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11 10 18 Cisco Its Wc Internet Of Cars F
 

11 10 18 Cisco Its Wc Internet Of Cars F

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Internet of Cars Presentation Delivered at ITS World Congress 2011

Internet of Cars Presentation Delivered at ITS World Congress 2011

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    11 10 18 Cisco Its Wc Internet Of Cars F 11 10 18 Cisco Its Wc Internet Of Cars F Presentation Transcript

    • The Internet of Cars: A Business Case Intelligent Transportation Systems World Congress 2011 Andreas Mai Director Automotive North America Internet Business Solutions Group 18 October 2011Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 1
    • Transportation: A Global Transformational Opportunity? Accidents Congestion  7.9 million accidents  90 billion hours delay  7.4 million injured  230 million metric tons  1.3 million fatalities of carbon-equivalent  $0.6 trillion cost  $1 trillion waste (2% of GDP) Future of Mobility? Auto Business Model Road/ Traffic System  Oversized and  “Free” public service underutilized vehicles  No/ low return on assets  75% of automotive  Underfunded value add post sale  Deficient  8%-15% gross marginsSource: IRF World Road Statistics 2008, World Bank Global Road Safety Facility, Cisco IBSG Automotive 2011Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 2
    • U.S. Roads and Highways Are Congested, Deficient, Lack Desirable Safety Features $270 B Needed 4.2 T 2030 +38% +41% 2010 25% 2.2 T 1990 Cost Budget: + 55% $90 B Vehicle-Miles Travelled (Trillions)Source: America’s Top Five Transportation Headaches, AASHTO, Victoria Transportation Policy Institute, 2009Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 3
    • Vicious Circle: Pigouvian Tax for Personal Mobility Real Cost Supply Hidden Tax Demand Available BudgetSource: Cisco IBSG Automotive, 2011Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 4
    • ―Real‖ Cost of Owned Vehicles in U.S. Is $3 Trillion Per Year—50% Is Hidden Tax ―Visible‖ Annual U.S. Vehicle Cost ―Hidden‖/ Societal U.S. Traffic Tax $9,460 / Vehicle $3 Trillion / Year $9,610 / Vehicle 5% License & registration Traffic services1 3% 6% Fuel tax Pollution/GHG 10% 8% Service & maintenance Road facilities 11% 11% Insurance $1.5 Parking facilities 12% 13% Parking > $100 B = 19% Fuel & oil (net of tax) Congestion Travel Time 29% $1.5 Depreciation 38% @ 15,000 miles/yr Crashes 35% and financingSource: Victoria Transport Policy Institute, AAA, DOT, Cisco IBSG Automotive 2011 1. Includes toll, law enforcementCisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 5
    • In Urban Traffic, Even the Most Fuel Efficient Car Wastes Energy and Time Urban Congestion: Parking Search: Traffic Light Stops:11%-13% Time Wasted 7%-21% of Urban Traffic 10%-17% of Urban Fuel 1 Liter / 100 km CarSource: VDA Annual Report, TTI, VTPI, Cisco IBSG 2011Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 6
    • Evolution of Ground Transportation? Personal Transportation …But What is the Next Big Thing? Mass TransportationSource: christian-foerg.de ,Cisco IBSG Automotive 2011Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 7
    • Reinventing Ground TransportationSmart Intelligent TransportationNetworked Pervasive Computing MobilityNElectric Smart GridSource: Cisco IBSG Automotive 2011Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 8
    • The Internet Takes to the Road… Running Transportation on Networked Information Transportation Services Delivered by Technology Safety and Operational Travel Revenue Security Efficiency Experience GenerationSource: Cisco IBSG Automotive, 2011Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 9
    • Road to More Safety & Less Congestion Is Mainly Driven by Government Policy Connected Cybernetic Traffic Management Smart Connected Safety & Congestion Management V2I & Local Dynamic Traffic Management Smart Road Pricing/ VMT Tax V2V Safety & Driver Assist Insurance Incentivized Driver Behavior (PHYD) Eco-Drive and On-Board Safety & Driver Assist 2010 2025Source: Cisco IBSG Automotive 2011Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 10
    • THE ―Savior-App‖: Strategic Asset for the Entire Car Insurance Value Chain Usage &  PAYD, PHYD, MHYD 10% - 30% Behavior Premiums  Vehicle and driver health monitoring  Safest-route Crash  ADAS + V2V + V2I 20% - 35% Prevention of Crashes  eCall/ ACN  Virtual Black Box Fast & Correct  Driver vitals to first responders 5% -15% Response  Investigation costs Savings  Fraud prevention and reduction (~80%) Claims & Cost  Stolen vehicle tracking / location 30% - 80% Containment Savings  Pay as you speed  Virtual violation detection and notification Connected Law  Automated payment 20% - 30% Enforcement Savings per connected vehicle and year: Savings $280 for insurance/ owner + $100 for societySource: OctoTelematics, Cisco IBSG Automotive 2010Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 11
    • Top Auto Profit Pools Are Connected Vehicle Care and B2B/G Services Dollars per Vehicle per Year1 Connected Vehicle Care 110 $340 B2B/G Service Platform 30 $110 3rd-Gen Navi/LBS/ Auto-Pilot 25 $85 Total Safety & Security/ITS & ADAS 25 $85 Revenue $680 COGS $470 Infotainment & Productivity 15 $50 Gross Margin $210 Mobility Cost Optimizer 5 $101 Includes one-time effects spread over assumed 5-year first ownership cycleSource: Cisco IBSG Automotive, 2011Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 12
    • Advent of New Business Models? From Building Cars to Selling Travel Time Well Spent Extended Design Connecting Marketing, and Supply Chain the Value Chain Advertising, CRM CONNECTED CONNECTED CONNECTED CONNECTED within the car to personal devices around the car to the cloud Travel Experience & Distribution and Location-Based Services Service NetworkSource: Cisco IBSG Automotive, 2011Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 13
    • Connecting the Mobility Value Chain: New Business Model Opportunities Connect… Transform… Develop Source Make Sell Deliver Service CONNECTED CONNECTED CONNECTED CONNECTED Vehicle within the car to personal devices around the car to the cloud Energy Carriers Infrastructure ITS New Services …Source: Cisco IBSG Automotive 2011Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 14
    • Internet of Cars = Better Experience = Key Growth Market for Service Providers Pervasive Computing Users Grow the number of mobile revenue-generating subscriptions Ubiquitous Connectivity Artificial Intelligence Uses M2M Network Usage Find more things users can do Drive the frequency with which with their mobile devices people use mobile data services Source: Cisco IBSG 2010Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 15
    • Nearly 300 Million Connected Vehicles = More Than 400 Million Gigabytes / Month Global Passenger Vehicle Population & Share of 407 Peta-1 Connected Vehicles (Millions) bytes/ Month Total 841 870 901 932 963 995 1,027 1,059 1,092 1,126 325 174 226 283 CV 17 55 87 127 250 3 8 33 182 125 79 861 883 899 909 908 900 886 866 843 839 47 25 4 12Connected 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Vehicle 0.3% 1% 2% 4% 6% 9% 12% 16% 21% 25% Share1 Average of 1.5 GB/month/vehicle, 1 Petabyte = 1,048,576 GBSource: Cisco IBSG estimate 2011, based on data from US-DOT, iSupply, McKinseyCisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 16
    • Off-Loading Data and Switching Is Key to Improve Experience and Contain Cost HOME ROAD OFFICE Home Security & Automation 3G/LTE WLAN Media DSRC City Mesh Hotspot Cable / DSL “Switching” Ethernet / LANSource: Cisco IBSG Automotive 2011Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 17
    • The Connectivity Infrastructure Could be a Profitable Business at 1/10th ¢ / VMT U.S. Roadside Equipment (RSE) PPP Revenue Model [US$ Million] 1/10th CapEx P&L ~3,000,000,000,000 Initial Total 5 Year RSE 6,261 626 Investment (10 Depr.) = Repair/ Replacement 616 62 Operating Expenses 440 Subtotal RSE Cost 1,128 Hypothetical Margin 100% 1,128 Per Month Revenue Required to 2,256 Fund ―RSE Business‖Source: Vehicle-Infrastructure Integration (VII) Initiative, Benefit-Cost Analysis, Version 2.3, US-DOT, 2008Cisco IBSG Automotive, 2011Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 18
    • THE Future ―Finance-Application‖: Connecting for Smart Road Pricing Smart Road Pricing / Vehicle-Miles-Traveled Tax Time of Day Occupancy Congestion Speed Weight Road Type Fuel Economy Emissions CO2Source: Cisco IBSG Automotive 2011Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 19
    • Infrastructure Investment: Resolving the ―Chicken & Egg‖ Dilemma ~$60B $6-8B ~$110B+ Investment CV SPs 15-20% RSE Auto OEM 40 OBU 1/10th Society 1.3T 20% VMT Vehicle User 20 Incubate New Industries Fuel Tax Share 33% of CarsBottomLine $20-30B $1.3T 150,000 Jobs 550,000 Jobs 400,000 Jobs Budget Source: Cisco IBSG Automotive 2011Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 20
    • Internet of Cars = $110–280 Billion Value in the U.S. = $1,400 Per Vehicle Per Year Benefits of Connecting U.S. Vehicles by Penetration ($B per Year) $282 Internet of Cars 32 Service Providers Society  Traffic guidance, navigation, 64  Fewer crashes emergency services  Lower traffic/road/toll  “Google on wheels,” operation costs PAYD insurance, LBS $117 85  CO2 reduction 13 Auto OEM/OES 27 Vehicle User  Lower service/ $35 35 101  Lower operation cost warranty costs  Less time stuck in  New profit pools 42 traffic, more productivity  Architectural savings 10% 33% 80% 10% 33% 80%  Lower cell phone costNote: Core Regions NA, EU, AP, Excl. 22% RoWCisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 21
    • Making the Internet of Cars a Business No One Can Do It Alone Source: Cisco IBSG Automotive 2011Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 22
    • More Food for Thought on the ―Internet of Cars‖  Executive Summary: A Business Case For Connecting Vehicles  Government: A Catalyst to Unlock Societal Benefits of Transportation  Carriers: Service Providers at a Crossroads  Automotive: From Building Cars to Selling Travel Time Well-Spent  Insurance: The Business of Preventing Crashes Andreas Mai: andmai@cisco.comCisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 23