choosing content out of the car maker’s hands and let the market determine what content is made available where. (OEMs would still control critical services, verify if applications are safe to use in the car and ensure a uniform branding experience.)
ABI Research’s Dominique Bonte foresees the creation of automotive application stores which clients log on to and simply choose services and content, as they currently do with hardware, books and other products. “They would offer a selection of all the needs for all the users,” Bonte says. “Why offer only 20 apps? Let’s open it up, provide APIs and let the application providers decide if they want to provide content for us. Let it be their decision, their effort. And let the market decide.”
This approach would unlock the potential for all manner apps, including a number of niche, so-called long-tail applications, which appeal to only a small number of end users, such as off-road navigation. However, opinion in the business is currently divided about the value of such an approach.
Chasing the long tail
At a discussion during Content & Apps for Automotive Europe 2013, a Telematics Update conference held in Munich in June, Reinhard Jurk, head of business development for BMW, spoke firmly against their utility in the connected car.
“As some smart guy said, ‘A mobile phone is designed to get the full attention of the customer. A car is designed to be driven,’” Jurk said. “So we don’t need all those long-tail applications you find in an app store. We need the applications that you need while driving, and these are centered around navigation, entertainment, [how to] find your way around and stuff like this. That’s the differentiator between an automotive apps store and any [other] apps stores out there.” He maintained that confronting a prospective car buyer with a wealth of apps to choose from is an unnecessary burden.
Jurk was countered by Renault’s Emmanuel Bonbon, who said: “Regarding the driver, you are not going to invent so many applications as you have in apps stores. But I still think we have a very wide field in front of us, which we’re just now starting to dig.” Bonbon pointed out that the driver was often not the only person in the car and that passengers would be interested in apps that are not essential to driving the car. “We’re already starting on one app that’s not for the driver,” he said. “It’s for the rear passenger, for children. We think there could be a lot of business there.”
Bonbon said that minor changes created by an app could make a great difference in the experience of being in a car — as, for example, its sound. “Sound is really important, and the sound in the car is going to change,” he said. “How are we going to manage sound in the car? You can have sound for radio, for music, for whatever. I’m not going to tell you about the apps we will have in the future. But a car must be a continuous place to live.” He insisted that there should not be any limitation on the availability of apps for connected cars. “It will never be a million applications — that doesn’t mean anything,” he said. “But it must not be [only] five that you should want, which is just ugly. It must be as open as possible.”
Know thy customer
While it is too soon to say if targeting content according to the character of the customer base is viable or even desirable, there is one area where service providers and OEMs could benefit from knowing the habits and preferences of end users — advertising. Siegfried Schuler, director connected services, technical sales Europe, at Harman’s automotive division, says his company has begun analyzing data from the use of its only app, Aha, which offers 40,000 streaming on-line radio stations as well as audio books.
The app can be used via a smartphone, through which it is connected to the car’s head unit, or it is integrated in the head unit itself. The end user can then select his or her preferred stations and make them easily accessible as presets. OEMs currently providing the Harman Aha app include Porsche, Ford, Honda and Chrysler, Schuler says. Since the app is free to the end user, and the car maker pays only a small royalty fee, Harman is looking to advertising as its principal source of revenue from the service, Schuler says.
To that end, the company has begun analyzing the use of its app to mine it for data to target advertising according to the popularity of the stations. “We could sell the information from our analysis to providers of other products who wish to target their ads,” Schuler says. “For example, we could say that 80 percent of drivers listen to this channel. That is valuable information for advertisers.”
In addition, the information from the end-user analysis could also be used by car manufacturers to target advertising about its own products and to better understand the people who buy their cars, he notes. The aim, Schuler says, is “to give everyone what they are interested in.”
(For part one of this series, see Telematics and content sourcing strategies, part I)
Siegfried Mortkowtiz is a regular contributor to TU.
For all the latest telematics trends, check out Telematics Japan/China 2013 on Oct. 8-10 in Tokyo, Telematics Munich 2013 on Nov. 11-12 in Munich, Germany, Telematics for Fleet Management USA 2013 on Nov. 20-21 in Atlanta, Georgia, Content and Apps for Automotive USA 2013 on Dec. 11-12 in San Francisco, Consumer Telematics Show 2014 on Jan. 6, 2014, in Las Vegas.
For exclusive telematics business analysis and insight, check out TU’s reports: Telematics Connectivity Strategies Report 2013, The Automotive HMI Report 2013, Insurance Telematics Report 2013 and Fleet & Asset Management Report 2012.