Connectivity Forces Business Model Changes

June 4, 2015

Terry Costlow

Development continues but significant challenges remain in providing the best way to integrate user needs into the simplest human-machine interfaces.

As connectivity and eventually autonomous driving become more common, the auto industry may evolve to focus more on car sharing and gaining revenue from connected services. That will require changes in human-machine interfaces and business models, according to panelists at 2015 SAE World Congress.

HMIs will have to become more standardized, SAE World Congress panelists agreed.

Connectivity is rapidly becoming a necessity, which will force automakers to devise ways to collect revenue from this information technology service. There are four ways revenue can be derived from connected vehicles, according to two panelists during the “What are the Future Needs of a Connected Consumer in a Multimodal World and What can Automotive do to Help?” session.

“It can be put in the price of the vehicle, or it can be in the price of the infotainment system, where the customer buys certain capabilities,” said Andreas Mai of Cisco Systems. “We’re all familiar with a subscription model, where a monthly fee covers the services. There’s a lot of buzz about pay-per-use, where the capability is there, but users don’t pay for it until they use it; but I don’t see that model working well for vehicle makers.”

He noted that successful business models will probably have to be flexible enough to include all those options.

Mai and David Acton of P3 North America Inc. also predicted that car sharing will become more popular in the future, possibly becoming a solid percentage of auto sales once vehicle-to-vehicle communications and autonomous driving become more common. When vehicles drive themselves without requiring a human in the cabin, there’s less reason for people to buy cars. If car sharing becomes popular, HMIs will have to change so people can quickly figure out how to use the features on whatever vehicle they happen to get.

“If companies want to do car sharing, the HMI has to be intuitive so people can immediately operate any vehicle,” Acton said. “HMIs have been a differentiator; it will be a key enabler for car sharing.”

Simplicity is already becoming an important part of HMI design. Many buyers don’t want to read manuals. Instead, they expect controls to be simple enough that no training is needed. This trend towards intuitive HMIs is an important aspect in vehicle development.

“The tolerance level for not knowing how a vehicle works is very, very low,” Acton said.

The panelists agreed that layouts and other aspects of vehicle controls should move towards standardization. This trends towards a common look and feel is part of a major shift in consumers’ view of vehicles.

“The industry has to realize that our products are commodities, with some exception at the high end,” Mai said.