Technology

Apple, Google Turning Cars Into Full Service Mobile Devices

Apple and Google may one day be able to build cars that can buy coffee, pay for it and assist the driver in picking it up. McKinsey & Co. anticipates that the transformation of the auto into a full service mobile device will earn enormous revenue, says a report from Bloomberg. The consulting firm anticipates that the data stream and connectivity components alone could create a 180 billion euro market.

Apple, Google Turning Cars Into Full Service Mobile Devices

Auto industry to move hardware to service

Tony Douglas, BMW’s head of mobility, said the companies need to tap the service industry instead of just producing transport hardware. Douglas also said that the transportation industry is ripe for transformation, adding that either the companies will need to adapt that disruption with a new business model or someone else will take the benefit.

Until now, luxury automakers such as BMW, Volkswagen, Audi and Daimler’s Mercedes-Benz competed against each other, focusing on new models for drivers and passengers. However, with Apple looking to innovate on the whole car concept in future, the automakers have jointly planned to acquire Nokia’s HERE digital map business.

In-depth location data is one of the most significant prerequisites for bringing in new services like coffee-buying and automated vehicles. With HERE, the German auto juggernauts will have an a leg up on Google. Also automakers will not have to give consumer data for free to Google, says the report.

Massive potential for Apple, Google

Christine Hohmann-Dennhardt, the Daimler executive in charge of legal issues, said the company is looking to produce good, safe and beautiful cars, for which data is key. Hitachi believes that by 2020 around 90% of new vehicles in Western Europe will be connected, compared to approximately one-third next year. Vehicles that are connected to the internet and smartphones churn out data equivalent to 10,000 emails every hour, says the report.

According to McKinsey, automated vehicles could save around 50 minutes a day for users around the world. As per the research firm, this could earn revenue of around 5 billion euros in digital media per year for every minute the driver spends on the internet instead the road. For automakers this could mean a big opportunity, provided they are not already cornered by Apple and Google.

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