The Internet of Cars: Spawning New Business Models

1,007 views

Published on

Published in: Automotive
0 Comments
4 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,007
On SlideShare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
0
Comments
0
Likes
4
Embeds 0
No embeds

No notes for slide

The Internet of Cars: Spawning New Business Models

  1. 1. The Internet of Cars Spawning New Business Models Andreas Mai Director Product Management Smart Connected Vehicles October 2012Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 1
  2. 2. Trends Transforming TransportationSmart Intelligent Transportation InternetNetworked of Cars Pervasive ComputingElectric Smart GridSource: Cisco IBSG Automotive 2011Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 2
  3. 3. Internet of Cars: Unlocking $1,400 in Benefits per Vehicle, per Year Internet of Cars Vehicle User Service Providers  Lower insurance  Traffic guidance, navigation,  Lower operation cost emergency services  Less time stuck in  “Google on wheels,” $ 550 traffic, more productivity PAYD insurance, $160 location-based services $300 Auto OEM/OES $420 Society  Lower service/warranty costs  Fewer crashes  New profit pools  Lower traffic/road/toll  Architectural savings operation costs Benefits per vehicle, per year  CO2 reductionSource: Cisco IBSG Automotive and Economics Practices, 2011Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 3
  4. 4. 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 4
  5. 5. 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 5
  6. 6. Marginal Return on U.S. Road “Business” U.S. Roads: 4,000,000 Paved Road Miles x $6,800,000 Price per Mile = $27,000,000,000,000 Assets $100,000,000,000 Fuel Tax + Tolls = 0,4% Return on Assets “Depreciated” over 250 Years Source: An Analysis of the Current Investment Trend in the U.S. Toll Road Sector, MIT, 2008, Cisco IBSG Automotive 2011Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 6
  7. 7. 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 7
  8. 8. New Battleground: 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 8
  9. 9. Emergence of New Business Models Smart Parking Mobility On-Demand Source: Web Research, 2011Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 9
  10. 10. Smart Shared Vehicle Concept: Dynamic Incentives for Redistribution Trip Destination $ High Demand + Low Vehicle Stock = Low Drop-off Price Cheapest Trip Route $$$ Low Demand + $$$ High Vehicle Stock High Demand + ? = High Drop-off Price Low Vehicle Stock = High Pick-up Price $ Low Demand + High Vehicle Stock Trip Origin = Low Pick-up priceSource: Kent Larson, MIT, Meeting of the Minds, Boulder 2011Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 10
  11. 11. Location Based Services: Multiple Building Blocks … Network Artificial Intelligence Ubiquitous Connectivity ContextSource: Cisco IBSG Automotive 2011Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 11
  12. 12. End-to-End Architecture is Essential – Especially for Scaling Globally Public Cloud Private (OEM) Cloud Enterprise Cloud Services Subscription-based Data Center/Virtual Enterprise Video, Voice, Services Servers Data VNO Operation Policy Enforcement, Flow-based Energy Service Providers Management, DPI (Smart Grid) Mobile SP 1 SP 1 Mobile Communications SP 1 Mobile SP 1 Service Mobile Providers, “Fog” Infrastructure Mobile WiFi Offload DSRC Roadside Consumer Network Electrical Charging Network Wi-Fi Hotspots, Infrastructure Home/Dealership Wi-Fi Hotspots, Charging Stations, Other 802.11u, 3G/4G 802.11p (V2I) Femtocells Services V2I/Upstream Communication (Wi-Fi, 3G/4G, 802.11p, etc.) Vehicle Software Client V2V Communication (802.11p)Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 12
  13. 13. Food For Thought 15-20% Savings = $6-8 B ~$110 B+ ~$60 B RSE ITS CV SPs Infra REITS Auto OEM PAYD 40 1.3T 20% 1/10th Society Policy OBU Vehicle Fuel Tax Share VMT User 20Bottom 33% of U.S. Cars 20% of U.S. RoadsLine $20-30B 550,000 Jobs $1.3T Source: Cisco IBSG Automotive 2012  U.S. BudgetCisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 13
  14. 14. Making the Internet of Cars a Business No One CanWe Can… Together Do It Alone Automotive Government Service Provider Infrastructure Insurance ITS Source: Cisco Smart Connected Vehicle Team 2012Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Internet Business Solutions Group 14
  15. 15. 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 16

×