Google's (NASDAQ:GOOG) (NASDAQ:GOOGL) Android operating system could soon power your's car radio. According to Reuters, the company is hard at work on a version of Android designed specifically for automotive infotainment systems.
On its face, the report makes sense, although it does seem to clash with Google's other up-and-coming automotive solution, Android Auto. Still, if car manufacturers can be persuaded, the widespread adoption of Android-powered car radios would benefit Google, while, at the same time, threatening the dominance of Apple's (NASDAQ:AAPL) iOS ecosystem.
CarPlay and Android Auto
As an area of expansion, the car radio seems like an obvious target for Google and Apple's mobile ecosystems. Many of the apps that form the backbone of the smartphone experience -- maps and music, notably -- are most useful while driving, and though modern infotainment systems often feature some sort of bluetooth interface, many are lacking.
Apple's solution for the car, CarPlay, is already available on select automobiles and a few after-market radios. More CarPlay-equipped cars are scheduled to debut next year, and in time, the majority of cars could come with CarPlay.
Like AirPlay on the Apple TV, CarPlay acts as an interface, giving iPhone owners the ability to beam a stripped down version of their iPhone's interface to their car's center console. In the process, a handful of apps -- including iMessage, iTunes, Spotify and Apple Maps -- become accessible directly from the dashboard. Google's alternative, Android Auto, works in an almost identical fashion, but unsurprisingly, requires a paired Android phone.
Both solutions offer improvements over current setups, but both suffer from the same limitation -- they are completely useless without a paired phone. This might not pose many problems on a regular basis, but is far from ideal. (Perhaps you misplaced or forgot your handset, for example, or someone else has borrowed your car.)
An advantage for an open ecosystem
Google's rumored Android-powered infotainment center wouldn't face that limitation. Paired with its own LTE connection (an increasingly popular option on modern vehicles), it could serve as yet another mobile device -- in a new category, entirely separate from smartphones and tablets.
Apple could follow with something similar, but the idea seems to contrast with its long-standing commitment to integrated hardware and software. Apple could build the radio units and sell them to car manufacturers, but the automotive industry is a complex web of models and supplier relationships. Offering an aftermarket solution would be possible (it could even use Apple stores to install them), but the increasing complexity of automotive electrical systems has lead to a steady, and significant, decline in demand for aftermarket stereos.
In this instance, Google's model -- giving away an operating system suppliers and manufacturers are free to use -- seems better suited to the car market.
Apps and issues
If Android eventually comes to power the majority of car infotainment systems, it would likely benefit Google in a number of ways. Many of Google's apps and services -- Google Maps, Waze, Google Music -- could see increased usage. It may also drive increased Android handset adoption, with ecosystem synergies enticing car owners to switch to Android.
But as in other markets, Google could face significant issues. General Motors, for example, plans to offer cars with an Android-powered infotainment system by 2016 -- but it will be a heavily modified version of Android. GM's Android fork could -- like Amazon's Fire OS -- strip out Google's services in favor of its own. Given GM's immense market share, and the limited number of car manufacturers, it may be difficult for Google's version of Android to capture the car market.
Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Apple, General Motors, Google (A shares), and Google (C shares). The Motley Fool owns shares of Amazon.com, Apple, Google (A shares), and Google (C shares). 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.