Proving the Business Case for the Internet of Things

Connected car features heavily influencing vehicle purchases: Parks

Iain Morris
July 31, 2014
More than three quarters of US vehicle owners with at least one connected car feature believe these services will influence their next vehicle purchase, while more than half rate connected features as “very important” in guiding their new vehicle purchase, according to new research from Parks Associates.

“Over 80% of US broadband households with a mobile phone service have a smartphone, which is a gateway device for connected cars,” said Jennifer Kent, a senior analyst with Parks Associates. “Smartphones have raised expectations of what connected devices can do, and Google [Mountain View, CA, USA] and Apple [Cupertino, CA, USA] are among the companies trying to build on those expectations in the connected car space.”

According to the market-research company, the most common connected car feature is the ability to make phone calls using a car’s built-in Bluetooth connectivity, but the most desired feature is the ability to view maps or receive directions.

Parks also points out that Google has announced its Android Auto connected car solution will become available at the end of this year, while Apple already has more than 25 models committed to using its own CarPlay offering, which is intended to extend a user’s iPhone functions into the vehicle.

“Apple and Google are vying to be the consumer touch point for connected applications and services, and that competition has naturally extended to the automotive space,” said Kent. “Both of their solutions bring their mobile operating systems to the car through a ‘mirroring’ approach that lets the user control certain smartphone functions and apps through the car’s display, physical buttons, or voice control.”

The research also indicates that smartphone users are far more likely than non-smartphone user to find connected car services appealing.

Some 37% of vehicle owners in US broadband households are very interested in the ability to view maps or receive directions, indicates the research, but the percentage rises to 48% among smartphone owners.

According to Parks, usage-based insurance programs are set to grow rapidly over the next five years, even though they currently represent less than 5% of all private passenger auto policies in the US.

Analysts believe the auto and insurance industries will move quickly to leverage the vehicle performance and driver behavior generated by connected car solutions.
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