Due to technological advancements, automakers are uniquely positioned to benefit from an industry-wide transformation. Technology now allows a direct connection between car manufacturers and the customers who purchase those cars. Such a relationship has never before been possible in the history of the automotive industry.
Technology now allows automakers to further this connection and cultivate a customer-centric approach, using real-time collected data and insights to respond to customer needs as they surface.
These levels of immediate responsiveness make sense, given how attached consumers are to their vehicles. According to the Center for Automotive Research at Stanford University, cars are a highly valued consumer product. After housing, they are the second biggest ticket item on an individual’s list of expenditures.
Software permeates so many aspects of our daily lives, and vehicles are no exception. Improvements in software-defined vehicles increase safety for drivers via driver assistance capabilities such as automatic emergency braking and blind spot warning.
These developments are driving future predictions of the evolving role of automakers, demonstrating their capacity to become major end-user tech companies in the future. The roots of this shift began with the rise in popularity of electric vehicles, which are more similar to computers in how they function.
Adding sensors and cameras already generates enormous amounts of data for vehicle manufacturers. By adding IoT integration as well, the boundary between automotive and tech companies becomes irreversibly blurred.
Emerj CEO and Head of Research Daniel Faggella recently sat down to talk with Daniel McGuire, Chief Marketing Officer at Qualcomm, on the ‘AI in Business’ podcast about how artificial intelligence has impacted the automotive manufacturing space.
This article will focus on the following key takeaways from their conversation:
- Enabling automakers to transition to software-defined vehicle architecture: Using a digital chassis as a foundation to provide a safe and connected driving experience.
- Allowing automakers to transform their legacy business model: Using car-to-cloud services to provide customers with a more personalized experience.
Listen to the full episode below:
Guest: Don McGuire, Senior Vice President & Chief Marketing Officer, Qualcomm
Expertise: Communications, Manufacturing, Product Marketing, OEM Management, 5G Technologies
Brief recognition: Daniel McGuire has a B.S. in Business from California State University, Chico. Before his current role at Qualcomm, he served there as Senior Vice President of Global Product and Technology Marketing. Prior to Qualcomm, he worked in global marketing for Intel Corporation.
Enabling Automakers to Transition to Software-defined Vehicle Architecture
The automotive industry is undergoing a significant transformation and is currently in the advent of what is known as the software-defined vehicle. An ample reason for this shift has to do with how car manufacturers are building vehicles. During his podcast appearance, Don explains in detail to the audience how original equipment manufacturers (OEMs) are building cars around the concept of a digital chassis.
The digital chassis consists of multiple components, including sensors, connectivity, digital cockpit, visualization for the driver, connectivity within the vehicle, and eventual connectivity to the cloud.
From a hardware perspective, a digital chassis requires multiple chips. The chips or sensors that make up the platform provide various levels of connectivity, including Bluetooth, Wi-Fi, and 5G capabilities.
These capabilities allow in-vehicle experiences, vehicle-to-vehicle experiences and vehicle-to-external experiences. The vehicle picking up on the external environment provides for improved safety because it enables an understanding of the environment around the car, which in turn allows real-time decision-making on obstructions around the vehicle.
Qualcomm offers its version of a digital chassis in its Snapdragon Car-to-Cloud Services platform. According to their website, Qualcomm’s Snapdragon Car-to-Cloud Services:
- Improve cost efficiencies for automakers
- Create service revenue opportunities throughout a vehicle’s lifecycle
- Offer drivers advanced user experiences
McGuire also explains in more detail the three pillars of a digital chassis:
- The connectivity suite
- Delivery of services, including visual, audio, and touch capabilities
- Car-to-cloud capability.
In explaining the significance of the connectivity suite, Don notes that, from a hardware perspective, a digital chassis requires multiple chips. The chips or sensors that make up the platform provide numerous levels of connectivity, including Bluetooth, Wi-Fi, and 5G capabilities. These features allow the car to become a node on the network.
The second pillar involves the delivery of services using visual, audio and touch capabilities. The second pillar addresses questions like:
- What does your dashboard look like in the future?
- What do the screens in the backseats look like for passengers?
- What is the voice interaction in the vehicle so that you can continue to drive but also have a conversation and do things?
- What are the touch capabilities?
The third pillar involves car-to-cloud capability, which allows for upgradeable services in the car and helps to create an enhanced vehicle experience. The upgradeability that car-to-cloud enables also allows consumers to delay decision-making on the day of purchase.
Don continues, telling the podcast audience that If customers change their minds later after purchase, they can always add services on demand. If you need to be more hands-free in the future, you can add driver’s assistance at that point.
He further explains how software-defined vehicles and all the data that is generated as a result will transform the industry, enabling car manufacturers the ability to:
- Deliver upgradeability to drivers
- Deliver over-the-air updates
- To improve the driving experience and extend the life of the vehicle
- Can offer new services from other providers, including entertainment services such as gaming or video streaming
- Other services, such as mapping data
McGuire also discusses how we are moving through the electrification and digitization of the driving experience. He mentions Qualcomm is thinking about car-to-cloud and what type of services auto manufacturers can implement in cars because of the connectivity.
Collectively, all of this is referred to as the digital chassis. Don mentions how an open and scalable platform allows automakers, for the first time, to change their business model and their relationship with car owners.
Allowing Automakers to Transform Their Legacy Business Model
Don also explains a seismic trend taking place in the auto industry where car manufacturers can get direct feedback from the customer and not have to rely on the dealership, which is causing the entire business model to shift. The upgradeability changes the dynamics of the resale market and can increase the longevity of vehicles and influence how long people will keep their cars.
“The more preventative maintenance or the more diagnostics we can produce on an ongoing basis of the vehicle means less time in service, less time without your vehicle, easier maintenance for the dealer and for the car company to actually deliver because it’s proactive. It gets the driver to take better care of their vehicle because it’s proactively notifying. Drivers won’t need to wait to be notified until the next time they take their vehicle in for service.”
– Don McGuire, Chief Marketing Officer of Qualcomm
He also describes a recent experience he had where he had to be without his electric vehicle for an entire week because the dealer didn’t have an available technician to look at the car. In the end, there wasn’t even an issue with his vehicle. The combination of car-to-cloud, 5G and real-time statistics and diagnostics will allow more things to be done over the air.
He explains how automotive brands directly advertise to the public by attractively presenting the cars and encouraging potential customers to buy or lease via approved dealers. He emphasizes how the relationship customers have was historically with the dealer, whether the dealership was corporate-owned or franchised.
Customers would first negotiate with the dealer, then test drive a particular vehicle, and then go back to the dealer with any problems after purchase. Subsequently, car manufacturers only had continued customer relationships beyond the initial investment.
He explains how a car company functions as a platform to deliver services that are applicable to the driving experience. Transitioning vehicle manufacturers to a service delivery model depends on being able to procure customer data from direct experiences in operating their vehicles.
Equipped with a complete digital chassis and requisite sensors, vehicles will be able to collect scores of data, providing automakers with direct insights into customer experiences and preferences – so long as they have the data management systems in place to cultivate that data properly.
