By Luis Quiroga
One of the biggest technological advances in the history of automobiles is just underway. While estimates show that less than 4 percent of all cars currently on the road can connect to the internet, the market for such cars is growing about 10 times faster than the overall car market.
So what makes a car “connected?”
A connected car is one that brings together communications technologies, information systems, and safety devices to provide cars with increased enhancements. It might start with a car that can access or “tether” your smartphone, enabling you to listen to a favorite playlist or stream traffic information while driving. The next step consists of embedding this technology in the car’s own computer system, so that drivers can be alerted to auto company recalls or parts that might need replacing.
But the real endgame represents nothing less than the future of transportation: a driverless car that picks you up, drives you home safely, and parks itself. And the future looks bright for automakers, as experts predict that by 2020 roughly three quarters of the 90 million cars shipped around the world will have some form of internet connection hardware, translating into revenue of more than $2 trillion.
Today, a car with its own internet connection will run you about $55,000, compared with a non-connected-car’s price of $31,000, making for a significant add-on. But part of that discrepancy is the industry’s focus on connecting luxury vehicles first. (A glance at the brands currently offering such connected cars—including BMW, Mercedes, Audi, and Tesla—attest to that fact.) The inevitable push to get economy cars connected, combined with the predicted drop in the price of embedding cars with mobile connections, will likely bring down the price in coming years.
Other questions related to the growth of connected cars remain unanswered. For instance, such a huge increase in availability does not necessarily mean drivers will use the new technology. In fact, some experts predict that just 40 percent of connected car customers in the year 2020 will actually use the service.
And then there’s the matter of car dealer training, since the technology of a connected car will likely require at least a couple hours of intense education so that dealers can show their potential customers how the technology works. Customers will also have to consider billing issues: Will your mobile provider take on the billing for your new “smartphone on wheels,” or will the cost be part of your car payment? What about safety concerns? Will the New Jersey Turnpike have Wi-Fi? Connected cars , like smartphones, have the potential to be an important part of a consumer’s connected life, but that future isn’t certain.