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Jun 30 2016

Connected cars, connected customers

Enroute to 5G Nokia
Twitter: @AlbertoLotti1

Given today’s connected lifestyle, it is no secret that connected cars have the potential to revolutionize the automobile sector and the driver experience. In fact, Gartner has predicted that 80% of cars built around the world by 2020 will be able to connect to the Internet. Internet connectivity to cars is attractive to automakers for several reasons, including collecting data from the vehicle, preventive maintenance, push over-the-air software updates, and improving car safety. However, carmakers need to assure a strong business case for this line of innovation and know whether the technologies they embed in their vehicles will be reliable, private, and secure. First, they must understand the key benefits, opportunities, and challenges in producing the connected car.

Opportunities

To begin, “big data” can bring great opportunities for automakers. Real business value can be created from the massive information generated through onboard devices and applications built into cars, which can be used to enhance the customer experience. According to McKinsey, the auto industry is the world’s second largest generator of data. Imagine the potential automakers have to convert that data into valuable information for applications such as preventive maintenance.

A major benefit of the ongoing digitization of automobiles is that, similar to the way telecom companies keep smartphone apps updated, carmakers can collect data from vehicles to push over-the-air updates, which can also cut cost and time. Customers can save on bigger expenses down the road if carmakers can anticipate failures and send customer alerts whenever a small bit of preventive maintenance occurs. For example, US-based Tesla Motors regularly updates firmware and software for its vehicles remotely using wireless technology, which can prevent the need for recalls caused by software vulnerabilities. By warning drivers to replace parts, or even fix certain problems remotely, brand loyalty and profitability can be significantly increased.

Not only can manufacturers and customers benefit from connected cars – insurance companies, car rental, leasing and car-sharing companies can too. By analyzing customer’s driving habits from big data, insurance companies can determine premiums or lower interest rates. Car rental leasing and car-sharing companies could use connected technologies to track and maintain their fleets.

Challenges

Although connected cars are appealing, there are concerns that come with these technologies. The primary challenge that manufacturers face before they can fully embrace the idea of networking their car is trusting that their customers’ information and vehicle systems will be safe and secure. Connected trust is going to be particularly important with the rise in the Internet of Things (IoT) as it is estimated that by 2020, 30 billion devices and sensors will be interconnected.

The three main areas of vulnerability for connected cars are: communication protocol(s) used to relay commands to in-car actuators and to collect data from in-car sensors, software and firmware of the electronic components in the car, and IoT platform managing the connected car.

How to deploy profitable connected car services

To make the connected car business case, a management platform for multiple connected cars use-cases is needed. Thus, connected car services no longer require dedicated backend infrastructure, but a single management platform is able run multiple use-cases. In this way,  the costs are shared among the different use-cases, the revenues are incremental, and the business case can fly.

About security

Automakers can leverage the experience acquired by mobile telecom industries for the answer. Those companies have been managing millions of connected devices for decades and have learned that any software remotely accessible requires three main features to be secure:

  • Authentication – a process for verifying user identities
  • Confidentiality – the assurance that only intended receivers can read a particular piece of data
  • Integrity – trust that data has not been altered, intentionally or unintentionally, between sending and receipt or over time.

Each of these can be applied to the connected car to ensure its sensors remain safe from tampering, that the data it generates stays private and secure, and the overall platform managing the car as an endpoint — as a digital device — retains its integrity. The methodologies for doing this are all well established in the mobile device world and fully applicable to the automotive industry. With the right IT infrastructure, carmakers can successfully deploy technologies to ensure security for connected cars.

To learn more about the vision of the connected car and how to make it real, read Driving a digital endpoint.

Find out more about Nokia’s solutions for the automotive industry .

Did you know?

This week at 5G World Summit in London, Nokia is showcasing commercially-available technologies that operators can acquire today in order to lay the groundwork for 5G networks that will drive the digitization of basically every industry – be it healthcare, manufacturing, logistics, automotive, tourism, entertainment or media.

Share your thoughts on this topic by replying below – or join the Twitter discussion with @nokianetworks using #connectedcar #IoT

About Alberto Lotti

Alberto leads the vision and direction for the automotive market at Nokia. He brings over thirty years of international experience in communications and networking, including leadership of technical solutions and innovation teams. Alberto is also a regular speaker at industry events and conferences.