Automakers are designing and updating their vehicle hardware designs so that the software can easily integrate with it

Tech companies will charge consumers a monthly or yearly fee to enable these services

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The automotive industry is poised to get a tech update. Like other software-enabled devices that are an inseparable part of our daily lives, our cars will also become a part of a technology-forward ecosystem. From voice commands to cloud services, the trends in the industry signal towards an interconnected web of devices, which includes our cars.

History

For the last century, automakers have focused on the mechanical side of car development, leaving software to third parties. But times have changed and software now plays a central role in our daily lives. People rely heavily on it—whether it is their mobile phones, televisions, household appliances or vehicles.

What The Future Holds

Software will become the primary profit growth driver for automakers across the globe. Automobile manufacturers will eventually become technology or software companies. Their primary goal will be to improve the user’s experience inside the vehicle. The vehicle will be an extension of the everyday devices we use—like a mobile phone. We will be able to communicate with our vehicle using our phones and voice commands. The first phase of this is already in place.

Market Trends 

Automobile manufacturers across the world are experiencing a shortage of semiconductor chips. As a result, car waiting periods have increased. Many vehicles, such as the new Toyota Land Cruiser have a four-year waiting list. It won’t be long before car manufacturers make their own semiconductor chips for their own vehicles.

Tech-Driven Automobile Industry

Amazon, Microsoft, Tencent and Apple are preparing to enter the tech aspect of the automobile industry. These industry giants are bringing the car closer to their respective ecosystems, opening doors to new vehicle-connected services. For instance, there is news that Apple has signed an MoU with Hyundai to provide its services in their cars. So, future Hyundai cars may come with pre-installed iOS (iPhone Operating System) that can connect all our Apple devices with Apple cloud services. 

Software as a Service 

Automakers are designing and updating their vehicle hardware designs so that the software can easily integrate with it. These can also be updated over the air (OTA). As a result, tech giants such as Apple, Amazon Web Services (AWS) and Microsoft have entered the automobile market. 

Revenue Models

These services will be made available to customers on a subscription basis. These tech companies will charge consumers a monthly or yearly fee to enable these services. The ultimate goal is to create a fully interconnected ecosystem of devices such as mobile phones, laptops, desktop computers, smart watches, televisions and smart vehicles.