By Tim Higgins and Chester Dawson
Alphabet Inc.'s Google is making a major push into the auto
industry, partnering with the Renault-Nissan-Mitsubishi Alliance to
use the tech company's Android operating system to power media
display that will eventually be sold in millions of cars
world-wide.
The auto-making alliance, which together sells more vehicles
than any other auto maker, is picking Google to provide the
operating system for its next-generation infotainment system,
marking a major victory for the Silicon Valley tech giant, which
has spent more than a decade trying to replicate the success it has
had with the smartphone in the car.
The alliance, which last year sold a combined 10.6 million
vehicles globally, will debut the new system in 2021, giving
drivers better integration of Google's maps, app store and
voice-activated assistant from the vehicle's dashboard, the
companies said.
The move comes as other auto makers have been reluctant to cede
control of this space to tech rivals, in part because they see the
technology as generating valuable consumer data that can be turned
into new revenue streams.
Many drivers remain wedded to their phones, opting to use them
in their cars to call up directions and perform other tasks. The
auto industry has struggled to develop interfaces that are as
reliable and easy to use. Many car systems are too complicated and
prone to glitches, industry analysts and reviews say.
The alliance's executives said many of its customers are already
predisposed to using Google's apps over the ones developed by the
car companies and their suppliers. And these executives have grown
comfortable with Google, which began open-sourcing its software in
2007.
"The trust was built in the last few years," said Kal Mos, the
alliance's vice president of connected vehicles, in an
interview.
This deal will likely put pressure on the alliance's competitors
to further open their car's multimedia systems to Google or Apple
Inc., another software giant trying to play a larger role in the
auto industry. The ultimate vision for Google is to create a broad
ecosystem for its users, so they will be able to move their digital
lives effortlessly between devices, whether it is a car, home or
smartphone.
The companies declined to disclose the terms of the partnership.
Google will have access to the data generated by its in-car apps,
but must get the customer's permission first before collecting it,
Mr. Mos said.
Such in-car operating systems have become a key difference-maker
for auto makers in recent years as they have closed the gap with
each other in other areas, such as quality and reliability.
Customers, meanwhile, have come to expect a user experience similar
to their smartphones.
J.D. Power's initial-quality study ranked troubles with today's
in-car multimedia systems as the "most problematic" category for
new car owners. Consumer Reports magazine, which is known for
pulling its buy recommendation for substandard in-car electronics,
now tracks the most and least distracting systems.
As more vehicles are connected to the internet via built-in
modems, industry experts expect new businesses to emerge for data
generated by the car's onboard electronics. Many auto makers say
they want to maintain control over licensing this data to third
parties and see it as a valuable touch point with customers after
they leave the showroom.
Since 2005, Alphabet Inc.'s Google has been trying to chart a
path into the car. Volkswagen AG's Audi became the first to put
Google Earth in its in-car navigation systems. Volvo Cars has
announced that its next generation in-car infotainment system would
run on Android, Google's operating system.
But in general, car companies have been reluctant to go too far
with Google, unsure how their business models will evolve, said
Mark Boyadjis, a global technology lead for IHS Markit.
"Apple went to market with iTunes, coined it as a way to protect
the music industry and then subsequently took over the music
industry," Mr. Boyadjis said. Auto makers are asking themselves:
"'How much do I give over to this tech company?'" he added.
Google has been working to alleviate those concerns, putting out
its Android operating software to be used for free.
IHS Markit estimates that auto makers this year are using some
level of Android software in 19% of the infotainment systems
installed in vehicles globally. In doing so, the auto makers are
creating their own user ecosystem.
Google has also offered Android Auto to car makers to allow
users to pair their smartphones into the dashboard display. Apple
has a similar product, marketed as Apple CarPlay.
Outside of cars, Google's operating system has become dominant,
running in more than 80% of the world's smartphones.
Silicon Valley's increasing interest in the auto business has
unnerved auto makers globally, especially as Google's self-driving
car project as evolved into a stand-alone business called Waymo and
aims to begin commercially transporting riders this year.
Write to Tim Higgins at Tim.Higgins@WSJ.com and Chester Dawson
at chester.dawson@wsj.com
(END) Dow Jones Newswires
September 18, 2018 00:15 ET (04:15 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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