Connected car production is growing rapidly in both mature and emerging automobile markets, Gartner says. The production of new automobiles equipped with data connectivity, either through a built-in communications module or by a tether to a mobile device, is forecast to reach 12.4 million in 2016 and increase to 61 million in 2020.

“The connected vehicle is the foundation for fundamental opportunities and disruptions in the automotive industry and many other vertical industries,” said James Hines, research director at Gartner. “Connected vehicles will continue to generate new product and service innovations, create new companies, enable new value propositions and business models, and introduce the new era of smart mobility, in which the focus of the automotive industry shifts from individual car ownership to a more service-centric view of personal mobility.”

Connected car technology will create opportunities for automakers to generate post-sale profits by selling additional services and feature upgrades, as well as enhance brand loyalty through a more personalized customer experience. It will also enable innovations in adjacent businesses, such as insurance, car rentals, car- and ride-sharing services and electric vehicle charging.

Gartner predicts future connected car applications will drive a 150 percent increase in demand for contextual information, such as image detection and geolocation, from 2016 through 2020.

“CISOs should also contextualize their IoT approaches”, Gartner warned in July. “Some principles will emerge, such as updateability. Take the example of the connected car: The average lifetime of a vehicle can be estimated at eight to 10 years, while a smartphone has a life expectancy of approximately two years, after which security and OS updates become infrequent or cease altogether. This situation would lead to connected cars being vulnerable to attacks for six to eight years.”

About 80% of the new generations of automobiles will be connected to the internet by 2017, from 25 percent already. CEOs have started speaking publicly about smart cars, and developers admit to the security challenges facing the new market, according to Business Insights. Recent studies show electronic components now make up over 50% of the manufacturing cost of a car, with some cars now containing over 100 million lines of code, a clear source of worrisome security vulnerabilities.

Source: Gartner (September 2016)