NewtonX recently wrote about how one of the biggest opportunities in the smart speaker space is auto partnerships, as evidenced in part by Amazon’s recent rollout of Echo Auto, which has over 1M pre-orders. However, voice technology integration with cars is just one aspect of the rich potential for remaking auto dashboard displays. This “fourth screen” has the potential to generate over $400B in new revenue by 2025 through integrations with insurance companies, targeted advertising from restaurants and other services, and on-the-go services such as paying for gas or coffee via the car screen interface.
NewtonX delved into the car screen market through two large-scale surveys, one with auto screen leaders at tech companies looking to get into the space, including Amazon, Apple, and Google; and one with executives at auto companies, including Ford and Daimler AG, that are developing proprietary screen technology or partnering with a tech company.
From Advertising to IoT: Why Auto Screens Are One of The Richest Tech Opportunities of This Decade
Drivers are, quite literally, a captive audience. However, the auto industry has struggled to meet evolving consumer demands for ease of use and accessibility with screen interfaces, giving consumers a frustrating combination of outdated dials and glitchy touch screens. Now, tech giants including Amazon, Apple, and Alphabet have begun an aggressive campaign to get their technologies in people’s cars — to mixed responses from automakers.
Some auto companies, such as Volvo, have embraced Silicon Valley expertise in the matter and implemented tech giant car systems in newer models, Others, such as Ford Motor, Volkswagon, and Daimler AG (the auto company that makes Mercedes Benz), fear tech giant encroachment, and are building their own smart car screen systems that they believe can compete with those produced by Google and company.
For all involved, cars represent a unique opportunity. The average American spends just under an hour per day driving — during which time they are free from distractions or other screens. Additionally, because users are in motion, advertisers and other services providers have a rare opportunity for micro targeting based on a user’s location and projected path.
For instance, McDonald’s recently partnered with Waze to reinforce billboard messaging and direct customers to nearby locations. After passing a billboard, drivers would be targeted with advertisements in the app with messages like “Stop by McDonald’s? Only takes three minutes off your ETA”. Over the course of the eight week campaign, over 8,400 people navigated to promoted locations and impressions went up by 6.4 million. Similarly, cars present a unique opportunity for IoT providers that want to increase engagement. For instance, Amazon’s Echo Auto allows users to tap into Alexa while on-the-go for numerous tasks including controlling smart home devices, such as unlocking doors, turning off lights, or turning up the thermostat. Because the system is hands-free, it’s uniquely suited to driving.
Finally, smart screens offer a unique opportunity for insurance providers, who can caution drivers who may be going above the speed limit or otherwise violating traffic laws. Many insurers already offer lower premiums for people who use smart monitoring devices in their cars to prove driving reliability.
Who Will Win the Battle for the Fourth Screen?
Currently, Google is the uncontested leader for auto dashboard technologies. Google’s software, which comes as a customizable free version or an integrated system, is in 19% of all car operating systems. This number is expected to rise now that Google entered into a partnership with Nissan-Renault-Mitsubishi to install its OS in the over 10 million cars the alliance sells every year.
Many carmakers are still wary of partnerships with tech companies, though, and have either built their own systems entirely, or built highly customized systems on Google’s software (such as GM did).
Both tech giants and car manufacturers face a major challenge when it comes to in-car experiences: people tend to hang onto their cars much longer than they hang onto their other electronics, and automakers typically install and fit screens into cars at least a year before the car is released to the public. This means that making a system that can be easily replaced with an updated version is important, as is enabling software updates. Additionally, both automakers and tech companies need to ensure that their systems do not become incompatible with smartphone operating systems 5-7 years from now.
These challenges explain, in part, why in-car technology has remained such an untapped opportunity. In the coming years, however, we will see the fourth screen become one of the biggest areas of investment for automakers and tech companies alike.