Raise your hands if you wish to own a car with the powerful features like Geo-fencing, drive-on video recording, fatigue tracking, digital keys for locking/unlocking, mobile-app controlled functions, voice-controlled infotainment system and many more.
And all hands in the public would go up! Who doesn’t want these comforting and cutting edge technology features? As published by Business Insider on the survey -
Consumers value in-car technology more than the car’s driving performance!
Well, then the next question would be very straight forward – at what price?
Buying a car is not that simple since it is the second largest investment consumers make, next only to buying a home. Because when consumers go out to buy a new car, the challenge is threefold: -
- There is a price to pay for every feature,
- It is difficult to prioritize “features Vs desires” trade-off and
- How soon the new technology features will become obsolete?
Worst – what all you want today in your budget would not be available for a year or, perhaps, two.
Eventually, most consumers end up buying the car that comes closest to their wish list and suits the pocket. And interestingly, with every passing year the realization within also grows stronger that the current car is losing out on the capabilities offered in new models that you wanted to start with at first place.
At this juncture, consumers have two options a) buy a new car b) upgrade the current one.
Buying a car is not like buying a cell phone which you want to upgrade every two years with a new model.
Last year survey provides some interesting insights starting from the fact the significant percent of consumers are willing to pay for all access to apps, data and media provided it comes as bundled offering.
Technology in the car has been on a constant increase. And most of this technology part is software. It has been predicted that software lines of code in the car would surpass airplanes by 2020.
This increase in software also has an upside too. It has been possible now to not only bridge the gap between customer interactions with car systems but also provide capabilities to enhance the overall experience. For instance, who could have predicted the “CarPlay” or “AndroidAuto” a decade ago? Today these two digital applications with an integrated hardware have enhanced overall consumer experience of not only owning but also driving a car.
The fundamental change is the software integrated hardware part around which multiple other third party apps can be built and take the experience to next level.
It is these Add-ons/third party components which would change the game in future. They are capable of not only providing required features at a lesser price but also enable flexibility with upgrades and future enhancements with respect to fulfilling the certain need of the tech part of the car. The best deal with tech add-ons is that they generally do not require any design or behavior alteration, rather provide complimentary benefits which otherwise would have cost huge amount as part of a new car deal. Isn’t that amazing!
Remember, buying PCs back in 90’s was lot similar model. Where you could buy after-market hard-drives, memory or graphics cards and boost up your computer to eventually come almost at par with the latest one being offered in the market and that too at a fraction of the cost of a new PC.
Emerging Tech Startups & Billion Cars!
Say your current car is a base version which does “not” have some of the premium features such as voice calling, collision prevention alert, fatigue tracking, built in navigation, rear camera, driving behavior and so on. Read again – your car does “not” have the above-mentioned capabilities. Well, you are not alone if you are having such model. It may sound very basic, but the fact is that there more than a billion cars on the market today without these capabilities excluding off-road vehicles and construction equipment.
The market to be addressed with any tech capability to fulfill some or all of needs of existing cars is no less than a billion – a huge opportunity by any means.
CB Insights some time back published an interesting article on the startup landscape working on addressing such tech market. The article highlighted various segments where investments are being made.
After some quick fact-finding on some of the start-ups and their product offerings. Turns out that even though how unique & differentiated their offerings may be, they all are within the affordable range to enable current cars with some intelligence and decision making. Also at a price point which is way less than buying a whole new car.
Some of the good ones are:
IMBOT from ActiveScaler
Rearview Camera from PearlAuto
and many more.
These add-ons range from $50 to $500 and take your current car experience closer to a fully loaded or in modern language – a connected car.
Tradeoffs Or Dilemma?
Overall, the benefits realized by add-ons could be:
- Cost-effective, easy to install and covered with warranty
- Do not alter or change the car behavior. Car works exactly the way it would have been designed or shipped by OEM
- Do not impact or alter fuel efficiency, OEM built in safety, security and so on which generally is the cause of worry at times, thus keeping manufacturer warranty intact
- Provide capability to the car driver/owner to be well-informed about the car behavior and predict certain actions to mitigate any risk
- Make drivers more efficient by providing relevant information at the right time eventually helping them to save money and time
At the same time, the dilemma comes in when one ponders over questions such as:
- Would you as a consumer want to manage and track warranty for each add-on product bought separately from different providers?
- Who is liable in case of product failure and how it would be covered?
- Do add-ons also undergo intensive testing and certification process as compared to a car? Is there a governing body to address such issues?
- They do not involve dealership and some of them may not have near shore locations to diagnose or repair the product
- Recall – a defective part in a car means the whole batch of cars off the road and re-assessed with the compliant part. What happens to these add-ons because they are not governed by NHTSA?
There is certainly no doubt that the life in a tech-driven car is going to be transformative in nature. We can upgrade a base model car to a connected one and make it at par with a new model, at fraction of a price. And going by some of the add-on products, they do undergo heavy certification process and meet regulatory standards however they are still not part of an OEM’s ecosystem of offerings.
Nevertheless, like our usual business of choosing add-ons for service kits, maintenance parts and so on the tech world will be here to stay and make a difference to our lives.
The choice is purely ours if we want to be part of the overall game or limit ourselves to one OEM’s ecosystem.
By Jagmeet Singh,
Jagmeet Singh is a tech enthusiast with 20 years of experience in various industries. He is a management consultant by profession and writes about technology as a hobby. When time permits, he engages himself as pro-bono with Bay Area start-ups on Connected Car, Artificial Intelligence, and Machine Learning.
Views expressed are his own and do not represent his employer – past or present.