Smartphones are now able to link to vehicle infotainment systems but automakers will be controlling the data that technology partners such as Apple and Google can get access to. Automakers are starting to find ways to monetize the information generated from these systems. They have the potential to gain billions of dollars in e-commerce.
Smartphone use has already generated money for Apple and Google. They offer different products and services, ranging from digital music to targeted advertising. But with the linking of phones and car systems like with Apple's CarPlay and Google's Android Auto, they will be able to extend their reach even farther.
However, auto companies want to limit what tech providers are able to access. Computer systems in cars are capable of acquiring a ton of possibly profitable information. Several automakers have stated that data from the functional systems of the car won’t be given to Apple and Google. Examples are data on steering, throttle, and brakes.
They also won’t get access to details like range. Don Butler, Ford Motor's executive director of connected vehicle and services, said that the automakers must control who gets access to these data. They also have to “protect” their ability to create value from new digital services that are based on vehicle information.
There are high stakes for who can access these data. Earlier this year, General Motors informed investors that it anticipates getting $350 million more in revenue in a span of three years from the high-speed data connections that are being installed in its cars. According to consultant AlixPartners, the global revenues from digitally connected cars will increase in value from $16 billion in 2013 to $40 billion a year globally by 2018.
Automakers have every reason to keep as much of that revenue as possible. Friedmar Rumpel, vice president in AlixPartners' automotive practice, said that future revenue stream is placed at risk if the companies surrender their control and others figure out this business model. There are various ways for auto companies to profit from the vehicle information.
For example, they may entice owners to approach their dealerships with their offer of travel planning services, auto repair and services. In addition, they may work with insurance firms by providing data that will enable insurers to provide rates depending on how a driver behaves behind the wheel.
Numerous automakers plan to use CarPlay and Android Auto systems so that it comes safer and easier for drivers to make use of the apps on their smartphones during driving. But there are some automakers that have developed their own systems. Ford is putting in Sync 3, a proprietary system that could supplement as well as work with CarPlay and Android Auto.