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Connectivity Strategies and App Monetisation to Offer New Opportunities for Automotive OEMs, Finds Frost & Sullivan


News provided by

Frost & Sullivan

30 Oct, 2012, 11:00 GMT

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- Consumer willingness to pay for next-generation HMI and smartphone-like interfaces inside cars to generate sizeable revenues

LONDON, Oct. 30, 2012 /PRNewswire/ -- There has been intense speculation within the automotive industry about an app-based approach and the designing of dedicated application stores that house applications catering to all in-vehicle needs. However, OEM unwillingness to cede control over in-vehicle infotainment systems has been touted as the major reason behind the slow acceptance of app-based models.

Now, however, acknowledging evolving end-user needs, OEMs have targeted human machine interface (HMI) technologies. These technologies not only allow the provision of such services in a safe way but also promote brand differentiation and revenue growth.

New analysis from Frost & Sullivan (http://www.automotive.frost.com), Strategic Comparative Analysis of European and North American Automotive OEM Connectivity, Infotainment, and HMI Strategies, finds that major OEMs in Europe and North America are moving towards an app-based infotainment approach where smartphones serve as the core of infotainment systems. Consumer willingness to pay for the next-generation HMI and smartphone-like interfaces inside cars will create new revenue streams.

"OEMs are keen on developing vehicle-centric application stores," notes Frost & Sullivan Senior Research Analyst, Krishna Jayaraman. "The availability of broadband internet in the car will be crucial for a viable business model centred around content and apps delivered to cars; this ensures high throughput, low latency, and lower costs."

With the rise of smartphone replication technologies, there is a high possibility that OEM app stores will be restricted to vehicle-centric features like diagnostics, navigation, tyre pressure monitoring, and other location-based services.

Infotainment features like Internet radio, social networking and media are more likely to reside on smartphones as redundancy of downloads and payment will bother consumers. eCall mandates will have a positive response on app store models with connectivity being a major part of service portfolios.

"App stores will require a number of activities, application development by partnering with third party app developers, service provision, and platform support," remarks Jayaraman. "While it is evident that revenues will be shared between multiple participants, OEMs control on the content provision, ergonomics, and HMI will definitely open new, revenue yielding business models."

The need of the hour is open architecture development – systems which offer scalability, flexibility and customisation. Also needed are new business models with new interactions and payment models as well as innovative user interfaces that improve safety and brand positioning.

If you are interested in more information on Frost & Sullivan's latest study Strategic Comparative Analysis of European and North American Automotive OEM Connectivity, Infotainment, and HMI Strategies (M873), please send an e-mail with your full contact details to Katja Feick, Corporate Communications, at katja.feick@frost.com.

Strategic Comparative Analysis of European and North American Automotive OEM Connectivity, Infotainment, and HMI Strategies (M873-18)  is part of the Automotive & Transportation Growth Partnership Services program, which also includes research in the following areas: European and North American Automotive Human Machine Interface Market, European and North American Markets for Display and Instrument Clusters and Impact of Smartphones and Apps on the European and North American Infotainment Market. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, works in collaboration with clients to leverage visionary innovation that addresses the global challenges and related growth opportunities that will make or break today's market participants.

Our "Growth Partnership" supports clients by addressing these opportunities and incorporating two key elements driving visionary innovation: The Integrated Value Proposition and The Partnership Infrastructure.

  • The Integrated Value Proposition provides support to our clients throughout all phases of their journey to visionary innovation including: research, analysis, strategy, vision, innovation and implementation.
  • The Partnership Infrastructure is entirely unique as it constructs the foundation upon which visionary innovation becomes possible. This includes our 360 degree research, comprehensive industry coverage, career best practices as well as our global footprint of more than 40 offices.

For more than 50 years, we have been developing growth strategies for the global 1000, emerging businesses, the public sector and the investment community. Is your organisation prepared for the next profound wave of industry convergence, disruptive technologies, increasing competitive intensity, Mega Trends, breakthrough best practices, changing customer dynamics and emerging economies?

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Contact:
Katja Feick
Corporate Communications – Europe
P: +49 (0) 69 7703343
E: katja.feick@frost.com
http://www.frost.com
www.twitter.com/frost_sullivan

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