Connected cars which are called “4-wheel smartphones” have started running on actual roads. Not only exsiting automakers but also information communication technology (ICT) companies have considered connected cars as a next-generation device after smartphones and competed to dominate the market in advance. Accordingly, connected car services that can make use of various functions by integrating cars and artificial intelligence (AI) and ICT technologies, including searching for information and streaming music in cars, are rapidly growing.
Naver has recently joined hands with car sharing service provider Green Car, releasing its connected car. SK Telecom is jointly advancing its 5G connected car “T5” with BMW. Samsung Electronics has also acquired electronics system supplier Harman, getting ready to enter the connected car market in earnest.
In addition, Global ICT firms such as Google, Apple, NVIDIA, Intel, Baidu, Alibaba and Tencent, have pushed into the connected car market. Accordingly, the connected car market is emerging as a new battlefield of global ICT companies.
According to market research firm BI Intelligence on August 20, 69 million out of 92 million cars to be manufactured around the world in 2020, accounting for 75 percent, will be connected cars. U.S.-based market research company Transparency Market Research has also predicted that the global connected car market will grow to US$132 billion (140 trillion won) by 2019.
Connected cars have improved the safety and convenience of drivers by converging cars and ICT technologies. An in-vehicle infotainment (IVI) platform is the typical example. IVI platforms allow users to search for information, including direction, by connecting cars and smartphones and provide music and audio contents for entertainment. Google has launched “Android Auto,” while Apple has unveiled “CarPlay.” Naver has also introduced its IVI platform “AWAY” through Green Car.
Currently, the IVI is in the initial stage of implementing infotainment functions through smartphones but major ICT companies are developing technologies that enable cars to directly connect to networks and link to office and home. When the technologies are commercialized, cars will be able to find the nearest and cheapeast gas station by taking account of road conditions and the distance of destination after checking how much gas is left in the tank. Also, the cars will become an actual credit card and automatically makes payment.
In particular, all eyes are on whether connected cars will be able to become a “next smartphone.” As smartphones has revolutionized the mobile platforms, connected cars, which carry so much information, are highly likely to become “running smartphones,” according to the industry. This is why ICT firms are intensely competing to secure the IVI system which is considered the “brain” of connected cars just like the operating system (OS) of smartphones.
Jang Woo-seok, a research fellow at the Hyundai Research Institute, said, “Businesses that fall behind in the connected car development competition will be weeded out of the market as Nokia, which was once a dominant force in the global cellphone market, disappeared after neglecting the development of touch screen mobile phones. They also have to secure connected car-based technologies in order to take an advantageous position in autonomous vehicle development.”
In fact, the speed of cars transforming into ICT devices is getting faster. According to a survey conducted by global consulting firm McKinsey & Company, among recent car customers — those who recently purchased a car, 37 percent agreed they would switch to another manufacturer if it was the only one offering a car with full access to applications, data, and media in 2015, up from 20 percent in 2014.