Platform Opportunity On Wheels

Michael Hedges January 13, 2014 Follow on Twitter

Automobile industry designers are in a quandary. Car buyers recovering from the pinch of recessions have once again changed their expectations. Infotainment more than wheels seems to be the marketing edge. The next step doesn’t require much imagination.

The connected car was the hot topic at the annual Consumer Electronics Show (CES) ending last week in Las Vegas. Automakers joined tech giants Google, Apple and Microsoft in showing off new and geeky things for the car. Let there be little doubt, the next big platform for media technology has, usually, four wheels and, normally, takes people from place A to place B.

This should come with no surprise. The telephone, tied to a wire most of its history, has evolved into a transformative media delivery platform. Mobile technology added one dimension; communicating on-the-go changed behavior. Chip and battery power – not to forget design brilliance – pushed smartphones into more than a billion hands, expected to be two billion in 2015. Smartphone popularity this decade came from utility; applications are everything, just as they were for the PC. Mobile device users are the most sought after targets for media outlets selling information and entertainment (infotainment) and advertisers selling everything.

“Wouldn't it be great if you could bring your favorite apps and music with you, and use them safely with your car's built-in controls and in-dash display?” asked Android engineering director Patrick Brady rather rhetorically in a blog post, quoted by CNBC (January 8). Android is Google’s smartphone operating system. At the CES Google announced its Open Automotive Alliance partnership deal with General Motors, Honda, Hyundai and Audi. Apple has a similar partnership with Ford, Mercedes and Jaguar

Automakers and dealers are consummately aware of the infotainment attraction. Once they couldn’t sell a car without a radio, now it’s GPS. Driver-side information systems and backseat entertainment are simple technically but cumbersome on the sales-floor. The next generation will require all those goodies to work together; mapping software interacting with real-time traffic reports and voice controls as Apple offers carmakers with Siri.

One solution considered by automakers is leaving most infotainment functions to smartphones through a simple docking station. Designers, particularly at the top end, hate that idea. The automobile, they say, must be all-inclusive. In the last decade automakers have cut the product introduction cycle by half but even at three years to roll a new design off the assembly line that’s an eternity in the high-tech world that releases a new smartphone three times a year. But consumers invest ten times (or more) in an automobile. And that certainly makes it an attractive new platform with increased price pressure on both mobile devices and the data plans to power all the applications.

The future was once reasonably predictable for automakers – and everybody else. Having a choice is one thing, choosing another. Partnerships with Google, Apple and specialty developers “mitigates a lot of risk,” said IDC analyst Tim Tang, quoted by AFP (January 11), “but they give a lot away, looking at future services like apps (and) pay-as you go insurance. No one is certain where it is going but carmakers don’t want to be left out. The car is becoming a mobile accessory.”

Smart cars are becoming much smarter. Several manufacturers equip cars and trucks with front and back-end sensors. Heads-up displays are available. Top-end Mercedes-Benz can read road and highway signs. Audi displayed a self-driving car at the CES. Yep, just as media techies still drool over the gadgets in “Star Trek” motorheads love “Top Gun”.

Automakers face a couple of constraints unfamiliar to their prospective partners. Driver distraction is a no-no and safety recalls are expensive. The car guys are taking tiny steps.

Google, Apple and other lords of Silicon Valley, VCs included, do not believe patience is a virtue. They’ve shown this many times. Already rumblings of an iCar or GoogleWheels have tantalized. Just imagine a fully-integrated self-driving vehicle that needs only a destination but will, if necessary, route to a fuel-stop or fast food station allowing occupants a bit of quality time with video or Facebook. The ad people will pay a fortune.

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