The document discusses the concept of the 'connected car', which integrates advanced technologies like mechatronics, telematics, and AI to enhance safety, entertainment, and connectivity for drivers, transforming vehicles into mobile information hubs. It highlights the growth of the automotive industry fueled by the emergence of mobile applications, cloud solutions, and changing consumer demands for personalization and seamless connectivity. The connected car presents significant market opportunities for stakeholders while facing challenges in security and consumer reluctance to pay for connectivity services.

1. • Cognizant 20-20 Insights
Exploring the Connected Car
Emerging technologies and industry ecosystems are enabling
automotive makers to deliver an immersive information experience
that transcends the boundaries of traditional vehicular transport.
Executive Summary — from automakers and OEMs, through banking
and financial services and insurance providers
Over the last few years, automotive electronics
and retailers — to generate new streams of linear
and wireless technologies have grown by leaps
and nonlinear revenue, all the while providing a
and bounds.1 Advancement in these technologies,
unique experience to customers.
combined with device convergence and changing
lifestyle demands, are enabling the automobile to This game-changing concept is called the
extend the driving experience beyond traditional “connected car.” It can be aptly defined as a
vehicle transport. vehicle using mechatronics, telematics and
artificial intelligence technologies to interact
In summary, the car is becoming an extension of
with the environment to provide greater safety,
consumer individuality, as many drivers expect to:
comfort, entertainment and, importantly, a
• Have the same experience and connectivity “connected-life” experience. The car, in essence,
when on the move as in their personal and pro- becomes an information hub on the connection
fessional lives. information highway (i.e., the mobile Internet),
• Gain green solutions that preserve the environ- with built-in intelligence to conform to user needs
ment in socially responsible ways. and circumstances.
• Achieve benefits through networked industries Examples of connected-car functionality include:
(e.g., telematics for insurance). • When the phone rings, the music goes silent so
the driver is able to communicate effectively.
To fulfill such demands, an increasing number of
solutions are providing vehicle-to-infrastructure • When approaching a traffic hazard, the
communication (V2I) and vehicle-to-vehicle com- navigation system provides a warning on what
munication (V2V), which are services that allow lies ahead.
automobiles to continuously exchange informa- • When the car transmits data for remote monitor-
tion with the environment through which they ing of performance or maintenance needs, the
pass. The car’s connection to the surrounding mechanic or dealer can call the vehicle in before
world is a game changer that is growing beyond the driver even notices there is a problem.
traditional in-vehicle infotainment.
• When the car sends real-time data about a crash,
Moreover, this trend presents a huge opportu- along with the location, emergency teams can
nity for an emerging ecosystem of companies assist without an alert from the passengers.
cognizant 20-20 insights | november 2012

2. Benefit per Vehicle per Year
• Traffic guidance, navigation,
emergency services • Lower traffic, fuel, repair, insurance costs
• Location-based services, • Less congestion
PAYD, PHYD 11% • More personal/professional productivity
• V2V, V2I
• Reduced service, 39%
warranty costs 21%
• New profit streams PAYD: Pay As You Drive
PHYD: Pay How You Drive
(a more behavioral-based
• Fewer accidents, improved safety 29% program than PAYD)
• Lower traffic/road/
toll operations cost Vehicle users Societal impact
• CO2 reduction Auto OEMs Service providers
Source: Cisco Internet Business Systems Group, Automotive, Research & Economics Practices, 2011
Figure 1
The connected car promises improved quality (Tacoma), Ford (Fiesta) and Lexus (GS 450h) have
of life to consumers and society at large, thus even launched models with variants of connected
opening a wide area of business opportunity for car features to be available in the next year.
various stakeholders, such as vehicle users, auto
OEMs and service providers (see Figure 1). These trends are fueled by explosive growth in
the smartphone market and wireless-enabled
The Connected Car: From devices (see Figure 3). In addition to these devel-
Concept to Reality opments, mobile apps and cloud solutions are
taking telematics applications to the next level.
Until recently, the connected car existed only
(For more on this topic, see our recent report,
at a conceptual level, or it was enabled through
“The New Auto Insurance Ecosystem: Telematics,
feature pilot implementations. Today, however,
Mobility and the Connected Car”).
key trends and growth enablers (depicted in
Figure 2) are pushing industry players to define Other factors influencing the growth of connected
roadmaps for implementing the connected car. cars include changes in regulations for city
OEMs such as Audi (A6), BMW (328i), Toyota and road tolling, new young-driver monitoring
Growth Drivers for the Connected Car
Personalized Experience
• Increasing emphasis on
personalization and customization.
• Personalized content, information, media feeds.
• Car adapts to driver.
Pervasive Access Security
• Customers increasingly willing to trade • Protects passengers, economic driving,
personal information for “free content.” reduced traffic rule violation.
• Customers expecting seamless • Penetration of safety and security
on-the-go experience. solutions in new vehicles will rise
• Provides access to consumer from 10.2% in 2012 to 49% in 2017.
when not driving. (Source: ABI Research)
Younger Generation
Devices and Integration
• By 2016, 25% of cars will have • Greater emphasis on productivity,
remote monitoring control systems. practicality and fun.
(Source: iSuppli) • Need for social connection.
• Use of smartphones while driving. Connectivity
• Mobile, speech integration. • Growth in Internet and smartphone users.
• Integrate with automotive • Enables traffic optimization, shared rides,
human-machine interfaces. connected life applications.
• Use downloadable third-party apps. • Upsurge in apps, cloud application hosting.
Figure 2
cognizant 20-20 insights 2

3. Smartphone Growth Forecast diagnostic, maintenance, information about
driver habits, video on-demand, audio storage,
emergency reporting for accident handling,
1200 60%
1,000
traffic management and sophisticated navigation
50%
800 40%
and trip planning systems. Potential applications
600
30%
also extend far beyond these current capabilities
400
20% (see Figure 4).
300
200 10%
100 0% What’s Hot, What’s Not
2009 2010 2011 2012 2013 2014 2015
Drivers, as well as government, academic and
Smartphone shipments
Percentage of total cellphone shipments
business stakeholders, will ultimately determine
which connected-car capabilities will succeed in
the marketplace and how quickly these trends will
Source: HS iSuppli August 2011
Figure 3 become commonplace. The following are some
examples of connected-car capabilities catching
programs, laws restricting the use of handheld on among businesses, consumers and other orga-
mobile devices while driving, and flat rate data nizations:
packages for mobile networks. • Diverse devices plugged into a vehicle’s
onboard diagnostics (OBD) port transmit
OEMs and Tier 1 suppliers are responding by
driving patterns and vehicle data directly to
developing the basic building blocks and initial
back offices. Insurance carriers can build on
applications enabled by these technologies, which
this driving data and offer new usage-based
are focused on navigation, safety and remote
insurance (UBI) products, such as pay-as-you-
operation. Building blocks include Internet con-
drive or pay-how-you-drive.
nectivity within the car, secure connectivity, inte-
gration with mobile, integration with back-end • Innovative urban mobility programs such
business systems and personal data through as Intelligent Transport System programs in
the cloud. Current applications include remote Europe and the U.S. are yielding results.2
Application Canvas
Remote
Navigation Entertainment Electric Vehicle Safety
Applications
• Get directions, maps in • Access/play music, • Remote door lock/ • Nearest charging • Speed, distance advice.
real time. videos/movies/TV, unlock. station with tariff • Lateral collision warning,
• Mobile Internet: Points games. • Remote appliance information. cooperative lane change,
of interest, broader info • Internet radio. management. • Scheduling a charging merging assistance.
on the move. • Social networking, • Car tracking. slot. • Traffic sign violation
• Congestion/accident chat. • Theft alerts. • Home charging. warnings.
alerts/re-routing advice, • Trip information, • Estimate driving • Car breakdown warning.
• Geo-fencing.
weather/road condition schedules. range, battery charge • Automatic call for
alerts. status.
• Seat adjustments. assistance in the event
• Preferred routes within • Carbon footprint. of a crash (i.e., eCall),
• Personalization.
city /parking guidance. breakdown rescue.
• Internet services.
• Journey planner. • Integrated car safety.
Vehicle Management Fleet Management OEM Dealer, Service Center Industries
• Maintenance • Tracking and tracing, • Spare parts, • Warranty, logistics, • Insurance (pay per use).
notification alerts to delivery notifications. logistics inventory. • Retail: Online shopping,
individuals, garages. • Optimal routing and management. • Service appointment, alerts.
• Remote diagnostics. journey management. • Field analysis and check-in. • Advance toll applications.
• bCall (breakdown call). • Performance analysis. issue identification. • Mobile workforce. • Intelligent transport
• Driver performance • Trip records. • Vehicle lifecycle • Promotions/product systems.
analysis. management. demos.
• Virtual trainer. • Telemedicine.
• Brand improvement. • Product info/
• Alerts and reports. • Banking transactions.
• Integration with guidelines.
• Fuel/energy
business systems. • Lifestyle profiling.
management.
• Customer profiling.
• Resting time violation.
Figure 4
cognizant 20-20 insights 3

4. • The automotive industry is embracing • No business model has yet resulted in
mobility and cloud technologies to create customer acceptance, sustainability or willing-
seamless on-the-go experiences, such as ness to pay.
advanced navigation, video streaming from a
home playlist, social connect, etc.
• A lack of security in OBD ports and intra-
vehicle networks is posing severe challenges to
• Industry-level consortia (e.g., Car Connec- V2V and V2I programs.
tivity Consortium, GENIVI, National VII
Coalition, CVIS, etc.) and research univer-
• A plethora of technologies, including wider
proliferation of interoperability and open
sities (e.g., Stanford, Imperial College, etc.)
platforms, is missing.
are defining standards, open platforms and
common methodologies, as well as providing Looking Down the Road
core research on several driving elements,
There will be more than $20 billion in market
such as autonomous driving (e.g., Google Car),
opportunity by 20254 through connectiv-
automotive mobile apps, electric vehicles,
ity solutions and embedded telematics. The
advanced telematics, etc.
connected car has struggled to take off, but the
• Cross-industry applications are enabling inflection point is just around the corner. It won’t
electronic toll, traffic safety and electric vehicle be long before the car becomes an integral part of
charging. the Internet community.
Meanwhile, the industry also faces the following Already, emergency, tracking and remote
connected-car issues and challenges: operation services are in place and may soon be
superseded by V2V and V2I technologies that will
• Consumers are reluctant to pay additional help millions of cars inter-communicate on traffic,
costs3 associated with embedded connectivity safety issues and real-time information. This
and view their smartphones as the solution to development will render transportation safer, as
many of their in-car connectivity needs.
Quick Take
Around the Bend
The connected car promises tremendous benefits OEMs & Tier-1s
for various constituencies. Here are a few: • New business models, such as upfront revenue,
pay-per-use, etc.
Mobile Network Operators
• Real-time traceability.
• New business models, such as bundled sub- • Better remote management, field services and
scription services, incremental services,
inventory control.
targeted sales, etc.
• Improved safety for vehicles.
• Additional revenue by redefining customer • Improved customer understanding through
interaction.
lifestyle profiling.
• Add-on services beyond communication and • Brand improvement through unique user
entertainment.
experience.
• Regulatory-driven solutions.
Service Providers
Customers
• New revenue streams through consulting, plat-
• Monetary savings. form-based services, system integration, etc.
• Enhanced productivity. • System integration using social, mobile,
• Improved safety. analytics and cloud (SMAC).
• On-the-go experience. • Back-office integration.
• Green solutions. • Customer data management.
• More fun, socialization and entertainment. • Embedded services.
• Value-added services: pay-per-use insurance, • Pan-industry convergent solutions.
driveability-based warranty, points of interest.
cognizant 20-20 insights 4

5. well as more entertaining, efficient and environ- such as the European Union’s eCall initiative or
mental. Pan-industry applications, such as pay- stolen vehicle tracking.
by-insurance and advance tolling, will pave the
way for further networked industry applications.
• Integration of advanced driver assist systems
with V2V and V2I communication holds the
In our view, the connected car business will thrive promise of reducing crashes.
on the aforementioned enablers if automotive • The separation of services between smart-
majors, wireless carriers and engineering IT phones and onboard communication devices
service providers form effective partnerships will also reduce complexity with respect to con-
to build open platforms using technologies nectivity provisioning.
such as LTE broadband, HTML5, virtual network
computing and cloud computing.
• Future connected car services may require the
combination of two or more wireless data com-
Going forward, players across the ecosystem munication technologies.
should be mindful of the following: • The development of sophisticated and
integrated human machine interfaces to avoid
• A growing number of telematics mandates are driver distractions will become more viable as
being introduced by governments for services
more cooperative systems become available.
Footnotes
1
By 2014, 43% of new cars will support embedded telematics, according to ABI Research. According to
Juniper Research, more than 92 million vehicles with Internet connectivity will be on the road by 2016.
2
A major milestone in ITS-related standardization has been achieved through the publication by ETSI of
the European Standard for ITS Communications Architecture.
3
According to an Alcatel-Lucent Europe Survey in 2009, European consumers would pay a stand-
alone monthly fee of €27 for LTE-connected car service, while consumers in France are willing to pay
€30 per month.
4
“2025 Every Car Connected: Forecasting the Growth and Opportunity,” GSMA, February 2012.
References
• Andreas Mai and Dirk Schlesinger, “Connected Vehicles: Service Providers at a Crossroads,“ Cisco
Internet Business Solutions Group, April 2011.
• Andreas Mai and Dirk Schlesinger, “Connected Vehicles: From Building Cars to Selling Personal Travel
Time Well-Spent,“ Cisco Internet Business Solutions Group, April 2011.
• “More Than 50 Billion Connected Devices,“ Ericsson, February 2011.
• “Connecting Cars: The Technology Roadmap,“ GSMA, February 2012.
• “Connected Cars: Business Model Innovation,“ GSMA, May 2012.
• “New Services Enabled by the Connected Car,“ SMART, European Union, 2010.
cognizant 20-20 insights 5

6. About the Authors
Vivek Diwanji is a Principal Architect with Cognizant’s Engineering and Manufacturing Solutions Business
Unit. He has 15-plus years of experience in applied research and innovative solutions and has worked
in various domains, such as medical devices, automotive, process control and defense. Vivek is author
of several technical publications, and his research interests include intelligent systems, AI applications,
advanced controls and optimization. He has a master’s in electrical engineering from Tennessee Tech.
Vivek can be reached at Vivek.Diwanji@cognizant.com.
Nilesh Karmarkar is a Principal Architect with Cognizant’s Engineering and Manufacturing Solutions
Business Unit. He has 15-plus years of experience developing and architecting solutions and products
in plant automation and automotive domains. Nilesh has worked in areas of real-time control and
monitoring applications, automated test systems, simulation frameworks, redundant system designs
and supervisory control and data acquisition application development. He has a master’s in electrical
engineering from VJTI in Mumbai, India. Nilesh can be reached at Nilesh.Karmarkar@cognizant.com.
About Cognizant
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and business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50
delivery centers worldwide and approximately 150,400 employees as of September 30, 2012, Cognizant is a member of
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and fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: Cognizant.
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