The Battle Over Connected Cars Gears Up

Apple and Google face off in new territory, looking to claim ground once held by Microsoft

Apple and Google have made names for themselves as technology innovators and as the companies shaping the direction of their industry. Both companies recently released high-profile connected car products – CarPlay and Open Auto Alliance, respectively – that allow users to bring the comforts of their mobile devices to their vehicles. It would seem that both companies are focused on new opportunities to extend their market dominance.

The catch? Microsoft announced its first connected car partnership, with Ford, all the way back in 2007.

A shifting industry

So why are Apple and Google only acting now, seven years later? Simply put, the market has changed. While today’s connected car setups still offer many of the same features as they did back then – like entertainment, GPS and voice controls – it’s no longer enough to manually connect devices through the CD player or radio. Plus, with mobile device software growing more advanced all the time, it has become glaringly obvious that the software in car dashboards isn’t keeping up. Instead, there’s a demand for users to be able to easily plug smartphones directly into their cars and get the same music, Internet, streaming, contacts and other features they know and love, straight from their devices. Nowadays, a truly connected car needs to offer a nearly identical experience to the ones users are already familiar with on their phones or tablets. That’s what CarPlay and the Open Auto Alliance offer, and what Microsoft’s now-vintage Sync model lacked.

According to recent figures released by ABI Research, Vehicle-to-Infrastructure (V2I) and Vehicle-to-Retail (V2R) will be the dominant emerging segments with respectively 459 and 406 million vehicles featuring smart car IoT applications by 2030, followed by V2H (Vehicle-to-Home) and V2P (Vehicle-to-Person) with 163 and 239 million vehicles respectively. Vehicle-to-Grid (V2G) services will be offered on 50 million vehicles in 2030.

Additionally, ABI forecasts that in 2019 over 24 million new cars from OEMs including Ford, BMW, Audi, Mercedes, Jaguar-Land Rover, Toyota, Nissan, and Volvo will be fitted with CarPlay.

The rise of the Internet of Things

The smart cars market is also changing as the promise of the Internet of Things (IoT) looms in the future. We are close to a point where household products and appliances will be connected to the Internet thanks to IoT, and cars present a huge opportunity in that regard. After all, given the amount of time many people spend on the road, it’s an extremely attractive place to have reliable Internet service. And while using devices on-the-go is now typically a perk reserved for entertainment, in the IoT era it could be about much more than that. Apple and Google understand the potential in a new market and are ready to make it a reality.

In emerging visions of the IoT, it is easy to anticipate that in-car devices could be used for everything from making cars safer and more fuel efficient to letting vehicles interact on the road. Those capabilities are flashy and sexy, but they would also have practical real-world applications. If one vehicle could connect with other cars and with traffic management systems, it could bring about any number of benefits – less congested roadways, fewer accidents, and even less driver responsibility. For example, connected cars could conceivably override their drivers if the operator were to do something unsafe or mechanically inefficient. Or, if a car sensed that it was too close to another, it could move over to prevent an accident. Developments like these would make the roads far less dangerous (both to humans and the environment), and virtually eliminate most of the stresses that come with driving. While this level of automation does present some concerns that we’ll have a hard time mentally getting over (What if there’s a glitch? What if speed, and not fuel efficiency, is an emergency priority?), it also presents a level of security that human error would never allow us to reach on our own.

The connected car war

Needless to say, the connected cars market isn’t quite to that point yet, but as evidenced by CarPlay and the Open Auto Alliance, Apple and Google have seen the potential and are working toward it. They’re gearing up with new features that make devices easier and safer to use on the road, and they’re competing for the market as they do it. Car companies including Ferrari, Mercedes-Benz, Audi, Hyundai, Honda, GM and more have already begun supporting these interfaces, but in the long term, they can’t afford to alienate potential customers by producing vehicles that either support only Android or only iOS. Making a generic interface is technically very possible, but there’s been no indication that it’s in the works. The true winner of the connected cars war, then, won’t be the company that hooks more automotive partners, but the company that gains a monopoly on the market by winning the battle for exclusivity and, in doing so, universality.

Apple and Google are not, however, the only players in this market. Industry veteran Microsoft is still around, offering its Windows Embedded Automotive (WEA) system in cars ranging from Fiats to Fords. Though Microsoft has not held onto its position atop the smart car food chain, it does have potential for growth. WEA faces some challenges – namely that Windows OS makes up less than 3 percent of the smartphone market – but it works with the MirrorLink connectivity standard, which can be used with Android phones as well. It’s also safe to assume that Microsoft is not standing idly by as its competitors develop new features and functions.

It’s anybody’s guess as to whether Microsoft can recover its smart car dominance, but what’s clear is the huge possibility this market holds. A Groupe Speciale Mobile Association (GSMA) report released last year found that more than half of cars sold in 2015 will include a connectivity system, and every single car produced in 2025 will be connected in multiple ways – that’s pretty powerful stuff. Between predictions like those and the impending maturity of IoT, it’s no surprise that tech giants like Apple, Google and Microsoft are interested in this space. As for the name that will be on your car’s operating system in 2025? We’ll just have to wait and see.

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