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All rights reserved. @2015. Ellis & Associates.
I’m not a car guy; I’m a software
guy and I work with cars. November 11, 2015
All rights reserved. @2015. Ellis & Associates. Slide 2 of 16
Open
Who am I?
I’m a developer.
All rights reserved. @2015. Ellis & Associates. Slide 3 of 16
Why suppliers are engaged in the automotive segment
~100 Million new vehicles sold every year
~1 Billion vehicles on the road today
~1 Trillion $ in yearly revenues are projected to be generated in the automotive segment in 2020
All rights reserved. @2015. Ellis & Associates. Slide 4 of 16
• A 2013 study by IHS Automotive predicted that "connected car systems will yield approximately $14.5 billion in revenue from automotive data … by 2020."
What’s the big deal?
• Data found in the connected car come from: diagnostics, location, user experience/feature tracking, adaptive driver assistance systems/autonomy and more.
• When people are out driving, they're likely on their way to purchase something, or at least to stop off at, say, a Starbucks for a coffee.
User data based on location, intentions, and preferences is gold to marketers and money to anyone that can harvest, analyze, and process it.
All rights reserved. @2015. Ellis & Associates. Slide 5 of 16
Many are interested in automotive data…
Representative sample only. Not intended to imply a complete list of companies.
All rights reserved. @2015. Ellis & Associates. Slide 6 of 16
How they are getting it today…
There are significant challenges with OBD dongles.
All rights reserved. @2015. Ellis & Associates. Slide 7 of 16
Drivers & Occupants are Captive Audience • Cars are inherently mobile with Americans spending an
average of 1.2 hours a day traveling between locations and an average of 38 hours a year stuck in traffic.
• OEMs are beginning to respond with solutions that leverage cellular technologies as part of their long-term strategy for infotainment systems. • Current dashboard infotainment systems are mostly terrible
and are very limited in capability compared to counterparts such as the smartphones and phablets.
Data Source: GSMA, 2014
OEM actions to date are piece meal and continue to focus on initial owner, not long-term value of vehicle & customer.
All rights reserved. @2015. Ellis & Associates. Slide 8 of 16
What are you worth (just your internet traffic)?
Data Source: PrivacyFix, E&A 2013
Note – single desktop, does not include work issued laptop, home laptop, mobile phones, iPad_1, iPad_2 etc.
~$5,500
All rights reserved. @2015. Ellis & Associates. Slide 9 of 16
It is therefore no wonder Apple & Google are doing what they are doing.
But what are they doing?
All rights reserved. @2015. Ellis & Associates. Slide 10 of 16
Chevy MyLink
Cadillac CUE
Kia UVO
Mercedes mBrace2
Toyota Entune
Audi Connect
OnStar
25+ Connected
Solutions
All rights reserved. @2015. Ellis & Associates. Slide 11 of 16
One solution, all vehicles
All rights reserved. @2015. Ellis & Associates. Slide 12 of 16
Chevy MyLink
Cadillac CUE
Kia UVO
Mercedes mBrace2
Toyota Entune
Audi Connect
OnStar
Toyota
Chevy
Kia
Cadillac Audi
Mercedes
GM
All rights reserved. @2015. Ellis & Associates. Slide 13 of 16
What will be the impact on devices? Hardware High. Expect higher-end components and faster refresh rate.
Display High. Expect higher-end components and richer characteristics.
OS Minimal other than pricing pressure.
Phone Minimal other than pricing pressure.
Connectivity High. Expect higher-end technologies (e.g., USB 3.0, NFC, WiFi Direct).
Media Medium. Continued OEM solution but pricing pressure will be high.
Navigation High. Continued OEM solution but pricing pressure will be high.
Loyalty High. Continued deterioration of the OEM brand as customers increasingly interact with their digital mobile life ecosystem.
All rights reserved. @2015. Ellis & Associates. Slide 14 of 16
What will be the impact on ecosystems? media consumption Going hard after the establishment
gaming Going hard after the establishment
social networking Required for completeness; but desire stickiness
blogging Minimal impact
email Minimal impact
file sharing Required, minimal impact
reference Required, minimal impact
search Going hard after the establishment
browsing Going hard after the establishment
mapping Going hard after the establishment
shopping Going hard after the establishment
instant messaging Going hard after the establishment
telephony Required, minimal impact
All rights reserved. @2015. Ellis & Associates. Slide 15 of 16
Who’s next is any one with a digital life mobile ecosystem, including …
All rights reserved. @2015. Ellis & Associates. Slide 16 of 16
But what really is the impact?
All rights reserved. @2015. Ellis & Associates. Slide 17 of 16
Zero $ / £ / € Car
All rights reserved. @2015. Ellis & Associates. Slide 18 of 16
Headlight
Rain
Wiper
Barometer
Traction Control
Microphone
Representative. Locations and specific sensors are meant to be descriptive.
Clock
All rights reserved. @2015. Ellis & Associates. Slide 19 of 16
Headlight
Rain
Wiper
Barometer
Traction Control
Clock
Microphone
Representative. Locations and specific sensors are meant to be descriptive.
All rights reserved. @2015. Ellis & Associates. Slide 20 of 16
Sample data extracted from IVR system of cars on road today
All rights reserved. @2015. Ellis & Associates. Slide 21 of 16
There’s so much more “value” here than just a pretty word cloud…
All rights reserved. @2015. Ellis & Associates. Slide 22 of 16
Scenario One – Sensors @ Dealers Base Price $ 40,000
Package 1 $ 6,000
Sub-total $ 34,000
Package 2 $ 4,000
Sub-total $ 30,000
Total $ -
All rights reserved. @2015. Ellis & Associates. Slide 23 of 16
Scenario Two – Ecosystem Subsidy
Base Price $ 25,000
Subsidy - Year 1 $ 5,000
Subsidy - Year 2 $ 5,000
Subsidy - Year 3 $ 5,000
Subsidy - Year 4 $ 5,000
Subsidy - Year 5 $ 5,000
Total $ -
All rights reserved. @2015. Ellis & Associates. Slide 24 of 16
Summary
• First vehicles are expected in market in mid-2015.
• Expect high scrutiny on sales impact along with continued scrutiny on support and SW update / security issues.
• Over 20 OEMs have publicly stated support for integrating Apple & Google including Ford, GM and VW.
• Value of driver will increase over time so expect to see other mobile ecosystems (especially China) follow Google & Apple.
• Significant disruption to the broader automotive ecosystem as we know it today.
• Aftermarket is under-exploited but recognition is growing quickly for how to bring in technology modifications (e.g., Pioneer, Voxx).
• All industries tangentially related to automotive will be significantly and materially impacted (e.g., music, finance, insurance)
All rights reserved. @2015. Ellis & Associates. Slide 25 of 16
Thank You.