{"id":57472,"date":"2023-03-31T16:16:05","date_gmt":"2023-03-31T14:16:05","guid":{"rendered":"https:\/\/intellias.com\/?post_type=blog&p=57472"},"modified":"2024-07-22T14:52:36","modified_gmt":"2024-07-22T12:52:36","slug":"comfort-and-infotainment-subscriptions-a-scalable-growth-vector-for-oems","status":"publish","type":"blog","link":"https:\/\/intellias.com\/comfort-infotainment-subscriptions\/","title":{"rendered":"Comfort and Infotainment Subscriptions: A Scalable Growth Vector for OEMs"},"content":{"rendered":"

A modern vehicle is more than a steel body and four wheels. It\u2019s a combination of intricate sensing technology, advanced driver assistance systems (ADAS), real-time connectivity, and customizable salon elements that lead to a safer, comfier, and more entertaining driving experience.<\/p>\n

At least in theory. Because though the technology is there, not all automakers understand how best to use it for creating an enjoyable infotainment experience and ensuring the comfort of drivers and passengers.<\/p>\n

But innovation in driving experiences is what consumers have come to expect from OEMs.<\/p>\n

Advanced safety, infotainment, and comfort features remain in vogue<\/h2>\n

As inflation and rising living costs (among other economic factors) jolt the global markets, 2023 may be another challenging year for the automotive industry. Still, some 14.8 million<\/a> new cars are expected to be sold this year.<\/p>\n

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Buying activity remains strong in the premium segment. Six in ten luxury owners globally would be interested in purchasing a new top-shelf EV model next.<\/p>\n\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\t <\/span> YouGov<\/span><\/span>\n\t\t\t\t<\/small>\n\t\t\t<\/blockquote>\n\t\t<\/section>\n

Consumers have become more price sensitive. Yet, most are ready to splurge on the right type of offer. Among US consumers<\/a>, 55% name safety<\/em> and 39% name high driving comfort<\/em> as key criteria for new vehicle purchases. Also, nearly 8 in 10<\/a> US drivers signed up for a free trial of their vehicle\u2019s connected services and nearly half converted to a paid subscription afterwards.<\/p>\n

EU consumers are also willing<\/a> to pay extra for ADAS, SOS assistance, OEM-provided insurance services, health and safety warnings, and remote vehicle monitoring functionality. In Germany, 44%<\/a> of drivers are also open to paying for extra connectivity services on a per-use basis.<\/p>\n

The wrinkle, however, is that consumers are often lack not aware of new vehicles\u2019 safety, comfort, and entertainment features.<\/p>\n

A recent survey<\/a> of 4,500 car buyers in five markets found that almost half of respondents weren\u2019t aware of ADAS features. However, among those who purchased an ADAS-equipped vehicle, the repurchase rate stood at 87% to 89%. In other words: Drivers get sold on ADAS after trying it.<\/p>\n

Progress in consumer tech in digital services has created a new layer of expectations towards vehicles. People expect new cars to be at least as smart as their smartphones. Premium car buyers want even more sophistication in terms of performance, safety, and in-car styling.<\/p>\n

The (r)evolution of in-vehicle infotainment systems<\/h2>\n

Over the past decade, the electrical\/electronic (E\/E) architectures of cars have significantly evolved. Today, software plays just as important a role as hardware. And investment in new software verticals is accelerating.<\/p>\n

Software development efforts by domain<\/b><\/p>\n

\"Comfort<\/p>\n

Source: McKinsey \u2014 Automotive software and electronics 2030<\/a><\/em><\/p>\n

We\u2019re entering an era where vehicles are equipped with high-performance computing units that are required to support advanced ADAS<\/a> and semi-autonomous driving. The automotive sensor market has shifted to so-called smart sensors, which have a higher degree of edge processing capabilities versus raw sensors that send data to a central domain control unit (DCU). Thanks to smart sensors<\/em>, vehicles can capture and process extra data insights from the real-world environment and connected systems to deliver drivers a safer and smoother cruising experience.<\/p>\n

The sophistication of E\/E architectures also steers a new approach to vehicle manufacturing. Access to ADAS features or extra infotainment services can now be provided on demand through software components rather than through extra hardware modules. Such software-driven development opens up ample revenue streams, from content subscriptions to access to new mobility services<\/a> (car subscriptions, on-demand rentals, etc.).<\/p>\n

Software-driven development already impacts the design of in-vehicle infotainment (IVI) systems. OEMs now have more tech components such as wireless connectivity, cameras, and audio amplifiers to leverage in their system design.<\/p>\n

Sample infotainment head unit architecture<\/b><\/p>\n

\"Comfort<\/p>\n

Source: ST \u2014 Infotainment head unit<\/a><\/em><\/p>\n

With so many tech building blocks in place, OEMs can create a multitude of innovative in-car experiences, ranging from in-car commerce<\/a> to gaming systems<\/a>.<\/p>\n

In fact, that\u2019s what market leaders already do.<\/p>\n

Porsche\u2019s latest IVI system<\/a> comes with an advanced Charging Planner to manage its electric range as well as an improved real-time route building and navigation system. The IVI system also serves as a gateway to a range of value-added digital services<\/a> Porsche has built over the years, which include real-time status updates, remote vehicle diagnostics, and advanced security controls.<\/p>\n

In 2023, GM plans to launch Ultifi<\/a> \u2014 an end-to-end software platform that will enable over-the-air software updates for supported vehicle models and provide subscription-based access to add-on services such as:<\/p>\n