Cars: The Ultimate Mobile Devices

Cars are becoming the ultimate mobile devices as automakers and mobile platform providers move toward an integrated future. As a result, the tech giants catalyzing this movement can expect to see substantial revenue increases as the new market develops.

Earlier this month, Apple (NASDAQ: AAPL  ) and "iOS In the Car" partner Honda introduced an iPhone-based dashboard system that will be built into the 2014 Civic and the 2015 Fit. Subsequently, Google (NASDAQ: GOOGL  ) formed a partnership with Volkswagen's (NASDAQOTH: VLKAY  ) luxury Audi brand that, according to the Wall Street Journal, will be announced at next week's Consumer Electronics Show in Las Vegas. Let's take a look at what these systems have to offer and how they might impact the future of these companies.
 
The "iOS in the Car" system
The iPhone serves as the brain of Apple's "iOS in the Car" system. In other words, many of the platform's features are accessible only when an iPhone is connected via a wire, or wirelessly through Bluetooth or Wi-Fi. Once the device is connected, a touchscreen in a center console gives drivers access to Siri, maps, music, and more. Users can utilize this touchscreen or can employ "Eyes Free," which allows them to access the same features with nothing more than voice commands.  
 
Apple CEO Tim Cook described the "iOS in the Car" system as "very, very important" and "a key focus" for the company. So far, the endeavor has proven successful, considering Apple has already forged several strategic partnerships with the following major auto manufacturers: Ferrari, Mercedes-Benz, Jaguar, Honda/Acura, Nissan/Infiniti, Chevrolet, Kia, Hyundai, and Volvo. As the company continues to establish more of these partnerships, it can expect to see increases in licensing revenue and marginal increases in iPhone sales. 
 
The Android system
Unlike Apple, Google's system will not require a device. Instead, the company wants to run the Android software off of hardware built into the car. Reports guess that the in-car Android platform will be a cross between an information system and an entertainment center, giving drivers and passengers access to Google Maps, music, Play, and more.  
 
Although Google will announce Audi as its first official automotive partner, the company will likely seek out more auto partnerships in the months to come. As it does so, Google can expect similar increases in licensing revenue.  
 
The outlook may be less rosy for Audi. In general, Audi is perceived to be a high-class brand, targeting an affluent, high-end customer base. Conversely, Google's Android-based devices target a somewhat less affluent, lower-end demographic.

Putting Android software in Audi vehicles creates a bit of a perceptual disconnect that may ultimately deter consumers and drive down sales volumes.  
 
Final foolish thoughts
Only time will tell which of these in-car systems proves dominant. For now, this new integrated frontier is vast, leaving room for both Apple and Google to see substantial increases in revenue. Although auto makers will have to carefully evaluate which tech giant to side with, the tech giants themselves are poised to grow bigger.

If we had to buy just one stock in 2014, this would be it
There's a huge difference between a good stock, and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.


Read/Post Comments (1) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 04, 2014, at 11:21 PM, Cintos wrote:

    I predict that an automobile with an iPhone interface will still offer a viable user experience 5 years on due to Apple's track record with an evolutionary upgrade path. With an imbedded/static hardware Android system, history suggests it will rarely, if ever, be enhanced as time and technology moves on. Heck, Samsung is planning on abandoning Android fro their Tizen OS, and Google is focusing new development on the Chrome platform so as to escape the Oracle/Java anchor in Android.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2782098, ~/Articles/ArticleHandler.aspx, 10/24/2014 11:04:40 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement