However willingness to pay per service quickly declines as customers get used

However willingness to pay per service quickly

This preview shows page 19 - 21 out of 36 pages.

corresponding demand. However, willingness- to-pay per service quickly declines as customers get used to it (commoditization). Provision of “5th screen” content (e.g. content shown within the car) offers high GMV , but limited margin potential due to low commissions. In-vehicle advertising with some potential, but likely to collide with OEMs brand values. OEM’s ability to maximize profits from connected features depends often on their pricing strategy and efficiency of data usage. While car makers have limited direct monetization potential with connected services, they significantly contribute to overall customer experience. B2C monetization of connected Services (on-top) B2B monetization of 5th screen content Comments Digital vehicle service archetypes 1 Vehicle features as a service 2 3 Vehicle-centric connected services 5th screen connected services 4 5 Beyond-vehicle services Data/insights services Estimated market size development, US (in USD billions) Strategy& | PwC
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Despite innovation in connected services, the auto industry’s share of value is still low Connected services: an evaluation of recent offerings Source: Strategy& analysis 20 Commerce platform embedded into vehicle infotainment system • Currently low technological adoption in automotive industry, but accelerating traction especially in the US In-vehicle market- place In-vehicle voice assistant Voice-enabled virtual personal assistants integrated into vehicle infotainment center • Recent strong customer adoption observed , focus on two key use cases : providing navigation information and initiating phone calls Pay-by-use vehicle features Vehicle-specific add-on services/ functions to be digitally booked by vehicle occupants (prerequisite: availability of inactivated components in every vehicle) Currently only limited implementation observed (e.g. navigation upgrade) 1 2 3 4 5 Vehicle features as a Service Vehicle-centric connected services 5th screen connected services Beyond-vehicle services Data/insights services Digital vehicle service archetypes Partnerships with merchants and advertisers Standardized technology platform Scalability dependent on “additional usable time” enabled by automated driving Maintaining control over customer data, while sourcing language processing system from tech players Integration of voice assistant with customers’ assistants from other domains (e.g. smartphone, smart home) Identification of suitable components to yield healthy cost/benefit relation Effective definition of price model and price points to avoid cannibalizing vehicle option revenues when the car is first sold On-top revenue possible, but limited to commissions/ad prices Negotiation power of global partners narrows profit potential Limited revenue potential, as similar services are already standard in other domains (on smartphone, at home) Strong potential for customer experience differentiation and links to other in-vehicle services Limited additional revenue potential. Mainly one-off revenues as vehicle options
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  • Fall '20
  • Automobile, Electric vehicle

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