Smartphone apps are becoming a key selling point to car buyers in North America as well as in Europe, according to a report that Frost & Sullivan released this week. For electronic component suppliers, there will be more demand for in-car consoles that can display smartphone apps.
Last year, 25 percent and 23 percent of cars sold in North America and Europe, respectively, were able to run smartphone applications, according to Frost & Sullivan. The majority of cars will be equipped with smartphone interfaces in as little as five years in the two regions, although Europe's penetration will be slower than that of North America's, the report said.
Relying on third-party software developers to create smartphone apps for cars is more cost-effective compared to when automakers develop propriety driver and passenger interfaces in-house, according to the report. Carmakers will also benefit from much shorter development cycles since users will be able to use and buy smartphone applications as they are developed, compared to design cycles of five or more years for proprietary Internet/navigation/video applications that are built into cars.
For the consumer, the availability of smartphone apps for use in the car means that such informative and/or entertaining applications can be purchased and used as soon as they become commercially available. Navigation systems built into car consoles can cost over $1,000 as an option at the dealership, which customers are stuck with during the lifetime of the car. Instead, smartphone navigation systems for car use can be replaced and updated several times during the lifetime of the car at a significantly lower cost.
Ford's Sync system represents the most ambitious effort among mainstream carmakers to date. The Sync accommodates several navigation and entertainment smartphone applications on a dashboard console with voice-activated commands. Toyota's Entune system also offers voice-activated features for audio and navigation applications that can run from smartphones that are docked to the system.
However, luxury carmakers such as Audi, BMW, Mercedes, and Lexus will continue to offer their proprietary technologies that are built into their cars. But Frost & Sullivan notes that they will also increasingly offer smartphone interfaces "as an added feature to address consumer interest."
BMW, for example, plans to offer a system in as early as three years that will allow drivers to dictate and send emails and text messages with voice-activated commands. But the German luxury carmaker is also accommodating smartphone applications. For example, some of BMW's North American models allow BlackBerry email messages to be read out loud over the stereo system.
However, a lack of standardization among the different platforms and docking stations could be problematic for the wide-scale adoption of smartphone applications, Frost & Sullivan asserts. Developing a standard protocol for easy integration of portable devices with vehicles is difficult because of varied OEM products and consumer electronics lifecycles, the analyst firm says.
Already, smartphone applications that run on the iPhone often work in select models, while car docking stations can often just accommodate an Android or a BlackBerry, but not other smartphones. No standards body has yet adopted a common standard for all smartphones and applications for different car models.
The potential distraction that smartphone apps pose for drivers also represents a potential negative factor that could slow down adoption, Frost & Sullivan notes. While one can legally use voice-activated, hands-free applications in the car in North America and Europe to make and receive phone calls, what happens when drivers begin to use voice-activated commands to send and receive email, find available parking spaces, or concentrate on other applications while behind the wheel? So far, legislation does not exist that prevents drivers from using any of these applications in North America or Europe, yet distraction will remain an issue and could be legislated in the future.
Meanwhile, more and more smartphone apps will become available for drivers in the future, and carmakers will increasingly seek to accommodate them. For automotive suppliers, the dashboard consoles will represent the main opportunity. However, the future of smartphone apps for cars is far from certain.
The rollout of the applications on an industry-wide scale could come to a halt if the standards problems do not get resolved in a few years, or if using smart applications turns out to be very unsafe. However, the role smartphones will play in the "infotainment" sphere should be determined within a couple of years as these issues are addressed.