As the consumer and financial world learns more of its connected car future, tech and automotive companies are forming new partnerships and upping investments to secure their share of projected revenue.
Research from McKinsey projects that new services — including on-demand mobility services and data-driven services like connected car applications, software and remote services — could create up to $1.5 trillion in additional revenue potential in the automotive industry by 2030. Naturally, everyone wants a piece.
Investments in the connected car space run the gamut from funding the technologies and in-car hardware and user-facing display software to creating the data centers, back-end systems and connections that will enable the connected car future to run smoothly.
BMW’s SVP of Digital Business Models Dieter May for one envisions the car becoming an extension of a home or a living room as self-driving technology comes to market — a locale for media consumption, relaxation and, of course, payments.
As cars become personalized digital platforms for content and services, Big Data management will be key to facilitating the in-car consumer experience.
For their part, global auto manufacturer Toyota recently announced a partnership with Japanese telco Nippon Telegraph and Telephone (NTT). The two companies will collaborate on researching and developing a global IT infrastructure to support the data generated by the connected car market.
In the release, Toyota noted that the collaborative effort will work to research the topology of global networks and optimal data center deployments for the handling the influx of connected car data, along with in-car technologies themselves.
Artificial intelligence, 5G connections and edge computing are among likely the connectivity and computing candidates. Toyota and NTT plan to announce preliminary results in 2018.
On the hardware end, Chinese internet and eCommerce marketplace giant Alibaba made the lead investment in smart car tech developer WayRay’s Series B.
The startup develops augmented reality (AR) technologies for the automotive industry, including transparent holographic displays. This technology has already been put to use in Navion, WayRay’s AR dashboard navigation system that overlays directions and other information onto a driver’s view of the road.
“We believe there is huge potential in the development of leading-edge technology like augmented reality and its application to various industries —like WayRay’s AR navigation system in the auto sector,” said Alibaba Group’s Senior Investment Director Ethan Xie. “The potential of augmented reality makes it an exciting and promising area.”
WayRay will also partner with Banma Technologies, the joint venture between Alibaba Group and SAIC, to create an AR navigation and entertainment system for an upcoming car that Banma plans to launch in 2018.
Smart devices, mobile applications and other technologies peripheral to the connected car are also seeing an uptick in interest.
Mobile provider Verizon is looking to expand its connected car offerings by adding a Wi-Fi hotspot to its Hum product line, said Fortune. The company is launching a device that plugs into a car’s data port, allowing drivers to monitor vehicle performance and maintenance while also broadcasting Wi-Fi.
Elsewhere, Panasonic led a $6.5 million Series A funding round in mobile automotive tech startup Drivemode. Drivemode’s mobile-based connected car platform allows users to access music, navigation features, calls and texts hands-free via the Android mobile app.
Drivemode will use the Series A funds to accelerate the development of new products and will increasing partnerships with content and service providers. Drivemode already has ties with Honda, playing a central role in Honda’s Silicon Valley Innovation Lab’s connected car integration.
Perhaps the biggest news in connected cars over the last few weeks came on the software side as Starbucks rolled out Alexa-powered voice ordering functionality from Ford’s SYNC3. In a nutshell, the feature allows voice ordering on the road.
Starbucks’ Chief Technology Officer Gerri Martin-Flickinger said, “It only takes a little imagination to think about where conversation ordering will show up next.”
Alexa has a digital presence, or soon plans to have one, in Toyota, VW and Hyundai models, to name a few. If this move by Starbucks is any indication, expect voice-activated coffee ordering to roll out across a number of vehicle brands sometime soon.
These various moves are just the latest in the rapidly growing connected car ecosystem. As investments in core hardware, software, data management systems and peripheral devices continue to grow, the key players and technologies will likely be the ones that enable seamless in-car payments within the broader connected car space.
Right now, it’s an Alexa-dominated playing field (by virtue of the fact that Amazon got to the voice-activated payments space first). But given the influx of investments in connected car tech research and development across the board, Amazon’s near-singular position likely won’t remain as such for long.
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