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Wearables & Connected Car Markets Beginning To Overlap

But they face similar questions about their futures 9/23/2015 03:30:30 PM

Swedish automaker, Volvo, has announced an update to its On Call app that allows drivers to control various functions of the vehicle from certain wearables, including the Apple Watch and Android Wear devices. Users can remotely locate their vehicles, start the engine, lock and unlock the vehicle’s doors, and initiate or set timers for cooling and heating the car from the app.

Volvo joins BMW, Hyundai, Porsche, and Volkswagen in integrating wearables into its connected car feature set. Each of these auto manufactures has launched or announced an app available for Apple Watch and/or Android Wear. Yet, integrating automotive functionality with wearable technology is at a very early, even experimental, stage. Currently most consumers wearing smart watches are early adopters, but with Apple joining the smart watch market, the industry is likely to expand significantly. Parks Associates data shows that 6 percent of U.S. broadband households owns a smart watch, as of Q1 2015; an additional 9 percent intend to purchase a smart watch over the next 12 months.

These auto-wearable announcements come at a time when both ecosystems are facing similar questions about their futures. Both are still relatively new markets with nascent app development ecosystems. Both face consumer and regulatory scrutiny over data privacy and security. And, both have a love-hate relationship with the smartphone.  In the connected car space, rising consumer demand for high-quality connected car experiences is clearly driven, in part, by the increased expectations set by smartphones. Smartphones have helped consumers to imagine what is possible from connected devices, and auto manufacturers are rushing to offer their customers new features that enhance both the driving and car ownership experiences. On the other hand, the mobile OS platforms threaten the auto OEM’s role in the ecosystem. Mirroring technologies, like Apple Car Play and Android Auto, will provide an in-dash smartphone experience; to keep car owners engaged with their brand, auto OEMs and their partners must find ways to provide value on top of the smartphone experience.

Smart watches are even more dependent on the smartphone ecosystem – most must be paired with a smartphone to connect to the Internet, and many features available on the smart watch are linked to a more full-featured version of the app that resides on the smartphone. Smart watches, then, must convince users of the convenience of wrist-worn access to many of the same features that are available on the phones that reside in their pocket or purse. This issue is particularly relevant for connected-car-apps that are designed for wearables, since current smart watch functions primarily focus on remote access or control of the vehicle’s functions or navigation and roadside assistance services. These functions are not meant to take place within the car and could all just as easily take place – with more real estate – on the smartphone.

Smart watch manufacturers, automakers, and app developers will have to work together to make using a smart watch easier, more enjoyable, or even more functional than simply using the phone. Interaction directly between the watch and the car – say for locking and unlocking doors, or even as a key to start the car – would be one such feature. The connected car and smart watch markets are poised for growth, but both need to grow their app ecosystems and create new experiences that are distinct from the smartphone. Players on both sides benefit from cross-industry partnerships.

For more information on the smart watch market, see Parks Associates’ industry report Smart Watch – Extending the Mobile Experience, as well as the 360 View Update- Marketing Focus study Smartwatch and Beyond: New Mobile Experiences.

For a detailed perspective on the connected car market, see Parks Associates report The Connected Car and Smart Home: Crossover Opportunities, as well as the 360 View Update- Marketing Focus Connected Car Services and Apps.

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