· Eight predictions of “digitalization” in the automotive industry

The technological development of the Internet is infiltrating into various fields, promoting technological upgrading of various industries, and even directly promoting changes in the competitive landscape of the industry. The most profound ones will lead to the disappearance or rise of an industry.
According to Strategy's analysis, the automotive industry ranks fourth in various industries around the world (summerly about fifteen industry types), penetration of interconnected technologies, or degree rankings. Second only to the financial and insurance industry, computer and electronics industry, media and communications industries.
So, we can see fascinating terms at various auto shows and media reports, such as Toyota's Entune (car navigation, entertainment and information experience integrated system), Ford's SYNC (that is designed for mobile phones and digital The media player is equipped with the Ford car multimedia communication entertainment system, Mercedes-Benz COMAND (cockpit management and navigation equipment), Audi's NVIDIA (NVIDIA, Audi's infotainment system) and so on. These are all innovative features that automotive companies have developed to meet consumer needs and enhance product experience.
The biggest feature of innovation in the digital age is that technological innovation drives demand, not demand to drive innovation. Breakthroughs in technical means have fostered the imagination of consumers' needs and experiences. Automakers are trying to give consumers more surprises through technological innovation.
Leading IT companies are also using their interconnected technology innovation capabilities to try to penetrate deeper into the automotive industry. For example, Microsoft and Ford cooperate to promote the application of Microsoft Azure cloud platform in the automotive industry; Google is not only developing and promoting driverless cars, but also working with Ford to develop APIs (Application Program Interfaces).
In general, the digital application of the automotive industry is mainly in two aspects, one is related to driving, including the safety and convenience of driving; the other is related to entertainment interaction, including audio-visual enjoyment, communication, life. Convenience and so on. In addition to automotive manufacturers, there are also traditional auto parts suppliers, IT and consumer electronics industries, and Internet content providers.
So, in the next few years, what will happen to the industry in the digital automobile era?
The eight predictions of Strategy:
First, the digital innovation related to car driving will be dominated by automobile manufacturers and first-tier component suppliers.
Different from the innovation of entertainment interaction, digital innovation related to car driving, such as car safety information display alarm, cruise control, parking assistant, night vision assistant, etc., mainly involves the core performance of the car, these performances need to be with the engine, gearbox When the core components are connected, it requires a strong experience in automotive products. In addition, some of these innovations are closely related to security and involve legal liability directly. Therefore, automakers or Tier 1 component suppliers tend to remain dominant in this type of innovation.
Second, the car driverless technology will be difficult to promote and apply on a large scale in the next 5-8 years.
While Google's driverless systems are making progress, reliability and legal regulations can be important barriers to this technology. The reliability of an automated car driving system still requires long-term verification. For example, in large-scale applications, how to ensure that the software system is free from virus infection, thereby avoiding major traffic accidents. Legally, the global legal system cannot keep pace with the development of technology. For example, the United States still requires vehicles to be completely under the control of the driver while driving. At the same time, if such a vehicle has an accident, how is the responsibility identified? Is it the responsibility of the driver, or should it be the responsibility of the car manufacturer and the software provider? Before the relevant legal issues are resolved, large-scale promotion and application will not be realized.
Third, automakers will remain cautious about in-vehicle applications (Apps).
In-vehicle entertainment applications, such as car Twitter/weibo, Facebook updates, etc., may cause further cautious attitudes to such applications due to car accidents that may affect the driver's concentration. The US Department of Transportation has issued guidance and recommendations, hoping that automakers can set up automatic functions to automatically stop social media applications, text messages, and dial ten-digit numbers when the car is in motion. At present, major manufacturers are also strengthening the development of voice-activated apps, which will keep drivers' attention to the road. It can be expected that voice control technology will have a wider application space in the car. At present, China's SAIC Roewe's InkaNet (an in-vehicle intelligent system) has made a preliminary successful attempt.
Fourth, IT and consumer electronics manufacturers will improve human-machine interaction technology (HMI), which will increase consumer expectations for HMI in the car.
Audier CEO Rupert Stadler said in 2012 that the pace of car development is that it cannot keep up with entertainment electronics. It takes about a month for our vehicle to go public. In the meantime, Apple can launch a five-generation iPhone to take BMW. Since the launch of iDrive in 2001, it has only been updated twice. It is currently the third generation iDrive. However, from now on, Apple has launched more than ten generations of iPhone. As a result, consumers are increasingly demanding human-machine interactions in the car, entertainment devices, or ports and systems that connect peripherals. In the future, some common technologies of electronic products, such as speech recognition, text information reading, direct manipulation, gesture change, human eye motion recognition and tracking will be favored by consumers. As another example, solutions that enhance display, head-up display, three-dimensional display, and proximity to a head-mounted display will also be desirable for use on a car display.
5. The quantity of the automobile industry is less than 5% of the consumer goods industry. It is relatively weak in the entertainment and interactive technology innovation, but the automobile enterprises still have strong negotiation capabilities.
Another major application of cars in the digital age is entertainment interaction. Because electronic companies are more accurate in grasping consumers, and because of the large scale of electronic products, they can share large R&D expenses through a large scale. For example, smartphones ship about 100 million units worldwide, and there are fewer than 25 million cars equipped with car entertainment interactive devices. As a result, the consumer goods industry's innovation capabilities in entertainment interactive hardware and software products are ahead of the automotive and parts industries. Therefore, we will be able to see more and more cross-industry strategic cooperation. But automotive products are at the core of the entire entertainment ecosystem (including wireless carriers, hardware vendors of vehicle computing systems, electronics manufacturers, software operating systems, research and development groups, Internet content providers and e-commerce service providers, etc.) Still more active. Automakers will be able to maximize their value by selectively introducing innovative technologies.
6. Consumers will be reluctant to pay for data and extra apps in the car.
In the future, it is more difficult for vendors to try to charge by providing more information and apps. For example, OnStar pays less than 60% in the second year of North America, and pays less than 50% in the third year. Mainly because consumers believe that other smart devices such as mobile phones can get relevant information and functions, and the cost is much cheaper. On the other hand, the value of consumers' current applications is not fully recognized, and the monthly fee system allows consumers to stop using it at any time without any disciplinary action.
7. In the future, only luxury brands can support a completely independent entertainment interactive system (flight cockpit mode), but usually the customer experience is not very good; the adoption of independent third-party software and hardware business model is the main strategy of each non-luxury brand.
There are three business strategies for car manufacturers' entertainment information systems. The first type we call the flight cockpit mode, that is, the car manufacturer is completely independent research and development, and does not rely on third-party suppliers. Such as BMW's iDrive. The second is to build a platform model, that is, car manufacturers rely on other software vendors on the system platform. For example, Microsoft provided SYNC for Ford and Entune technology for Toyota. The third is the common fragmentation of product features, such as common Bluetooth technology, applications, and so on. In general, luxury brands are happy to adopt the first model, mainly because they are differentiated from other brands and have unique technical characteristics. But the problem is that these luxury brands offer a customer experience reputation is not very satisfactory, such as BMW's iDrive learning how to spend a lot of time, drivers sometimes need to look at the screen to operate. Audi has similar problems, and the operation menu is too complicated. Ford, Toyota and Nissan are using the second model to work with professional companies. Human-computer interaction is relatively good, but the current voice recognition effect needs to be improved.
Eight, auto manufacturers will further extend the upstream and downstream of the digital value chain to continuously innovate business models and business types.
BMW recently established iVentures, which is mainly engaged in venture capital business. The investment target is a startup company for automotive mobile solutions, which further extends its reach to the upstream of the value chain. GM is working with Israel's Bezalel to pay attention to how Providing more solutions for rear passengers, especially children's entertainment; Ford and WellDoc collaborate to launch E-Health Monitoring service; Toyota and salesforce.com collaborate to launch Toyota Friend social network for Toyota owners, to the value chain The downstream has taken a new step. SAIC also plans to set up a venture capital company in Silicon Valley. There is reason to believe that each automobile brand has a large consumer group, and auto companies will further explore the commercial value of these customers, and new business models will emerge in an endless stream. From a technical perspective, innovative applications such as vehicle networks, mobile phones and automotive cloud links can also be expected.

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