Mercedes not only cars: the business of the future will also come from software and digital services

INNOVATION

The star brand is committed to making the most of the potential represented by systems such as Mbux capable of guaranteeing revenues of hundreds of millions of euros over the next five years

by Corrado Canali

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The star brand is committed to making the most of the potential represented by systems such as Mbux capable of guaranteeing revenues of hundreds of millions of euros over the next five years

June 11, 2020

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Ola Kallenius, the CEO of Daimeler has said he has been convinced since his installation at the top of the group that the future goal should be not only to sell new cars, but to try to recover further and probably equally huge resources with digital. For example with the software updates that Mercedes drivers could increasingly find on the net even in a phase following the purchase of the car such as the driver assistance systems in particular in their most updated version or in the case of future electric models for ensure greater autonomy of use of the vehicle to improve its overall efficiency from the management point of view.

The MBux made its debut on the A-Class with the 2018 model year, so why not try to generate profits from the on-board hitech systems, for example by exploiting the potential of the MBux, the infotainment system introduced in 2018 on the A-Class and since then extended to the whole the range, including the new flagship, the S-Class ready for launch later this year. The potential for new business according to Kallenius himself is enormous, since it could generate revenues of several hundred million euros even relatively quickly. An increasing attention to software will therefore end up radically changing the automotive industry and also the relationship between manufacturers, in this case Mercedes and suppliers. The CEO of the German group Ola Kallenius has always made it clear at a recent press conference with the media stating that in the future we will try to decouple the hardware from the software to create a digital platform and therefore a business model similar to that of the smartphone app economy.

Starting point the innovative on-board infotaiment of all MercedesMBux is the acronym for Mercedes Benz User Experience and allows you to activate the operation of numerous functions in a very intuitive as well as natural way, for example through the recognition of movements. This is possible thanks to a camera inserted in the console that records the movements of the hands and arms of both the driver and the passenger who accompanies him. When the hand approaches the touchscreen display or the touchpad on the center console, the infotainment screen changes, highlighting the individual elements. Other features include hand gestures and personalized programs. One of the main features is voice control, so much so that the German car manufacturer is launching an over-the-air update intended for now only in some markets that will allow the use of more informal language. In China, it is already possible to book movie tickets or even order as well as pay for takeaway food even if you are traveling.

A system that was designed and built directly at home, but why is this technology supported by artificial intelligence so important also in terms of economic convenience? According to a recent report, the market for artificial intelligence systems in the automotive sector will generate global value from the $ 2 billion annually estimated today to over $ 26 billion expected within the next five years, which represents a huge change . Unlike other historical competitors such as the German premium brands, Mercedes has not tried to rely on some technological partner on the market, but has decided to invest in its own customized system according to your needs, creating its MBux at home. With the result that Mercedes in the future could end up generating revenues from its systems combined with artificial intelligence equal if not higher than those deriving from the sale of cars. Probably yes, given the potential that will justify the investments destined for the MBux. It should be noted that the German company is concentrating more and more to improve the system’s approach to users and not yet on the profits it could make, given that Mercedes has not planned, for example, to charge for the use of the services offered by the car. . While, on the other hand, it is studying how to guarantee the possibility of selling access to their platform, for example to the numerous app creators.

The goal remains to activate the various functions in total safety. Is this how the new business model could become a significant source of revenue? Probably yes. Take, for example, the voice function of the system which seems to be the main target of Mercedes, because the voice is considered to be the safest way to activate the functions of the system, since it allows the driver to keep his hands on the steering wheel and eyes on the road. For the moment, Mercedes is also not sure that a perfect way to interact with the car has been identified to the point that the investment in the interfaces must continue. To allow ordering and paying for takeaway food as is happening in China safely, the German brand has mobilized a team of experts who are evaluating the possible distraction of the driver and studying increasingly rigorous rules to eliminate all possible sources of distraction. . The possibility of ordering food safely directly from the car is designed with the aim of simplifying it and reducing risks. In short, Mercedes are working to try to make it possible to activate anything without looking at the screen

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