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Autonomous Cars will Drive Connectivity Forward at SXSW

Autonomous Internet-connected vehicles are poised to transform our transportation system and our culture. After attending a South-by-Southwest (SXSW) workshop titled “Designing Your Future with Connected Cars,” ARK is exploring the multitude of possibilities.

Enabled by supercomputers, connected cars offer the possibility of highly personalized, optimized, and diversified travel. Personalized cars will interface with other devices and, with the help of artificial intelligence, recognize who is entering and reconfigure the environment according to their preferences. Optimized cars could become the most powerful computers in a person’s life: unlike PCs, tablets, or phones, cars are large form factors and can harness substantially more energy and processing power. As the cloud evolves, the “supercomputer vehicle” will interact seamlessly with other devices, allowing passengers to create and enjoy unique “driving” experiences in virtual reality.

In 2006 the average new car cost $28,500 and the average cell phone $86, but neither was connected to the Internet through cellular networks. While a $501 chip to connect either one of them did exist, it would have represented 37% of the new $136 price of the phone, but less than 0.2% of the car price, as shown below.

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According to our research, while 80% of US cell phones are connected to the Internet today, only 3% of US cars are, as shown below. An Internet connection enhances the core communication capability of a cell phone, while car connectivity thus far has offered limited driving enhancements. An Internet connection allows for safety services like OnStar GM, navigation services like GPS, and infotainment systems like those pioneered by Audi VLKAY, but none of these services fundamentally changes the way a car drives.

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Initial Internet connectivity for cell phones yielded mixed results, since cell phones had not been designed with the Internet in mind. Screens were small, connections were slow, and few applications had been designed to exploit web functionality on a phone. Technological improvements and declining costs allowed the hardware to improve and become more affordable, leading to the emergence of the smartphone. A new industry emerged to support this ecosystem, and smartphones became the second fastest adopted consumer technology in the United States to date, trailing only the television during the 1950s (as shown below).

autonomous cars, Connected Cars

 

Autonomous vehicles (AVs), which will rely on an Internet connection, should change the adoption rate of connected cars dramatically, introducing technology winners. In response to the debate about what technologies will dominate in the AV navigation ecosystem, ARK makes the case for LiDAR. LiDAR will be assisted by constantly updated maps, using information from vehicle to vehicle (V2V) and vehicle to infrastructure (V2I) communication.

Google GOOG is steadily increasing its focus on AVs, as evidenced by its $1.1 billion purchase of Waze, a social-mapping-location-data startup. Waze incorporates social data into its service, but has yet to add V2V and V2I data into a central database for optimized real time AV routing.

Cellular operators and media companies have significant incentives to push the adoption of AVs. Not at the wheel, passengers will have more time for work and entertainment, both requiring fast and reliable Internet connections… and both offering opportunities for new subscription and advertising based revenues.

Consumers already pay for expensive cell phone and tablet data plans, and may resist additional plans for their connected cars. Bundled services will continue to proliferate, and fall in price as companies continue to ride down the technology cost curve and compete. Cisco estimates that costs will decline by 25% per year, pointing to a ten-fold price decrease during the next decade. A 10GB plan costing $100 in 2015, for example, could drop to $10 by 2025, as shown below.

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Given the longer design and life cycles of vehicles relative to cell phones, connectivity components could become outdated before a car is produced or retired. According to Nvidia’s NVDA CEO Jen-Hsun Huang, progressive auto companies already have compressed design cycles from five years to three, and potentially could reduce them to one or two, matching those of smartphones. A fast design cycle would allow cars to be produced with bleeding edge connectivity hardware. Furthermore, Qualcomm QCOM, Intel INTC and Nvidia are developing chips to make software defined modems that are upgradable much like computer operating systems. Such a design will allow Internet transmitted software pushes to keep chips current throughout the life cycle of a vehicle.

Within the next ten to twenty years, automobiles will be inconceivable without the Internet, much in the way phones are today. Computers started the movement, smartphones evolved it, and cars will drive it into the future.

  1.  Qualcomm’s Gobi currently provides 3G, 4G, and 4G LTE connectivity, and sells for a range of prices from $10 to north of $100. Example assumes $50 average.


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