2016 Is The Year of The Automotive Ecosystem

At CES 2016 CloudMade’s executive team walked executives from over 30 automotive OEMs and suppliers through the results of analysis undertaken by CloudMade in Q4 2015.  The results suggest that for OEMs to succeed in a world of increasing competition from consumer electronics giants like Google, Apple, Uber and Facebook, they need to build and own their own ecosystems.  

This presentation draws on data from multiple sources to present a compelling argument for automotive OEMs building and owning their ecosystems based on the products of CloudMade and its partners.

February 18th, 2016 - Posted by Nick Black in connected car, ecosystems, for OEMs, self-learning car

Creating Lifelong Customers For Your Brand

The biggest opportunity that the connected car offers to OEMs is that of generating lifelong loyalty with the your brand.  A key metric to look at when assessing loyalty is churn rate.  In the smartphone space the leaders are Apple – so loyal are their customers that analysts speak of them having created an annuity model.  An $800 iPhone purchase is actually $800 every year or two for as long as Apple remains at the top of the smartphone game.

CloudMade works with auto OEMs to help them engender Apple-like loyalty amongst their customers.  We do this by offering the driver access to a range of “self learning” functionality ranging from navigation systems that are able to preempt drivers’ travel plans to help them save time and frustration, to safety systems that act like a coach, helping people become safer, better drivers to cabin systems that adapt the preferred climate settings of the passengers.  Over time the car gets to know its driver and its passengers, offering them an increasingly customized experienced each time they driver.  After a few weeks driving a car built using CloudMade’s solutions the driver is compelled to explore more and after a few months they’re hooked.  When its time to buy a new car, the driver’s decision is already made.  Just ask yourself how many people you know who’ve switched from Apple’s ecosystem to Google’s?

In this short 5 minute presentation I gave at the Autotech Council in Santa Clara last week, I talk through these concepts and give a few examples about how CloudMade helps OEMs build lifelong relationships with their customers.  Enjoy and please leave a comment with your feedback below.

Get in touch to find out how CloudMade can help you build a lifelong relationship with your customers via the cloud.

September 23rd, 2015 - Posted by Nick Black in connected car, ecosystems, for OEMs, self-learning car

Today, the Handset; Tomorrow, the Automobile. The Present and the Future of the Ecosystem Approach.

[Using the example of Apple and Samsung]

Ecosystems, now more than ever, play an important role in company’s strategy and ability to drive consumer success. Businesses that construct rich ecosystems around their solutions enjoy greater profitability and stability, due to increased pricing power and consumer loyalty. Now consumers want their devices to work seamlessly together for better user experience. User profile control and management is a central enabler of an ecosystem strategy.

According to Q4 2014 smartphone sales figures, Apple made more money than all of its competitors combined, capturing 93% of the profit in the mobile device market. Samsung, a recent leading incumbent in the telecommunications industry, made 9% of the profit for the quarter. Numbers add up to over 100% as other players like HTC, LG, Motorola and Nokia are losing money from their mobile divisions.

Apple vs Samsung Profit Share

The figures above illustrate remarkable phenomenon in recent business history: a key player in the handset industry faces a continued profit share decline. Simultaneously, a company that had almost no presence in the smartphone market 8 years ago takes the lead, gobbling up the profit from a long-standing giant.

[click to continue]

Numerous large, once-successful businesses fail because of a lack of differentiation from competitors, and a failure to adapt to market shifts. The example from handset manufacturers, which needs to be applied to automobile makers as well, should lead us to think of crucial keys to business success. Here, ‘success’ refers to the ability of a company to create a sustainable platform-based ecosystem of complementary products and innovation around itself – Tweet That! In this case, the primary issue for Samsung has been its decision to go with an open platform approach in contrast to Apple’s closed platform and intense focus on ecosystem development.

Apple understood early that “software is eating the world” and that it is necessary to create a rich ecosystem around its products to increase the value for customers and grow business. Samsung, on the other hand has been mostly reliant on Android OS and continues to operate within an ecosystem that other vendors control (Facebook user ID, Google Maps for navigation, Google Play Store). However, Apple’s ecosystems is unmatched with such components as iCloud, iTunes, App Store, Apple Pay and AppleCare protection plans. Success factors of Apple’s iOS Ecosystem are:

Success Factors of Apple’s iOS Ecosystem

The growth of connected cars could cause a similar redistribution of profits among automakers and other companies that are trying to enter the automotive industry. If car manufacturers want to secure their business and remain the sole provider of revenue-generating services, they should create rich ecosystems around their products and focus on producing complete, end-to-end mobility solutions. Due to safety concerns, automakers have a good argument for implementing a walled garden approach to application development. The automakers’ market shares in the new environment are at risk if they are slow – and for the taking if they are fast.

Check out our website for the Connected Car building blocks and solutions: www.cloudmade.com

March 17th, 2015 - Posted by in connected car, ecosystems