Why carmakers need to avoid mobile’s ‘big mistake’

Article By : Martin Focazio

The risk that the automotive industry is running, just like what the mobile industry has done, is that it’s heading for a software duopoly.

The idea that vehicles—self-driving, human-driven or some combination of the two—will have internet connectivity is a foregone conclusion.

The challenge is that the automotive industry is, roughly, at about the level that the mobile industry was in about 1998, when phones and pagers and personal digital assistants first started making connections to the internet. Brands like Research in Motion (now Blackberry), Palm Pilot and Nokia were dominant—and, importantly, they also managed their own “stack” of user experience and operating systems.

The mobile industry of the time understood that hardware was their market differentiator and a driver of what the software needed to do. This was a near-perfect inversion of the desktop model, in which the software drove the required hardware specifications.

The automotive industry now stands at the same crossroads as Palm, Nokia, Research in Motion, and others did then: They can lose control of their brands by under-investing in interoperable software ecosystems that augment their hardware, or they can take control now and recognise that vehicles represent an opportunity to expand their brand value.

The big mistake of mobile: sliding into a platform duopoly

In the mobile industry, there was a remarkably quick decline in platform diversity for the leading brands. Yes, the Apple iPhone's release in 2007 changed the mobile business, but even before that, the mobile industry was forgetting key things—"open standards"—that made the desktop internet grow so fast. Mobile industry players promoted proprietary platforms and ended up sacrificing interoperability. For example, a lack of interoperability of messaging delayed the widespread adoption of SMS messaging in the U.S., with only 25% of Americans using SMS in 2003.

Many other basic communications standards and practices were walled off, with carriers and hardware makers doing everything in their power to close off the “deck”—the screens and applications that the user interacted with. If this sounds familiar, it should, as you look to the in-vehicle infotainment systems and philosophies that are common today.

The risk that the automotive industry is running, just like what the mobile industry has done, is that it’s heading for a software duopoly.

The parallels are clear. Rather than working to make their own software ecosystems better and more interoperable, many mobile technology makers took the simple route and decided to just put Android on their devices. This sucked as much as $31 billion out of the hardware-makers revenue, according to numbers revealed in an Oracle-Google lawsuit. Meanwhile, Apple’s closed-off ecosystem deflated the value of software, as “Apps” lopped a zero of the price of “Applications” back in 2008—take it or leave it.

Today, although even the mighty Microsoft is still (barely) in the phone platform game, your only two realistic choices are to lose control of the hardware completely (iOS) or give up control of the core platform (Android).

Avoiding the duopoly with automotive

Automakers are at a crossroads today. They can decide that they want to follow the lead of the mobile industry and allow two platforms—Apple or Android—which will lead to losing control of their software product roadmaps. Or they can turn to open-source platforms and tools like Automotive Grade Linux and projects like Xen to handle the basics of connectivity and presentation control in the vehicles and concentrate on a better overall customer experience: a brand differentiation at the intersection of hardware and software. Sharing a single platform will enable quicker innovation.

Building a full customer experience and application platform for hardware—one that allows for an innovation ecosystem to form and thrive—is hard, but it’s necessary. The lessons learned in mobile must not be lost on the automotive industry—they can take control of their brand experience now or abdicate to others.

It all starts on the in-car silicon-to-cloud connection. The choice to be made here is simple: Car makers can treat connectivity as a core capability of their vehicle and engineer accordingly, or they can attempt to bolt on some version of connectivity through a mobile device.

Similarly, car makers can embrace the idea of their car as a platform for software innovation—by using open-source initiatives as a starting point—or they can let innovation happen elsewhere and hope for the best.

There are hundreds of billions of dollars at stake in the next five to 10 years. Vehicle makers can transform their business to develop fully integrated hardware and software platforms built on open systems and engineered with an ecosystem of software integrations in mind. Don’t miss your ride.

Martin Focazio is senior director, business consulting at EPAM Systems, a global product development and digital platform engineering services company based in Newton, Pennsylvania.

First published by EE Times U.S.

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