Auto industry risks slide to software duopoly -

Auto industry risks slide to software duopoly


The idea that vehicles — self-driving, human-driven, or some combination of the two — will have internet connectivity is a foregone conclusion.

The challenge is that the automotive industry is, roughly, at about the level that the mobile industry was in about 1998, when phones and pagers and personal digital assistants first started making connections to the internet. Brands like Research in Motion (now Blackberry), Palm Pilot, and Nokia were dominant — and, importantly, they also managed their own “stack” of user experience and operating systems.

The mobile industry of the time understood that hardware was their market differentiator and a driver of what the software needed to do. This was a near-perfect inversion of the desktop model, in which the software drove the required hardware specifications.

The automotive industry now stands at the same crossroads as Palm, Nokia, Research in Motion, and others did then: They can lose control of their brands by under-investing in interoperable software ecosystems that augment their hardware, or they can take control now and recognize that vehicles represent an opportunity to expand their brand value.

The Big Mistake of Mobile: Sliding into a Platform Duopoly
In the mobile industry, there was a remarkably quick decline in platform diversity for the leading brands. Yes, the Apple iPhone's release in 2007 changed the mobile business, but even before that, the mobile industry was forgetting key things — “open standards” — that made the desktop internet grow so fast. Mobile industry players promoted proprietary platforms and ended up sacrificing interoperability. For example, a lack of interoperability of messaging delayed the widespread adoption of SMS messaging in the U.S., with only 25% of Americans using SMS in 2003.

Many other basic communications standards and practices were walled off, with carriers and hardware makers doing everything in their power to close off the “deck” — the screens and applications that the user interacted with. If this sounds familiar, it should, as you look to the In-Vehicle Infotainment systems and philosophies that are common today.

The risk that the automotive industry is running, just like what the mobile industry has done, is that it’s heading for a software duopoly.

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