Welcome to the final post in this three-part series where we’ve been looking at the disconnect between developers and car manufacturers, and the roles played by each group. In this post, I’ll discuss the challenges still left in this delicately balanced ecosystem and the future of connected vehicles as a whole.
Despite improvements in the relationship between carmakers and the development community, there are still a number of challenges ahead if the connected car industry is to flourish and meet customer demands on services.
Manufacturers remain cautious toward the open app ecosystem
Despite great advances being made in the areas of data security and user privacy, a major challenge that persists comes from the automakers themselves. Essentially, manufacturers still have privacy concerns about an open app ecosystem. This fear stems from historical security breaches whereby malicious apps have had access to sensitive data. These kinds of security breaches damage the carmaker’s brand and, in turn, erode customer trust, which takes considerable time to rebuild. Approaching an open app ecosystem with caution is certainly advisable, however this approach can cause delays to the process of bridging the gap between developers and carmakers.
But it’s not just malware or security breaches that carmakers are afraid of. A desire to maintain apps and services of a consistently high quality is also a strong motivator. Manufacturers need their apps to be a true reflection of their brand and to match the existing expectations of their customers. For these reasons, the carmakers themselves like to retain a great deal of power over app development for their connected vehicles.
Finally, and understandably, it is no quick process gaining trust in such a long-established and traditional industry. This is not necessarily a bad thing; it’s simply the way it is. Developers need to ensure they work closely with carmakers to protect customers and ensure that their apps are not only brand-compatible, but also of the highest quality.
Payment models for services need more deployment
In many ways, apps created for connected cars are hitting the sweet spot of the market: tech-addicted millennials who are buying their first cars. These young people won’t be satisfied with a run-of-the-mill vehicle that simply takes them from A to B; they will be demanding a car that provides them the entire connected package and a driving experience that connects seamlessly to the rest of their online lives. For many of these, driver apps are seen as the obvious way to receive, send and share content such as music, navigation, news and recommendations — exactly the sorts of content and services apps within a connected car could offer on the move.
If they’re willing to build the right apps to target this particular group of young people — a group typically renowned for having a disposable income, as well as the time to spend it — app developers with their nose to the ground could build long-lasting and profitable businesses. In fact, a 2014 Deloitte study found that 52% of millennials — those born roughly from 1984 to 1995 — say they want apps on their dashboard.
However, despite the huge potential from this still largely untapped corner of the market, for many developers and third-party services it is still unclear how a connected car app or service charges its customers and turns a profit, not to mention what kind of payment models a third-party service might be able to expect from a carmaker in the first place. With these financial arrangements still largely unclear to everyday app developers, it’s no wonder that some are put off engaging in connected car app development and sticking with smartphone applications — which are, in comparison, relatively easy to monetize — instead.
Another financial reason which may be holding back regular app developers from getting involved in connected app car app development is the length of development time and testing time. These processes can be significantly longer for connected car apps compared to smartphone apps and for those developers working on a budget they simply don’t have the time to invest.
Carmakers need to make transition smooth for developers
In a more general sense, when we think of how to connect the worlds of development and carmakers, carmakers need to think practically about what they can bring to the table in terms of technology. Discoveries and innovation from third parties which lead to new products and services can only be made if there are ample software tools available for developers, as well as those crucial open APIs.
These resources come directly from individual car manufacturers and their availability is, ultimately, what will dictate the success or failure of their individual connected car enterprise. The more open APIs that are accessible to developers, the more varied services they can offer their customers. The more carmakers that realize this and respond to it with the right tools and software, the quicker we will see changes in connected car app development software.
Conclusion: Bridging the gap
Although we have come a long way in the last few years, there is still some way to go before we have fully bridged the gap between carmakers and third-party services and developers. Despite huge advances in technology, in order to bring these two parties together there needs to be more than simply the technical environment. There has to be a strong desire on both sides for collaboration and compromise, with initiatives coming from developers and carmakers, as well as incentives for all involved. For optimum collaborations and for companies to invest the time to start working with car data, there has to be minimal friction.
As we have seen, data privacy and security is still a huge concern for carmakers. Gaining trust of carmakers and consumers by proving the technology is fully secure will make it easier going forward to collaborate. This is already happening and the case for an open ecosystem is getting stronger by the day.
As things currently stand, the future for connected cars and the services that work in them is looking extremely positive. With the additional support of accelerators, incubators and hackathons, small businesses are getting the support — financially and in terms of technology — that they need to build and test their applications, plus the exposure to major car companies to get their projects off the ground and into cars. Increasing customer expectations are also putting pressure on the carmakers to shorten development and testing time, which again prompts them to promote and support connected car app development.
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