5G and the connected vehicle: the foundation for auto manufacturers’ data strategy.

Matt Arcaro, Senior Industry Analyst, IDC

Where does vehicle connectivity sit on the list of automotive manufacturers’ strategic priorities?

The automotive industry is in the midst of its most significant technology revolution in the last 100 years. As a result, automotive manufacturers are heavily investing to modernize all aspects of their business including but not limited to vehicle development, testing, manufacturing, sales, service, and lifecycle management. Although these modernization goals are broad and comprehensive, there is one key commonality that spans each of these domains and that is to unlock the power of data. The connected vehicle is a primary pillar that automotive manufacturers are building their all-inclusive data strategy around.

Yet, this thinking about the need to drive connectivity and data access to and from all vehicle systems and subsystems is relatively new for automotive manufacturers. IDC had previously seen a majority of manufacturers isolate the reach and influence of their connected vehicle organizations to focus on specific critical use cases and regulatory requirements. Thankfully, this changed when manufacturers raised the profile of vehicle connectivity to a board-level, top-down initiative, which in turn forced the people, process, and technology changes necessary to shift connectivity from being seen as a cost to an integral business and customer enabler.

5G offers new capabilities and features that will enable automotive manufacturers and suppliers to leverage connectivity for use cases beyond convenience and into more critical, real-time vehicle and business functions.
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How does the emergence of 5G fit into an automaker’s strategic view of connectivity?

With automotive manufacturers now fully bought in to the need to build out a broad, multi-function connected vehicle strategy, the timing for the emergence and deployment of 5G couldn't be better. And 5G isn't just an upgrade of prior generations (i.e., 4G and 3G); it offers new capabilities and features that will enable automotive manufacturers and suppliers to leverage connectivity for use cases beyond convenience and into more critical, real-time vehicle and business functions. In particular, the key benefits of 5G networks include improvements in:

Security. 5G has been designed to help protect critical data and devices including support for stronger encryption standards, anonymizing device identities, and hardened, virtualized network infrastructure.
Latency. 5G in conjunction with a comprehensive edge computing infrastructure footprint has been designed to support critical, time-sensitive use cases.
Quality of Service. Leveraging technologies like network slicing, 5G enables customers to define, manage, and adjust key device and use case connectivity requirements.
Speed. 5G was designed to support extremely high bandwidth use cases.

These improvements and new capabilities continue to drive interest from automotive manufacturers. In particular, they are looking for opportunities to better understand and benchmark where and how 5G can deliver increased value.

Automotive manufacturers should prioritize including 5G hardware in all vehicle programs to take advantage of new, emerging use cases while also supporting greater resiliency and future-proofing.
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How is IDC thinking through 5G's role to support connected vehicle use cases?

Although 5G will greatly improve the breadth and reach for connected vehicle use cases, it's important to note that the vast majority of near-term vehicle use cases can be supported on 4G (or even 3G). This thinking aligns with what we know from history with regards to 4G's deployment and roll out, where many of the "killer" 4G use cases emerged well after the new network deployments reached maturity. Thus, IDC believes that all automotive connected vehicle use cases should be viewed through a filter of being either "5G-enabled" or "5G-enhanced." 5G-enabled use cases are those that can only be delivered and supported over a 5G connection and include the real-time sharing of vehicle sensor data, on-board compute augmentation, and even cooperative driving. 5G-enhanced use cases are those that can be supported over legacy connections but are improved on 5G and include over-the-air updates, streaming infotainment services, and telematics.

It is worth noting that automotive manufacturers should prioritize the inclusion of 5G hardware into all vehicle programs to take advantage of new, emerging use cases while also supporting greater resiliency and future-proofing.

How are mobile operators stepping up to the plate to deploy 5G commercially?

Mobile operators have fully embraced the roll out of devices, and are making the network investments as well, to bring 5G to market now. However, 5G network deployments deliver very different characteristics based on the wireless frequencies deployed. In particular, there are three different spectrum band categories that must be separated to tell the whole picture, including:

Low-band (less than 1 GHz) allows for broader network coverage including penetrating buildings at the sacrifice of speed.
Mid-band (1 to 6 GHz) offers a compromise between broad network coverage and fast speeds.
mmWave (greater than 6 GHz) provides devices with the fastest speeds but does not support broad coverage.

In the near-term, low- and mid-band 5G deployments will be the sweet spot for automotive use cases. That's because their combination of nationwide coverage and 5G capability improvements will provide the greatest likelihood of supporting the diversity of vehicle travel.

Prioritize the procurement and integration of 5G hardware into near-term vehicle programs. A vehicle's lifecycle is 10+ years and although 5G may not be needed today, it will be before these vehicles are sunset.
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What advice would you give to an automotive manufacturer looking to define, refine, or accelerate the role of 5G as part of their strategy?

In light of the many competing priorities of automotive manufacturers, IDC provides the following recommendations to help automakers embrace and better utilize 5G:

Prioritize the procurement and integration of 5G hardware into near-term vehicle programs. A vehicle's lifecycle is 10+ years and although 5G may not be needed today, it will be before these vehicles are sunset.
Work with carriers to understand current and future 5G coverage availability. Use these interactions to align on priority use cases including key performance requirements.
Remember that the 5G connectivity link represents only one part of a connectivity use case. Ensure that your end-to-end connected vehicle strategy supports real-time data flows and requirements.

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