Android Auto: applying the smartphone model to cars
The Google Business model in the car is to extend its data collection of the individuals in order to sell targeted profiles to advertisers. In the vehicle, it can sell POI selected on the basis of the information it will have accumulated on the driver.
In order to foster this approach Google has built the Open Automotive Alliance (OAA) with 25 car manufacturer brands (Toyota, BMW and Mercedes being noticeably absent). With already 80% of the smartphone operating systems today, the path to similar domination in the car industry is well traced. Android Auto even announced it will connect to Apple smartphones.
For the car manufacturers there are many advantages:
Google already has an enormous customer base with opt-ins on advertising and GPS. Adding cars, homes and health to the existing opt-ins on the smartphone will be a logical step for Google. For the car brands, it would be much more difficult technically and carry the huge PR risk related to privacy.
After 14 years developing in-car telematics, there is still no common standards for connected content management in the vehicle.
Some initiatives such as Genivi, MirrorLink or OpenXC have tried to foster a standard, but few car makers got involved in these projects: they only set up a technological surveillance to facilitate their internal development. The historical lack of serious involvement in those initiatives seem to suggest how badly they underestimated the importance of a simple, user friendly and standardised interface between the vehicle and the customer’s content.
So, in the end, the car industry seems to have picked Android with at its disposal the OS, the developers, the economics and the user base.
The risk being of course to become disinter-mediated from their user base, and for Google to claim the lion’s share of the relationship.
Google will however, not be part of the car’s manufacturing and distribution chain, seen as too complex and risky. The drivers are already using google before they buy a car, while doing their research and after they bought it, to connect their smartphone and to navigate using Gmap or Waze.
Google Self Driving car is a proof of concept, but not for a car. The interest for Google is to develop the intelligence that allows the vehicle to drive safely on its own; understanding the environment, braking, changing direction…
Google may become the operating system of the self driving car, like it did with the smartphone. At the same time it is creating a reputation for itself in the safety and mobility sector that it it did not have. And it is doing that much faster than the core Auto players.
The next logical step will be to cross car data coming from the Android Auto source and user data from the smartphone, something the OEMs have only little experience in.
In terms of pure car data, it seems the french OEMs have chosen not to use the data from their own vehicle. The German OEM have understood the value of that data and keep pulling it from the vehicle even after the driver stops the telematics subscription.
- This data can be used to better understand their drivers and propose new vehicles or offers at the right time. Only 43% of drivers will choose the same brand of car when they buy a new one.
- It can be used to check how the car is used and what functions in the car are used – or not.
- Car manufacturers can isolate data about driving patterns and accidents that are not related to the driver behaviour.
- And finally to check the behaviour of specific components to adapt the OEM requirements to their providers.
While it is unlikely that every OEM would want to share that kind of data with third party service providers such as Google, recent announcements have highlighted the quandary in which the manufacturers are finding themselves.
What can be said about VAG’s CEO who calls to a “sacred union” of carmakers to protect consumer’s privacy against “nanny state and Big Brother’ (see Cebit 2014) but involves Audi and VW in Google’s OAA? Strategic prudence requires OEMs to keep all the options open; Audi also stating in a recent press release: “We are separating the vehicle-related functions from the infotainment features, thereby securing the data against unauthorised access. The customer has to give express consent for the use of data generated in the vehicle”. This suggests Google could have access to the driver‘s data (starting with GPS) but not the car’s
In terms of usage model, when talking about connectivity to the vehicle, the first step is to zoom out of the vehicle and look at mobility as a whole including other connected devices and travel means as well as the city’s “smart” infrastructure.
Google is already very well placed to create a continuous experience across all these areas with acquisitions or investments in companies such as waze, Uber and Nest but there is space for more nimble players to innovate.
Car manufacturers competition has changed and it is now impossible to differentiate the cars on style quality and cost. Services (financing, after-sales, infotainment) have become a strategic pillar to base differentiation.
Now Google and the Cloud are questioning the OEM’s core business transforming the driver’s relation with the vehicle from ownership to mobility “as-a-service”.
The OAA agreement suggests that car makers have validated Android as the only platform to create this new holistic mobility experience. In doing so, they have accepted to give away the value of a part of their ecosystem such as the margin on hardware and to concentrate on their core product.
The car brands need to learn how the move from ownership to usage of the car will work. They have made some initial step in that direction. For example, PSA has invested in WeDrive, a car sharing company focussing on home to work trips. The investment is in a model where the service is critical (going to work) and therefore needs to go through rigorous testing to insure it is easy to use, reliable and functional.
Mercedes has also made great steps in the mobility sector investing in CarPooling.com and Uber competitor, RideScout. It also owns the car sharing service Car2Go (11,500 cars shared in 7 countries and 850,000 members) and the mobility platform moovel to tie all the services together as well as with bus and taxis.
Clearly the manufacturers will not loose control over the use of our cars without a fight.
This blog was made from a conversation with Frederic Lassara