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Impact of M2M, small data on auto industry

Posted: 21 Mar 2013 ?? ?Print Version ?Bookmark and Share

Keywords:machine-to-machine communications? mobile network? eCall?

The huge trend on everyone's agenda at the moment is big data, however in the world of machine-to-machine communications (M2M) it's the small data that matters. M2M communications is helping automotive original equipment manufacturers (OEMs) better understand their vehicles' performance and driving behaviour. This enables OEMs to develop and evolve relationships by having informed conversations with their customers (dealers, suppliers and consumers) and deliver new, innovative value added services.

By using an embedded SIM card that transmits data wirelessly via a secure mobile network, M2M can collect important granular pieces of information from a vehicle which be put to a wide variety of useful purposes. This article explains the potential applications for M2M and the opportunities its adoption presents to automotive software and hardware engineers.

The industry drivers
In terms of the machine-to-machine industry as a whole, the automotive sector is by far the biggest, eclipsing its use in utilities, consumer goods and manufacturing. Some analysts predict that the sector will generate up to $199 billion in revenue in 2020. Adoption is being driven largely by EU regulations supporting the implementation of eCall. By 2015, all new cars will be required to have M2M technology that allows their car to automatically notify the nearest emergency centre when the driver has been in a crash.

The cars will be required to send a 'minimum set of data' to the emergency services including the exact location of the crash site, time of incident, and the direction of travel. As a result of this technology response times will improve by up to 60% in built up areas, and many more lives will be saved.

There are two options for implementing this mobile technology; firstly the tethered phone option. This would enable the eCall system to operate from the SIM that is inside of the consumer's mobile phone which would be 'tethered' to the vehicle via Bluetooth or USB connection. The other is the embedded SIM, where the card is fitted inside the vehicle and connects automatically when an impact is detected.

The EU Commission strongly recommends the latter option since the tethered approach only works if the driver remembers to connect their phone (typically via USB, Wifi or Bluetooth) and their battery is charged. The driver also has to ensure the phone is with him or her at all times. An embedded SIM removes this uncertainty and will lead to more consistent responses. Many people within the industry are predicting that the EU Commission will soon make the embedded SIM mandatory.

The M2M opportunity
eCall technology has the potential to be as influential on road safety as seatbelts and airbags. However it comes at an upfront cost to OEMs who have to install new mobile connectivity in their vehicles. As a result, OEMs will be particularly keen to realise new revenue opportunities that this new found connectivity will present.

Cars can produce a vast amount of useful information, but the difficulty has always been extracting that information and turning it into something meaningful. With M2M, the biggest opportunity lies in its ability to establish a two way communication between the car and service provider. Previously, only a one way connection existed e.g. sending traffic information to a vehicle via RDS-TMC.

Driver behaviour
The tracking of driver behaviour has the potential to be one of the biggest growth areas for M2M deployment, provided the driver is happy to give their permission for the data to be collected. One possible application could be offering usage-based insurance models that can charge in relation to individual driving habits. The SIM card can send information to insurers about the driver's speed and driving behaviour. Safer drivers can benefit from paying lower premiums.

Information about how a car is being driven is also useful to rental car companies and owners of vehicle fleets. Users of the cars can be charged more or less based, for example, on how they look after the car and whether they conserve petrol. This has the potential to extend the life of the vehicle and reduce the loss of value over time.

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