OEMs are arriving at an industry inflection point, as connected vehicles become mobile hardware and software platforms – driven by increasing edge-computing and communications capabilities – and each containing hundreds of chips. OEM’s core business models must evolve, along with their core competencies, to fully embrace a new Integrated Connectivity Ecosystem model that can help them maximize their company economics through business models previously unavailable to their industry.
While this evolution will take decades to complete, the Vehicle-as-a-Platform inflection point indicates that Connectivity can no longer just be a capability in OEM product roadmaps – but needs to become something more, something that OEMs own the creation of as a separate business unit with its own business models, growth goals, revenue streams, customers, and partner ecosystems.
Connectivity as an owned core competency rather as a feature or participant business will increasingly determine winners and losers among auto manufacturers within that timeframe.