In the tech world, there is good disruption and there is bad disruption. Game-changing occurrences such as the mass-adaptation of smartphones have turned much of the tech world on its head, and largely for the good. Consumer preferences driving the demand for better in-car connectivity and integration experiences are the direct result of smartphone and tablet usage, and the automakers have struggled to stay ahead of the curve.
We previously reported on GM moving away from in-house infotainment app development and embracing device-integration solutions designed by Google and Apple. The move was predicated on GM’s need to proactively manage scores of apps and guarantee seamless compatibility with millions of in-car systems on the road for the next decade, something isn’t really the company’s wheelhouse.
But are GM and other automakers forsaking the revenue potential of connected services and features down the road? As mentioned in the source article, it depends on where each company is positioned in the value chain.
Automakers continue to strive for brand differentiation and are now confronted with having to work with tech development companies that possess arguably more brand value and loyalty than they do. And it is becoming more obvious that one or more of those tech companies is going to create the software platforms for infotainment, V2V and autonomous driving that will be standardized in many future vehicles.
Once this happens, automakers could find themselves mostly excluded from the software and connected services part of the value chain where the most monetary potential will likely be generated. Holger Weiss, CEO of Aupeo, a Berlin-based streaming music provider, summed it up: “In the end, the [automakers] will build beautiful pieces of metal on four wheels, but not participate in the value generation that everyone else is earning.”
This is speculation for now, but we see where the trajectory is headed.
Source: Consumer Electronics Giants Enter The Connected Car – Telematics Update