From car to cloud: the future of the in-vehicle app landscape

1. Summary

Recent developments in the vehicle industry — such as BMW announcing support for Apple’s iPod Out and the emergence of Nokia’s Terminal Mode, which integrates mobile applications into the car environment — suggest 2011 could be the year of the car as a major platform for apps.

This report examines the in-vehicle app landscape, focusing on the different types of car apps, the major players in the space and how each fits into the vehicle industry as more and more apps emerge.

The robust in-vehicle app environment is made up of three concurrent and overlapping modes:

• in the pocket, where the mobile phone is gradually being integrated with car control and car entertainment systems
• in the car, which consists of apps made specifically for the vehicle operating system
• in the cloud, a mode which consists of car apps, from those that provide traffic data to location-based ones, updatable on the fly

From these modes, a new class of services will emerge to exploit information, entertainment and education, all of which will be delivered via numerous routes: USB devices, smartphones, call centers, private-cloud services and, finally, direct from the public cloud in conjunction with newly emerging app stores.

However it needs stating that the auto sector is extremely small in comparison with the mobile phone sector (70 million annual sales vs. 1.4 billion, respectively). From 2015 onwards, applications that connect the car to the home, and that exploit battery and driver data, may become essential part of the green car experience, but this is a slow growing market. That means that the apps scene is far more interesting for offerings that address the existing market rather than new and emerging markets. Short-term opportunities lie in the pocket segment; the long-term opportunities lie in how we consumers, as well as the industry, can re-conceive the concept of mobility.

Looking ahead to the age of the electric vehicle and the smart grid, the in-vehicle app landscape will take another turn as it becomes a part of the same infrastructure that powers both our homes and offices. The electric car will change the vehicle industry once it reaches critical mass, but when this will happen is currently unclear. In the interim, a battle will take place over who controls the end-user experience among proliferating options.