The clockspeed dilemma

More new innovators in 

autonomy are entering the 

ecosystem, disrupting the 

traditional supply chain. 

Mobileye  and VocalZoom 

aren’t Tier 1s or OEMs but 

nontraditional sources now 

active in the auto space.

New geographic centers 

for autonomous innovation 

have emerged in locations 

ranging from Silicon 

Valley to Tel Aviv. In 

sum, developments in 

autonomous vehicles may 

appear in any number of 

locations worldwide.

Image provided courtesy of NVIDIA

The clockspeed dilemma      23

© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network 

of independent member firms affiliated

 

with 

KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. P rinted in the 

U.S.A. The KPMG name, logo and “cutting through 

complexity” are registered trademarks or trademarks of KPMG International. NDPPS 404853

---

Acceleration in connectivity 

The technological changes in autonomy have led to new 

and extraordinarily resourceful players in connectivity, 

competitors who are forcing an accelerated pace of 

innovation for connected vehicles.

Predictable innovations

Over time, we expect to see fleets of connected vehicles 

working with telecom and wireless companies to create 

a comprehensive infrastructure—one that supports the 

anticipated demand for consumer access, navigational 

accuracy, and the immense amounts of data required to be 

streamed to and from every vehicle. 

We expect to see 

fleets of connected 

vehicles working with 

telecom and wireless 

companies.

Cars will connect with the infrastructure and stream 

telematics information about traffic, road conditions, and 

lane speeds. Vehicles will constantly self-identify, monitor 

the surrounding environment for hazards and potential 

threats, and adjust navigation and guidance to address 

those dangers. Automakers will collect data to monitor the 

individual status of a car or to fix problems in a particular 

model preemptively.

Passengers will be able to access streaming data feeds 

for entertainment and to utilize their handheld devices for 

on-the-move data streaming. They will also use their cell 

phones to locate their cars, turn them on, or assess their 

repair status. These innovations will, of course, greatly 

improve the driving experience of the consumer, produce 

greater safety, and increase longevity for the car.

Together these innovations will dramatically enhance 

connectivity between the car and external networks; 

connectivity that passengers use for entertainment 

and communication; connectivity between the car’s 

internal systems; and security for all connectivity. Each 

of these changes will require high-speed ubiquity in the 

communications environment.

Enter the new players

These predictable innovations are only the beginning 

of changes in connectivity because of what this new 

communications environment attracts. Many aggressive 

players are now entering the connectivity space. A short 

list includes not only makers of chips, pipes, receivers, and 

software, but also data aggregators and content providers. 

The sheer number and power of these players will drive 

phenomenal, fast-paced innovation that could arrive in 

cars at any time. Since many of these innovations may not 

come from the auto industry, automakers will need to work 

closely with those driving changes. 

Economies of scale and changing competitive 

advantage

Automakers will be facing players whose economy of scale 

and investment capacity is significantly higher than theirs. 

The Apples and Googles of the world produce hundreds 

of millions of units rather than the millions of units the 

car industry manufactures. According to Gartner, global 

smartphone manufacturers sold 1.245 billion units in 2014. 

That same year, the auto industry sold 87 million cars. 

These big players in the connectivity space can amortize 

their research and development budgets over a far 

larger base than automakers can. They are also free to 

spend more than car manufacturers, who must devote 

considerable R&D dollars to maintaining the Robust 

Industrial Machine.

Embedded connectivity versus hybrid and nomadic 

devices: Vigilance  required

That advantage in scale is especially important since the 

auto industry’s embedded devices must compete against 

hybrid and nomadic ones. It makes decisions especially 

difficult, requiring great awareness of changes in the 

ecosystem and an ability to respond flexibly and fast. 

Of course the connected car has some elements that 

are better served by embedded technology, especially 

telematics and vehicle configuration. For other connectivity 

elements, however, the industry must pay careful attention 

or risk losing a competitive advantage. Hybrid and nomadic 

devices are more readily innovated and more able to 

respond to consumer expectations nimbly. 

With three different kinds of connectivity devices 

undergoing innovation, there is also greater possibility that 

consumers’ unmet needs may increase and change in a 

number of unpredictable directions. One effect this may 

have will be diversifying the idea of premium performance 

based on demographics, as we suspect may happen in 

mobility-on-demand. Airlines already sense this change 

and are debating whether they should provide embedded 

entertainment devices or set-ups to which consumers’ 

devices tether—hybrids. Consumer demand may well drive 

them and the auto industry in a few directions. Targeted, 

mission-specific performance may be the wave of the 

future in connectivity.

24

© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International 

Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the U.S.A. The KPMG name, logo and “cutting through complexity” are registered 

trademarks or trademarks of KPMG International. NDPPS 404853

---