As Apple Launches CarPlay, Should Google Investors Worry?

Google has formed the automotive alliance, so its investors shouldn't be worried about the "infotainment" sector. But will BlackBerry and Apple allow them to show confidence about the new industry?

Mar 15, 2014 at 9:00AM

Apple (NASDAQ:AAPL) is going into the auto "infotainment" sector. It has just released an actual product in the business. It is called CarPlay, which will allow you to do just about anything with your iPhone while driving. As Apple invades this industry, will Google's (NASDAQ:GOOGL) ecosystem become less significant? I believe Google investors shouldn't worry about the development. Google has plans for other devices, too. The tech giant recently announced the formation of the Open Automotive Alliance for the infotainment sector. The company will be introducing an Android software development kit for wearable devices in the near future. Also, Android appears poised to continue its operating system's market share grab.

A new frontier to conquer
The goal of the Open Automotive Alliance is to manufacture cars that can be connected with Android devices. The alliance consists of a group of technology and automotive companies. They include firms like General Motors, Honda Motor, and NVIDIA. They want to customize Google's popular mobile operating system for vehicles. The companies will get an opportunity to place their wares into hundreds of millions of cars. MarketsandMarkets states that the total in-car infotainment market is expected to reach $14.4 billion by 2016. This represents a compound annual growth rate of 12.1% from 2011 to 2016. If Google gets a significant share of the market, it will boost its revenue.

The vision for the wearable market
The Android software development kit will be free for manufacturers. It will afford Google the opportunity to attract developers into an ecosystem powered by its software. As part of the project, Google will be launching its smart watches within the next few months. Google has lots of prospects in this sector. IMS Research predicted the wearable market would grow from 14 million devices shipped in 2011 to as many as 171 million units shipped by 2016.

Another area for a Google upside
Google's Android is still gaining a substantial share of the mobile operating system's market. And given the robustness of Google's gains, it looks like the trend should continue. Android maintained a 10.1% lead over Apple's iOS in January. Also, Google has opportunities to show a revenue growth. IDC predicts Android will continue to be the dominant mobile operating system through 2016, attaining 63.8% market share. This will represent a compound annual growth rate of 16.3% from 2012 to 2016. Even a high-single-digit growth rate will have a meaningful impact on Google's finances. So, Android's continuing popularity as the leading operating system is good news for Google investors.

Apple unveiled its CarPlay last week at the Geneva Motor Show. The feature is a means for an iPhone to power a touchscreen on a new car's dashboard. The interface is iOS-like, but vastly simplified compared with what's seen on a phone or tablet. Worldwide auto sales in 2014 are seen rising 3.4%, according to research firm HIS. The new infotainment system market could be big by 2020. Apple has wasted no time in taking an early lead.


Foolish bottom line
Apple has positioned its CarPlay system as the smartest way to use its iPhone in a car. However, Google investors should not worry that Apple is invading this sector. Google has big plans for the in-car infotainment sector, and is about to introduce its software kits for wearable devices. Finally, Android is poised to continue its operating system's market share grab. 

Here's how Apple's going to add to its huge cash pile
If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now... for just a fraction of the price of AAPL stock. Click here to get the full story in this eye-opening new report.

Mark Girland has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information