Your Next Car Will Be Connected

If you haven't bought a car recently, buckle up. Your next visit to the showroom won't just introduce you to better handling and improved fuel economy. Your next car is going to be connected.

By that, we mean that it will be able to pull in data from the outside world to make the entire driving experience safer, more interactive, and (hopefully) more enjoyable -- even when you're stuck in traffic.

Getting to the connected car doesn't require any technical backflips. We're talking about using the same kind of 3G or 4G wireless connections you already get through your smartphone. Just don't mistake practicality for uniformity. At last week's Consumer Electronics Show, car makers demonstrated wildly divergent ideas for how to harness wireless technology while on the road.

Strap in your smartphone or get a data plan -- you choose
Take Ford Motor (NYSE: F  ) . The company may be in the process of reinventing itself, but it doesn't want to reinvent the wheel. Instead, Ford has committed to its SYNC platform, built in concert with Microsoft (NASDAQ: MSFT  ) and activated via a smartphone, to deliver a whole range of in-car services, such as accessing your contacts, calendar, or firing off the occasional text via voice command.

Audi, in contrast, is putting wireless modems directly into all its new models (at least as an option). Currently, drivers get data over 3G. But that also shouldn't matter -- we aren't talking about streaming movies. Instead, we're talking about interactive maps provided by Google (NASDAQ: GOOGL  ) and its Google Earth app, plus syncing audio playlists and other personal preferences in the My Audi app on your computer.

Your on-call doctor is parked in the driveway
The interesting question is what can your vehicle do once it's connected to the outside world. A crowded highway full of connected cars can coordinate to avoid traffic jams and reduce accidents. Think of the freedom you'd feel cruising without constantly pumping the brake pedal.

You'll also be able to get real-time traffic, news, and weather, stream your favorite playlists from Internet radio, or send a text to the loved one you're traveling to see -- all safely done via voice command. Audi has partnered with Nuance Communications (NASDAQ: NUAN  ) for voice commands that don't just control internal features but that also reach into Nuance's cloud to accommodate a wide range of queries. Chrysler and Hyundai have also announced plans to use Nuance's Dragon Drive voice assistant.

Ford's take is slightly different. The car maker is working on making driving safer and healthier using SYNC apps. According to Ford's Gary Strumolo, a diabetic wearing a blood glucose monitor might soon check her status with a push of a button on the steering wheel. Or how about giving an asthmatic real-time data about air quality, or handing control to SYNC in order to navigate a route around smog? Ford sees this sort of future.

Napping behind the wheel
And yet the safest way to drive may be to not drive at all. Audi demonstrated a self-piloting prototype that can navigate on its own in a highway traffic jam -- a potential first step toward truly autonomous vehicles. While the company doesn't plan to launch this feature until the end of the decade, cars today are already assisting drivers in an increasing number of ways. One common example: adaptive cruise control that brakes when you get too close to the car in front of you.

Karl takes a spin in an Audi concept demo. (Source: Tim Beyers, The Motley Fool.) 

Similarly, Ford's Lane Keeping System (LKS) nudges your car back in line if it starts to drift. We'll see more features like LKS in the future, says Strumolo. Call it part of a broader effort to use sensors and motion detection to improve the entire driving experience.

It's a data-driven world
More than anything else, this year's CES was about the increasing reach for data about the world around us. A plethora of exhibitor pitches suggests we want this capability not only in our smartphones and tablets, but also in our appliances and vehicles.

Admittedly, connected cars are an easier sell than smart washing machines. Consider that just two functions -- GPS and mapping -- can be combined to create powerful navigational tools, and you'll see how other sensors can easily become more than the sum of their parts. Automakers are keenly aware of this, as are a number of companies finding clever ways to measure what's happening in the physical world and integrate the data into new applications.

For example, NXP Semiconductors (NASDAQ: NXPI  ) , already the world leader in chips for AM/FM tuning, demonstrated a clever way to measure stress inside battery cells in order to predict and ultimately prevent failure. The company also found a way to improve the performance of your speakers.

Both are examples of "sensorless sensing"-- ways to measure and improve what is going on in a system using software to interpret minute changes in things like voltage and impedance rather than placing new sensors.

Meanwhile, InvenSense (NYSE: INVN  ) is focused on locating any object in a three-dimensional space with exquisite accuracy, something that's key for the self-piloting vehicles of the future as well as for helping locate you when GPS fails, such as in a tunnel or parking garage.

Cars are getting smarter. It's inevitable. As investors, it might make sense to go with some of the more visionary automakers -- and we certainly have in recommending Tesla Motors (NASDAQ: TSLA  ) at Motley Fool Rule Breakers -- but you may find equally great returns investing in the picks and shovels of this industry. Or in this case, sensors and software.


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