Google and Amazon Ready to Push Solutions from Consumer Market to Automotive

Subscribe To Download This Insight

2Q 2019 | IN-5399

Over the course of 2018, both Amazon and Google made a series of announcements and partnerships that outlined their serious plans for the automotive market. Google announced partnerships with Audi, Nissan, Mitsubishi, and Volvo to co-develop infotainment systems based on Google Products. Meanwhile, Amazon announced key partnerships with Audi and HERE to integrate Alexa voice-services into their infotainment platforms and solutions.

Registered users can unlock up to five pieces of premium content each month.

Log in or register to unlock this Insight.

 

Amazon and Google Announce a Plethora of New Automotive Partnerships

NEWS


Over the course of 2018, both Amazon and Google made a series of announcements and partnerships that outlined their serious plans for the automotive market. Google announced partnerships with Audi, Nissan, Mitsubishi, and Volvo to co-develop infotainment systems based on Google Products. Meanwhile, Amazon announced key partnerships with Audi and HERE to integrate Alexa voice-services into their infotainment platforms and solutions.  

These partnerships come as a result of increasing consumer demands and OEMs’ realization that an increasing number of consumers may see value in being able to control their smart home devices and tap into their Apple, Google, or Amazon ecosystems in-vehicle. The market entry of Google and Amazon will likely have a long-lasting impact on the existing infotainment market, but both companies have different approaches to the market, and there may even be some opportunities available to traditional market incumbents that can adapt.

Raising the Bar for Innovation

IMPACT


Ultimately, the entries of Amazon and Google will raise the bar for the level of innovation expected across the automotive infotainment market.

Google’s entry into the embedded infotainment market will bring with it the entry of Google Maps, Google Auto OS, and the Google Playstore. Google Maps is characterized by its free service, slick user interface (UI), live traffic services as standard, accurate dynamic route guidance, and other connected services. These features are currently not associated with most embedded navigation systems, which remain costly and come with limited connected services. Meanwhile, Google Auto OS and Google PlayStore will present the unique ability to provide a developer platform and an in-vehicle app store, which currently do not exist in-vehicle.

Amazon’s entry to this market, meanwhile, will see Amazon Alexa enter the vehicle as an embedded application. Embedded voice control in-vehicle has historically been extremely clumsy and non-intelligent. Outside of automotive, though, voice control has developed at an alarming pace, and consumers now expect that same experience in their vehicles. With the market entry of Amazon Alexa and Google Assistant, the bar for voice control in-vehicle will be significantly raised over the upcoming years.

Amazon and Google, Two Different Stories for Market Incumbents

RECOMMENDATIONS


While both Amazon and Google have had success in the automotive market, acquiring numerous partnerships with OEMs and other market incumbents, they differ greatly in their approaches to the market.

Google is choosing to partner and work directly at the OEM level, with an aggressive strategy that revolves around being able to provide the “Google Experience” in-vehicle, offering an array of Google products—Google Assistant, Google Maps, Google Auto OS, and Google Play store—to OEMs. Google’s market entry clearly poses a direct threat to companies in competing spaces, especially embedded navigation, due to its direct partnerships with OEMs.

Given the popularity of Google Maps outside of automotive, Google will likely set the benchmark for what is expected by consumers in-vehicle. Existing global mapping providers, such as TomTom and HERE, will at the very least have to match what Google can offer, leading to a significant shift from traditional “offline-first” navigation and toward “connected-first” navigation. Livestreamed maps, regular OTA, traffic services as standard, and other connected services will have to become a central part of new embedded navigation approaches. Meanwhile, smaller players in the navigation market will have to choose to either partner with the top navigation providers to help bolster their respective offerings or focus on alternative areas in which Google does not operate.

Amazon’s market entry, meanwhile, will have a mixed impact on the existing automotive infotainment ecosystem. Clearly, companies that currently develop voice control technology, such as Nuance, will now face increased competition. Nuance will have to ensure that it can match what Amazon can offer in terms of voice technology or run the risk of being displaced from the ecosystem altogether. Amazon’s current strategy in automotive has been very similar to its strategy in smart home—deploying a widely open application programming interface and software development kit (API/SDK) for applications developers to use, enabling Amazon to target players further down the supply chain. Considering the expected reluctance of OEMs to partner with Google on all solutions, existing market incumbents could use Amazon’s current state of openness in regard to Amazon Alexa to effectively integrate voice control into their applications/services as a point of differentiation. Some companies, such as Telenav, Elektrobit, HERE, and Luxoft, have already developed solutions that integrate Amazon Alexa into their solutions.

 

Overall, the entry of Amazon and, more importantly, Google, into the embedded navigation market will significantly shift market dynamics by increasing competition and raising the bar for innovation, likely leading to market consolidation. Many parallels can be drawn to the initial adoption of Google Auto and CarPlay, which started with a few mass market brands but eventually propagated throughout the entire automotive market. In this scenario, there was no alternative for OEMs as the current approach was simply not good enough for many consumers. Current market incumbents that compete in similar spaces to Google will therefore have to, at the very least, ensure that they can match what Google is offering. Amazon, meanwhile, may provide competition for some companies, like Nuance, that operate in a place of direct competition with its services. However, Amazon may also provide a vital partner in developing solutions that incorporate voice control and therefore combat the threat posed by Google.

Services

Companies Mentioned