The Role of the In-Vehicle App Store in the Age of Software-Defined Vehicles

The software-defined vehicle requires agile adoption of emerging digitally native experiences to take advantage of trends in the consumer electronics space. Arriving late to the party will leave Original Equipment Manufacturers (OEMs) struggling to maintain a competitive edge in the marketplace due to consumers’ expectations of new experiences being brought to them at rapid time frames. This expectation has been built off the work of technology giants such as Apple and Google with their expansive app stores, which enable communities of developers to contribute to and profit off the ecosystem the technology giants have built. The transition toward software-defined experiences in the vehicle has now made it necessary for OEMs to integrate such a feature. Several suppliers have facilitated this, such as ACCESS with its white-label app store, Twine4Car, and HARMAN with the Ignite Store. A previous ABI Insight, “Using Dedicated App Stores to Foster In-Vehicle Video and Gaming Streaming,” examined how these app store solutions bridged the divide between content providers and OEMs, but since then, their benefits have grown even further.

White-label app store providers cater to a central need of OEMs: maintaining their brand identity and control over data and their in-vehicle experience. Collecting numerous functionalities in a convenient app store design is indicative of the User Experience (UX) that consumers have grown accustomed to from their smartphones. By providing this service to OEMs, app store solution providers also give application developers access to multiple pools of potential customers. Instead of having to develop applications one-to-one (one application for one OEM), developers can publish their apps to multiple OEMs through a single app store upload, eliminating overlaps of effort. App stores also allow OEMs to outsource the resource-intensive process of building a rich suite of apps across multimedia, navigation, and productivity use cases.

By providing application template libraries, app store providers expedite the development process even further and foster innovation within their developer community. HARMAN provides an extensive library of templates, which covers web views, route overviews, and guides for Point of Interest (POI) apps, in addition to the Google-backed open-source templates available for its Android-powered platform.

The revenue generation potential of the in-vehicle app store is boundless as we enter the software-defined era of vehicles, where software will be the key enabler of new experiences in the car. The advantages for third-party app developers are clear, as they are exposed to more customers, but OEMs can also benefit. App stores present an ideal medium for them to market new features they bring to market throughout the lifecycle of their vehicles. Expanding the vehicle app store beyond the typical top 100 Android apps, such as Netflix or Spotify, to offering multi-domain, vehicle-specific software updates in the same marketplace will both enhance its revenue potential and make the app store feel truly OEM-owned. For example, digital dashboard skins to customize the vehicle interface is something that the Google Play Store cannot offer.

To properly capitalize on this convenient medium to bring new functionalities to the vehicle through a Feature-on-Demand (FoD) mechanism in the app store, OEMs must allocate resources to the right features. Focusing on the digitally native domains that provide the most value for end consumers will be the best approach to build a substantial stream of revenue. The most effective domains over the next few years will be Advanced Driver Assistance Systems/Autonomous Driving (ADAS/AD) features, as they add significant value to the driving experience. Building a reliable revenue stream from these features will also cover the increasing data costs of connected cars; in 2023, connected cars created 8.33 Gigabytes (GB) of traffic data every day, and the proliferation of Video-on-Demand (VoD), gaming, and autonomy will increase this figure significantly. VoD alone can use between 0.3 GB and 3 GB an hour depending on the streaming resolution.

App store solution providers must take note of what is important to their OEM customers if they want to thrive in the space; extensive customization to the OEM’s brand and ownership of data is now an expectation to compete, so they should look to UX and convenience to add value. Several software mechanisms such as Over-The-Air (OTA) updates, app stores, and FoD are present in the software-defined vehicle, so it is crucial to enable the OEM admin to control all these aspects conveniently with easy navigation for uploading new services. Similarly, minimizing the number of swipes, presses, and button pushes for the end user, and integrating simple and quick payment options will allow an app store ecosystem to thrive.

Looking to the future, in-car app stores will move beyond mirrors of the smartphone app store environment toward a fully integrated ecosystem of media and productivity applications, OTA updates, and FoD features. The increasing sophistication of virtual voice assistants will enhance the app discovery and payment process further, and OEMs’ efforts to build a reliable software revenue stream will be realized.