Big Changes in Tech, Have Bigger Impacts on Related Businesses

Big Changes in Tech, Have Bigger Impacts on Related Businesses

Advancements in vehicle technology, particularly the pace of that change, can be a major threat to industry related businesses.

Automobile manufacturers introduced the first radio in 1930. It took another 25 years before the introduction of the 8-track into cars. Compare that to the transition from the in-dash CD player to bluetooth infotainment which took a little less than half the time.

Each transition included incremental improvements.

That first radio in 1930 couldn’t receive FM signals. In fact it couldn’t do much of the things we associate with the car stereo—including play sound in stereo, that didn’t occur until 1969.

Compare that to the progression of in-vehicle entertainment once digital technology was introduced. CDs became the rage. Then suddenly, nobody wanted a CD-player, not even the ones that could play writable CDs. Consumers wanted an input jack to play their electronically stored music.

By the early 2000s no one wanted to deal with cords, and Bluetooth wireless connectivity was the feature demanded by vehicle consumers.

The story takes a warp speed step forward with the improvement of wireless internet technology and the Internet of Things (IoT).

Vehicles are quickly becoming part of the Internet of Things (IoT) ecosphere

The Internet and Wireless Technology: The Fuel for Disruptive Change

Change has come again to the vehicle ‘radio’, but this time with much larger implications. The internet combined with modern computing power has begun transforming the way vehicles are being designed, engineered and function.

The vehicle has gone from a loose colloid of connected parts and systems, to an almost fully integrated network of computers, that work closely together to ensure optimum performance and safety.

The most ominous change, for those within the vehicle infotainment industry will be Over the Air Updates and the addition of automated safety features. Why do we predict these changes will be so impactful to infotainment related businesses like yours?

Unlike past changes to in-vehicle entertainment, the head unit is now becoming a specialized computer. In many cases the head unit has been built for the specific needs of a specific model vehicle. In other words, key vehicle functionality and features have become connected to the factory head unit and the vehicles themselves.

The connected vehicle will bring about a new set of challenges such as security, interconnectivity and greater dependance on factory infotainment equipment.

Challenges Ahead for Aftermarket Infotainment Equipment

Aftermarket head units could become the cassette decks of the modern era. Here are the 3 reasons why that statement can be made:

  • Information Security
  • Plans for Autonomous Vehicle Production
  • Profitability for Vehicle Manufacturers

Information Security
Internet security has become one of the most important, yet ignored aspects of modern society’s everyday living. That will change once more and more vehicles become reliant on internet based technologies such as over-the-air updates.

If the cyber criminals we’ve heard so much about recently gained access to a manufacturer’s server, what types of havoc could be sown? Who would ever trust any of these vehicles again in the instance of a major incident.

With so much invested by in the electrification and autonomy of vehicles, security will become a major concern for automobile makers. The issue already came to the forefront with the 2020 passage of the Right to Repair law in Massachusetts, giving owners and repair shops access to onboard computer systems.

When the first right-to-repair passed, manufacturers quickly standardized their approach for all states, allowing access to proprietary systems. The manufacturers took a different approach with the new 2020 law.

Instead of rolling over, they’ve begun fighting the law and are proposing limits to access to computer systems. They’ve based their arguments for greater control on the need to ensure security.

With all the news about cyber criminals, ransomeware attacks and identity theft, there seems to be a valid argument for protecting access to vehicle computer systems.

How will this affect aftermarket equipment manufacturers?

Plans for Autonomous Vehicle Production
Autonomous vehicles have become the focus of vehicle manufacturers. GM, Ford and Stellantis have all invested billions into autonomous driving technologies.

These systems will obviously rely on sophisticated technical architecture and programming. Engineers literally program millions of lines of code to attain the limited level of autonomy delivered in current vehicles.

What level of complexity will be required to reach full autonomy? How willing will automaker be to share that code—instead of simply leveraging the platform for their own profitability?

Profitability for Vehicle Manufacturers
Have you noticed the trend in vehicle manufacturers offering aftermarket upgrades, or licensing specific equipment vendors?

The Automotive Aftermarket Suppliers Association (AASA) estimates the U.S. light-duty aftermarket at $281 billion. That’s a great deal of money not just for the manufacturer, but for the dealerships who will sell this parts and get the service money for the installation.

In addition, over-the-air-updates will be used to make repairs on vehicles. Imagine how much money and time could be saved, if a recall could be effected while most vehicles were parked in the garage during the middle of the night.

This aspect of OTA has dealerships worried. If repairs can be completed via internet update, what happens to the dealership service center?

Manufacturers have now begun adding features after purchase utilizing OTA updates. Want to add safety features that control lane changes and avoids collisions? No problem. Touch a few buttons on the touchscreen, approve the charge to a credit card and now the driver has additional safety features.

These models have already been implemented by BMW for certain premium features, with Stellantis, GM and Ford all planning similar service offerings.

Even more important, is that many of these features can only be controlled via the infotainment touchscreen.

Whereas the current aftermarket infotainment market relies on the ability to make radios as generic as possible, vehicle manufacturers have begun working in an opposite direction—linking critical vehicle functionality to the infotainment head unit.

Can that approach continue to exist? If not, will the likes of Alpine and Kenwood have the resources to pivot and still stay profitable?

Businesses must be ready to adapt to changes caused by disruptive leaps in technology. Otherwise they risk living a Blockbuster moment.

Remembering Blockbuster…

Change has come in a very impactful form to vehicle infotainment.

It brings to mind the ironic story of Blockbuster video. The company took advantage of the technical change in how media could be distributed and consumed. It built a huge business and brand renting first VHS copies, and then DVD copies, of video entertainment. You would be hard pressed to find someone who didn’t have a Blockbuster account. Blockbuster video stores stood on almost every other corner.

Suddenly the internet and streaming video came along.

Another enterprising media company Netflix, took advantage of this new technology in the beginning stages. Slowly, then quickly, Netflix began to take over the market. Blockbuster attempted to make the pivot to streaming, announcing their own streaming service.

The pivot came too late. Blockbuster never regained its footing, and the company closed almost every location.

Will your business make the pivot in time? What are your alternatives.

Join us for our webinar, Leveraging Factory Upgrades for Your Business to get ideas and start preparing your business for a successful future.

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