Stijn Schuermans, senior business analyst, VisionMobile, takes stock of the emerging market in automotive apps.
It is almost scary how closely the automotive app space of today resembles mobile apps in the telco-dominated world of 2008.
In many cases, we can draw a one-on-one parallel between automotive apps and pre-iPhone mobile apps. QNX is the new Symbian. GENIVI is the new LiMo. Windows Embedded Automotive is the new Windows Mobile.
Just like mobile operators in 2008, carmakers are very hopeful that apps under their control will bring significant new revenue streams from value-added services.
The car app market is not yet viable
However, automotive apps are still a minefield for developers. App developers face enormous fragmentation, small addressable markets and high friction in the distribution and monetization of their software. To be sure, there are multiple ways to develop apps for connected cars and to take them to market. But none one of these ways is yet mature enough to create a viable app market.
This point is driven home by the example of Pandora. The Internet radio’s automotive app is crucial to the company as half of all radio listening in North America happens in the car. This has driven Pandora to aggressively pursue a presence in the car over the past three years, with relative success.
Today, the Pandora app is one of the most popular and often among the first to be announced on new car models. However, this success has come at a great cost, requiring Pandora to partner with more than 30 major car brands and aftermarket manufacturers, and to create native integrations for almost every one of them. Even then, the four million unique users that Pandora has in the car are but a small percentage of Pandora’s overall user base.
A tipping point draws near
Back in 2008, the same high-friction situation with mobile apps provided fertile ground for a revolution led by industry outsiders: Apple with iOS and Google with Android.
The recent introduction of Apple’s CarPlay and Google’s Open Automotive Alliance seems to spell a similar direction for the automotive industry. And there is a realistic possibility that Apple and Google will break open the car app market and sweep away the existing app platforms with a dominant, over-the-top solution, just as they did in the smartphone world.
To stay in control, carmakers will have to unlock the potential of third-party developers and break the trade-off between driver distraction and openness for novel app ideas. The eventual platform winner will construct an app acceptance process that is open, fast, smooth and efficient enough to last mere days, and at the same time guarantees driver safety.
Can carmakers apply the lessons from the mobile telecom industry to fix the broken car app ecosystem?
Stijn Schuermans, senior business analyst, VisionMobile, a market analysis and strategy firm.
For all the latest telematics trends, check out Content and Apps for Automotive Europe 2014 on April 8-9 in Munich, Germany, Insurance Telematics Europe 2014 on May 6-7 in London, Telematics India and South Asia 2014 on May 28-29 in Bangalore, India, Insurance Telematics Canada 2014 on May 28-29 in Toronto, Telematics Detroit 2014 on June 4-5 in Novi, Michigan, Advanced Automotive Safety USA 2014 on July 8-9 in Novi, Michigan, Insurance Telematics USA 2014 on Sept. 3-4 in Chicago, and Telematics Munich 2014 on Nov. 10-11 in Munich, Germany.
For exclusive telematics business analysis and insight, check out TU’s reports: Insurance Telematics Report 2014, Connected Fleet Report 2014, The Automotive HMI Report 2013 and Telematics Connectivity Strategies Report 2013.
April 2014, Kempinski Hotel, Munich, Germany
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