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Connected cars come to Asia

23 Jun 2014
00:00
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Cars - the biggest, most expensive, most complex gadgets that most people will ever own - are becoming connected, and market conditions are becoming aligned for the connected car to become a huge growth vertical for Asian mobile network operators.

Vehicles used to be mechanical, but now they are almost entirely electronic and come factory fitted with a range of computer components. Analogue radios and cassette players that were fitted in the dashboard of vehicles have been largely replaced by digital stereos and screens, enabling the display of highly visual multimedia, navigation and diagnostic information. All these components of modern vehicles benefit from a networked connection.

Indeed, instead of turning on FM or AM radio, it is conceivable that the next generation of car passengers and drivers will prefer to use their vehicle’s embedded connectivity to access audio entertainment apps, such as TuneIn radio or Spotify, or to mirror these smartphone apps in the in-vehicle infotainment (IVI) unit using technologies such as the Car Connectivity Consortium’s MirrorLink or Apple CarPlay.

Embedded antenna and modem systems will enable the best customer experience, particularly if antenna innovations such as multiple-in multiple-out (MIMO) technology are used. According to Analysys Mason’s report, ‘Connected cars: worldwide trends, forecasts and strategies 2014-2024’, Asia will account for half the passenger vehicles with embedded connectivity in the world in 2021. The reasons for this are as follows:

  • Sales of new cars are soaring in the region - particularly in China.
  • The population has a strong appetite for mobile broadband services.
  • Average commuting times are longer than in the rest of the world.

According to an OECD study, the average time spent travelling to and from work is 40 minutes per day in South Korea and 38 minutes in Japan - the longest times of all the countries in the study.

The connected car services that users expect in their vehicles will ensure robust mobile data growth for MNOs. Furthermore, users will expect these services to provide a seamless and delightful experience. However, this may not be the case unless operators can offer multi-device shared data plans for cars, innovative cloud-based services and easy-to-use vehicle-optimized apps.

More fundamentally, the user experience will be determined, to a large degree, by the quality of the mobile networks that support these services. Consequently, Asian operators must evolve their network strategies, from building coverage where people live to supporting access when people are on the move. Operators in the region have typically prioritized urban population centers when designing and upgrading networks - particularly in the case of LTE deployment. Asian operators seeking to capitalize on increased data usage will need to prevent radio link failures, interference, bad coverage and unsuccessful handovers along roads.

Morgan Mullooly is an analyst with Analysys Mason

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