Auto Industry Surrenders Dashboard to Google



Auto Industry Surrenders Dashboard to Google
In announcing last week the names of 25 car makers who joined its Open Automotive Alliance (OAA), Google marked a milestone in the auto industry. This is clearly a huge, strategic mistake for these automotive companies who are hindering long term value for short term benefits.

Today many commentators are understanding Android Auto as a direct answer to Apple’s CarPlay. Surely it is, but this is anecdotical compared to the big picture. Here is why.

As a starter it is important to have in mind that Google’s share on the smartphone market worldwide is more than five times bigger than Apple: 80,2 % against 14.8% percent, according to IDC (2014 forecast), and this is not expected to change drastically in the next five years according to their forecast.

Therefore Android Auto's impact on the industry has a different order of magnitude than CarPlay.

Second, Google has automotive ambitions that are much wider than Apple (as we already explained in a previous article here). If anything else, its self-driving car technology is the best testimony of these high ambitions.

Auto Industry Surrenders Dashboard to Google
Third the value of a car is slowly shifting from hardware to software. What is true for the car conception is also true for the driver’s perception. Several studies have shown that young drivers - particularly in BRIC countries - are more interested in connectivity features than in the engine. Software should therefore be considered as a strategic asset.

It is indeed important to look back a bit at history and see the consequences of software domination on particular hardware markets. Remember Microsoft with Windows in the PC market in the 90s? Look at the current Android domination on smartphones? In all cases the hardware makers get commoditized. Hence the reason why Samsung is desperatly trying to get out of Android...

This should have rang a bell at headquarters of auto makers, no?

What does Android Auto specifically means for the car industry?
Android Auto is basically taking over the branded dashboard experience of the car maker to replace it with its own user interface and services: Google Maps for turn-by-turn GPS navigation, Play Music, Google Now for contextual search, and more.

Continued...

Monday, June 30th 2014


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