Is your car the next iPhone?
If automakers come through on their promises to electrify their lineups and create “software-defined” vehicles, one of the models they’re designing now could make our current vehicles look like landlines—or maybe Nokia cellphones.
Today we spend much of our downtime scrolling our phones, generating data that tech giants like Google and Apple can monetize—including the time we spend sitting in the car.
Now that newer cars are equipped to get software updates remotely, automakers want to make money off the data sitting in our biggest devices, too.
Stellantis is aiming to make €20 billion in incremental annual revenue from software services and subscriptions by 2030, while General Motors is anticipating annual software and services revenue of between US$20 billion to US$25 billion by the end of the decade.
McKinsey & Company estimates that by 2030, about 95 per cent of new vehicles globally will be “connected,” up from around 50 per cent at the time.
Tesla has applied for Canadian telecom licences for vehicle infotainment and “mobile terminating SMS to wake up vehicles.” Meanwhile, Ford unveiled more details about its strategy this week after restructuring to focus more on software. The company said its ambition is “doing things your phone can’t do,” like augmented reality.
Like today’s vehicles, pre-iPhone mobile phones had no universal chargers. And you were stuck with whatever software came on the device, while myriad manufacturers’ primary selling points were their mechanical features like flip screens, or keyboards. The App Store and Google Play changed the way we use phones, creating giants like Snapchat, Instagram and Uber.
Up until now, McKinsey noted, progress has been halting for the auto sector to make a similar transition.
Few users renewed their software offers with automakers, and the user experience was so bad that some couldn’t even sign in, the consulting firm wrote. Automakers have struggled to attract and retain tech talent, keeping software engineers in silos, each reinventing the same software that was being built next door.
To change that, the industry is looking to Silicon Valley—and beyond. Renault was the latest to do so this week, signing a software deal with Google, amid plans to spin out its EV division and forming joint ventures with China’s Geely, as well as Nissan. Here are a few other examples of automakers that have recently overhauled their plans to make “software-defined” connected vehicles that are more app-friendly:
• Hyundai announced a new software roadmap last month using NVIDIA technology.
• BMW said last month it will partner with Amazon Web Services on connected-vehicle technology.
• Honda is working with Sony on an EV with subscription features and has also worked with AWS on the connected-vehicle platform in its 2020 models, although it is launching vehicles this year, as well, using Google’s Android Auto for in-vehicle services.
• General Motors is rolling out a new software platform next year that works with Android Automotive, and Red Hat’s Linux technology.
• Stellantis said last year it would be launching three software platforms and has strategic partnerships with BMW, Foxconn and Waymo. It’s also working with Qualcomm and Amazon.
• Volkswagen’s urgency to transition to its new software platform, CARIAD, was reportedly a factor in its CEO turnover this year. It has tapped BlackBerry and Qualcomm in its efforts.
• Toyota is working on its own operating system called Arene. It has, in the past, worked with AWS for driver-facing software.
• Tesla is in the process of adding new features to its in-house advanced driver-assistance subscription and plans to offer video-game libraries through Steam and video calls through Zoom.
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