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Why automakers will never let Apple and Google own the in-car experience: A report on TU-Automotive Detroit 2016

James MacTavish Blog

This week TU-Automotive, an organization focused on evolving automotive technology, had its massive Detroit awards show and exhibition. Bringing some of the biggest names in the auto industry from Ford, Oracle, GM, and more, the event was a whirlwind of excitement and innovation. Attending the show as a finalist for Newcomer of the Year and exhibiting a joint demonstration with our partner Wind River, the message from automakers and Tier 1’s was clear; there is no option other than owning the in-car experience.

In a recent Car and Driver article on the event titled, “Ford Hopes to Fend Off Apple, Google with In-Car Infotainment”, Ford’s executive director of connected vehicles and services, Don Butler identified how automakers see the in-car screen experience. “I know there are criticisms. But we’re getting that high quality. That core experience is essential, and we’re not going to cede that to Google and Apple.” While Ford’s statement is bold and more direct than some automakers would be there is something telling about the ongoing battle for automakers to own the connected car experience. Here are the top 5 reasons automakers will never give up their in-car space completely to Android Auto and Apple Car Play.

1. There is an untapped revenue channel waiting for automakers

While vehicle technology continues to advance (even outpacing fighter jets when it comes to the amount of software onboard) further research and development in additional offerings to drivers has yet to take off. Typically, drivers do not enjoy much in the way of additional premium services or applications to equip their vehicles, outside of yearly and extremely costly map updates at the dealership. The in-car experience holds with it an essential revenue channel where automakers can offer not only new applications and services, but also a way for consumers to personalize their driving experience. Defining monetization options where drivers can purchase new content in their vehicles also incentivizes developers to bring their innovative apps with new and exciting features to vehicles, like they have done with smartphones and tablets. Ultimately, customers get the benefits of new and personalized experiences while automakers start seeing new revenue streams. Allowing Google and Apple to become the middlemen of this untapped revenue channel is a mistake no automaker is willing to make.

2. The connected experience is central to the brand and competitive value of the automaker

From luxury automaker, Cadillac to mainstream affordable Kia, Android Auto and CarPlay have found their way into more than a dozen brands of vehicles. While offered as an option in lieu of automakers’ in-house offering, there is a glaring flaw in the acceptance of Google and Apple services in vehicles. Whether automakers are looking to define themselves as value-focused like Hyundai, or sporty and tech-focused like Audi, the in-car experience has rapidly become a generic entity across all car brands, irrespective of price, values, competitive offering or branding. Ford’s Don Butler has been vocal about Google and Apple in the car and other companies including Toyota, who is working closely with Ford; have echoed the same sentiments; these solutions are simply stop gaps to defining their own experience.

3. Infotainment is critical to defining vehicle ownership for existing and new drivers

Car ownership has declined steadily in the past decade. Teens, and millennials who once treated the almighty driver’s license as the gateway into adulthood seem to have changed their views. It is clear traditional car ownership has lost its edge, but the evolving connected car experience holds with it the potential to redefine ownership for old and new customers alike. While prospective buyers can build their dream cars online, even test drive and purchase cars without stepping into a physical dealership, this digital experience has only begun to impact the vehicle. Interestingly, Android Auto and Apple CarPlay are not driving these initiatives. Ford recently kicked off a pilot project where groups of three to six people lease and share a single car, managing schedules to “borrow” the car via the in-car interface and an app for smartphones and tablets. Furthermore, GM was not only looking to penetrate the Uber market when it purchased the ridesharing service, Lyft, but also wanted to enable Lyft drivers to lease or purchase their cars through the program. Innovative features and services link vehicles to customers’ digital lifestyles and make ownership far more flexible, adaptive and valuable. The more control automakers have over infotainment systems in their vehicles, the more power they have to define new ownership opportunities.

4.The connected car is becoming the centerpiece to the larger IoT ecosystem

Today’s car manufacturers can no longer afford to refer to vehicles as simply vehicles. A new era for connected IoT devices has begun, one in which vehicles are quickly becoming the central hub for a drivers’ connected world. BMW recently debuted its BMW Connected and Open Mobility Cloud Concept at CES, which aims to seamlessly integrate the connected car with a consumer’s home, cars and mobile devices. Drivers would be able to automate and customize various functions of their smart homes and connected devices with their cars’ Connected interface while Open mobility would intelligently track and learn the drivers behaviors in an attempt to proactively create automations on its own. For instance, if a driver made a coffee from his smart coffeemaker 25 minutes before heading to work everyday, he could program his his vehicle to warm up ahead of time. Even better, his vehicle could intelligently learn what temperatures the driver usually turns up the heat, the days he typically goes to work, and then automate the entire process on its own. While this is just one small contextual action that could happen, this would quickly evolve with the proliferation of new IoT devices and the eventual emergence of the smart city. BMW Connected is not out yet but it’s clear that the company is investing in its infotainment systems to become far more integral component in the IoT ecosystem than CarPlay and Android Auto are today.

5. Like Don Butler says “The core experience is essential”

Outside of the servicing and maintenance of a vehicle, automakers and dealers have very little in the way of a customer relationship, and exponentially less in-car. Reclaiming the infotainment screen from Android Auto and CarPlay, opens up everything above from new revenue streams, to new ownership models, and deeper integrations with the Internet of Things. All of these things accumulate in enhancing the customer relationship which above all else is the most important aspect of any business.

TU-Automotive was an outstanding event that showcased that automakers, and Tier 1 vendors alike are not giving up in the battle for their connected relationship with drivers. The show was a clear indication that they are set to not only do battle with Apple and Google in the coming years, but to innovate, integrate, and monetize to win it back.

James MacTavish is the Marketing Coordinator for AppCarousel. AppCarousel, is the leader in end-to-end app management and revenue generation platforms for connected car and the Internet of Things.

Image courtesy of Carsguide.com