Can IoT revive the automotive industry in Australia?

With IoT fast becoming the “Internet of everything”, the future is bound to be dominated by the smarter, more complex and more software intensive products that will rule the market.

The IoT is essentially a network of machines, equipment, vehicles and so on, all with inbuilt sensors that are capable of measuring and quantifying external and internal factors and communicating the same between each other. In a nutshell, IoT is a network of intelligent machines similar to the network of computers we know as the Internet.

We are already living in a connected world, with numerous examples of connected smart local area networks today for machines which may soon expand to form the world wide web of connected devices. Can the mean machine on 4 wheels be left behind? Far from it.

Today’s cars are already a network of computers on wheels with as many as 100 Electronic Control Units driven by as many as 100 million lines of code. GPS navigation, live traffic updates, Bluetooth connectivity and satellite radio have all existed for quite some time now. What was missing was the “connection” between these individual “points”.

Analysts such as Gartner have predicted that IoT will result in $1.9 trillion in global economic "value-add” – the combined benefits that businesses derive through the sale and usage of IoT technology. Manufacturing, health, insurance and the financial sector will benefit most in the beginning before IoT expands across other industry sectors.

Connected cars alone will be a $54 billion industry by 2018.

Just consider a few recent advancements in the automotive space which clearly demonstrate that we are moving towards a world of “connected cars” and how:

·        Tesla now sends software updates over the air for their cars either via the 3G connection or via your home wireless.

·        Traditional IT and electronic companies such as Intel are heavily investing into the automotive sector.

·        Big telecom companies such as Sprint coming up with the device-agnostic velocity for the Auto sector.

·        Apple’s VP of internet software and services is now on Ferrari’s board of directors.

So what does this mean for us? With manufacturing here struggling and the auto industry on the brink of collapse, the connected car paradigm is a blessing for the Australian automotive industry.

To make the most of it, the connected vehicles of the future will need to utilise cutting edge technologies in sensors, displays units, on-board computers, intra- and inter-vehicle data communication, self-learning in-vehicle operating systems, speech recognition, driving pattern analytics and so on. Here are some pointers that indicate where we stand with respect to ‘Automotive IoT’:

  • Most auto manufacturers including GM, BMW and Tesla are making considerable investments in connected car programs resulting in growing partnerships between leading suppliers such as AT&T. In fact, AT&T has deals with General Motors, Audi, and Tesla amongst others. As well, Verizon has had a decades-long partnership with General Motors.

  • Consider Seeing Machines, a home grown Aussie firm which has tied up with Takata recently. Takata is a leading supplier for GM and Seeing Machines will leverage this to spearhead the smart drive monitoring technology for GM cars.

  • North America is the foundation of the global connected car business, accounting for 37% of global service revenue in 2013; Europe and Asia will be fast-growing regions.

  • The most conservative of estimates predict that the revenue derived by service providers for the connectivity and other basic value-added services they provide to the automotive, transport, and logistics (a.k.a. connected car) segment to be more than triple from 2013 to 2018, to $16.9 billion worldwide. Bringing new technologies and services into the car is a $50 billion market.

  • The connected car services market is growing at a 2013–2018 compound annual growth rate (CAGR) of 25%, nearly 21 times the growth rate expected for traditional mobile voice and data services during the same time period!

  • Apps for in car infotainment systems are taking precedence over traditional systems. Connected cars allow E-commerce sitting right in your car by connecting to the insurance company, finance, dealer and so on!

  • This is not just about cars but implies all vehicles – Intelligent Fleet management systems today (from Bosch for example) can automatically detect vehicle positions, conditions and initiate remote diagnostics. All this by tightly integrating into existing logistics operations.

  • PTC’s ThingWorx platform is the first application platform for the connected world, enabling companies to cost-effectively build value from their smart, connected products and deliver end-to-end solutions.

  • Apple has in recent months announced partnerships with nine auto-makers to bring a new breed of advanced voice control, dubbed Siri Eyes Free, to vehicles in the next year.

These don’t tell you what to do and are not meant to be answers in themselves.

What it does is to make us aware of which direction to move in if we are to make a difference.

The best part about IoT is that an unexpected collection of functionality can make something new possible! IoT has transformational impact on a broad spectrum of connected industries and systems, and is applicable to connected products, machines, sensors, systems, and industrial equipment.

What is required is to reduce the time, cost, and risk required to build innovative applications for smart, connected products. It is important to remember that the IoT is in reality an “internet of applications” given it’s the software embedded in these devices that essentially makes the communication possible. If we utilise the right approach to managing the mechanical parts, the electric components and the software system that drives these devices as a single finished product we can achieve value, revenue and success.

It’s true that IoT will create its own set of security, privacy and trust challenges.

We need to acknowledge that privacy and security issues are a part and parcel of the Internet Of Things.

By addressing these privacy & security issues right at the outset, we can mitigate the security risks drastically. The Internet itself isn't free of security risks, after all, so rejecting IoT because of privacy and security concerns is more like shooting yourself in the foot.

Using preventive monitoring and maintenance based on “what could possibly fail” rather than waiting on a fault is the key.

As IoT moves towards an organised, consolidated framework with interoperable devices and standardied technologies, addressing these and other challenges should be quite straightforward.

The essence of IoT is "Manage the software the smarter way and the devices will connect the smarter way”.

With the economies of scale bringing down the costs and increasing adoption of new technologies, the future of the automotive industry isn't just about engine performance any more, it’s about a delightful user interface! To quote Sir Winston Churchill: “This is not the end, it is not even the beginning of the end, it is just the end of the beginning.”


The author, Bibek Banerjee, a technology evangelist, has been in the IT Industry for 13+ years, managing People, Product, Process and Projects, touching upon Application Lifecycle Management, Application Performance Management and Gaming verticals. In his current role with Leap Australia (an Engineering Software and Services Solution provider), he provides consulting services to Engineering companies helping them manage embedded software.

His views are his opinions and do not represent that of any company, organisation or any other individual – in other words, it’s just Bibek thinking out aloud.


Image: http://www.veooz.com/

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