How connected cars are driving mobile eCommerce applications

Automobiles are getting smarter and more connected to the world around them. The term 'Connected Cars' refer to devices installed in the vehicle which allow machine-to-machine (M2M) communication or machine-to-human interaction.

M2M is communication between two single machines with no human interaction. Regarding vehicle telematics, M2M technology enables data to be sent from the vehicle to another location and used for vehicle conditioning or to monitor driver behaviour.

Connected cars market development

According to the latest worldwide market study by Juniper Research, 775 million consumer vehicles will be connected via telematics or by in-vehicle apps by 2023, rising from 330 million vehicles in 2018. This is an average annual growth of 18.7 percent over the next 5 years.

Juniper forecasts that automotive OEMs will enable in-vehicle infotainment systems to be accessible to third-party developers. In turn, this will accelerate the expansion of new technologies and services that will increase the value proposition for drivers.

In this context, Juniper anticipates the growth of in-vehicle 'voice assistant' use, as well as in-vehicle commerce transactions via mobile wireless communications.

The study found that the total spend over connected car eCommerce platforms will reach $265 billion by 2023. In order to cultivate a workable commerce ecosystem, Juniper urged stakeholder collaboration between automotive OEMs, network operators and payment solutions providers.

Juniper analysts recommend that the provision of application programming interfaces (APIs) and development platforms that enable third-party development of payment-capable in-vehicle apps is essential to the creation of new and innovative OEM services.

"Until the market gains new entrants from outside the automotive ecosystem, the increase in transactions will be driven by convenience for the user, rather than the creation of new services themselves. By 2023, we expect that in-vehicle commerce transactions will be less than 1 percent of mobile and online transactions globally," said Sam Barker, senior analyst at Juniper Research.

Outlook for connected car applications

Juniper analysts also forecast that over 370 million in-vehicle digital voice assistants will be accessed by 2023. However, in-vehicle assistants must be given access to the vehicle’s basic functionality, such as climate control, to offer a differentiation point to smartphone-tethered options.

Juniper predicts that automotive OEMs will increase this access to vehicle systems, however mitigating risks, including security of data and driver distraction, will remain the highest priority.

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