Are cars the new smartphone?
It doesn’t take an advanced degree to tell that cars are changing. Gone are the days of the flooded carburetor and “tune-up” executed by twisting a distributor cap. The ubiquitous sensor chip is even going away. Cars today are networked, with various parts communicating other parts to make everything work.
Wireless connectivity has been creeping into cars since 1996, when GM introduced its OnStar system, used to contact emergency services and also to disable a stolen vehicle. Now cars can run mobile apps like Pandora for music, Google Maps for navigation, and other apps to help you find your car in a busy parking lot. New network features might alert you to icy roads ahead—or even adjust your settings for you.
All this functionality raises the prospect of distracted driving. Narrow, winding roads with heavy traffic are already dangerous. Distracted drivers can make them deadly. And hackers could target an auto’s computer system.
Smart-cars are part of the growing “internet of things,” where trillions of components continuously communicate. It might turn your iPhone into a remote starter, but it could also let someone else turn your car off.
Douglas R. Tengdin, CFA
Chief Investment Officer