Automaker apps fall short

20 September 2012

NEW YORK: Less than a third of drivers in Germany, the UK and US would be willing to pay for apps they can access via car dashboards, an area many automakers are currently exploring.

IMS Research, the insights group, polled 2,250 people in these markets, and found just 28% would buy apps that were made available through systems installed in their vehicle.

"This comes at a time when more and more vehicle manufacturers are offering connected head units which feature apps," said Nimisha Patel, analyst at IMS Research. "However, unless they are able to come up with a viable business model, the revenue generation from apps is likely to be limited."

Moreover, the report revealed that, while 55% of the respondents who owned smartphones and tablets would be happy to buy any kind of app, around 70% of people with these devices had never done so.

Nearly 60% of contributors also stated a preference for accessing car-specific apps through an App Store on a smartphone, rather than using a digital platform run by an automaker.

As such, the analysis suggested, it was unlikely that manufacturers would open up a "significant revenue stream" by exploiting apps, or be able to meaningfully leverage related sources of income, like advertising.

Ford is one company that has made some progress in this area to date, with its SYNC in-car communications and entertainment system. General Motors boasts a similar platform, called OnStar.

According to IMS Research's study, the main purpose of the apps made available via such platforms could thus be to build brand loyalty, which is "perhaps a more valuable commodity in the long term".

If apps were made available in cars, those closely linked to driving, and especially for navigation, would be the most popular. The fact habits are still evolving may also offer some hope for carmakers, the study added.

Data sourced from IMS Research; additional content by Warc staff