Google, once a small development company, is now a market leader in several sectors, particularly in countries such as Spain where its market share is almost total. Its success can be attributed to its focus on smartphones, even when they were an exceptionally small minority market. Google bought Android so that it could develop its own platform, one that it could give away to its partners for free and only charge for the use of its applications. This move allowed Google to become the market leader in the number of devices with its operating system installed. The strategy gave manufacturers a software for free which they could use on their hardware. As a result, all the big brands ended up using Android instead of developing their own operating systems. The loyalty of its customers became impossible as most terminals were increasingly indistinguishable from each other.
Nowadays, the big war between companies is not smartphones, but cars. The electrification of vehicles comes hand in hand with greater intelligence in them. Google has designed its own operating system for cars, automotive android, capable of offering a first-class experience in vehicles of different brands. ‘Troy’ car Google’s intention is to repeat the master move that it executed with mobiles by creating software that can go on the hardware built by others, use it for profit without risking its own money on factories and logistics. This move makes sense as Google earns much more from software than Android mobile brands earn from hardware.
Google intends to use its automotive android for a similar strategy in the automotive industry to that employed in smartphones. It wants to create software that goes on hardware built by others and use it to earn profits. Car manufacturers who have seen the beards of their neighbours, the mobile phone manufacturers, cut, are hesitant to popularize a similar strategy. Google is going to fight against giants of the technological world, Apple being one of them.
Apple presented its system CarPlay for cars a few months ago, which was met with a much colder reception than expected. The reason behind this is manufacturers do not want to become just a hardware factory. This makes Apple’s entry into the sector a perceived threat. The contradiction is that vehicle buyers are increasingly attaching importance to the car’s control system applications, integration with mobile, etc. That is why Tesla gains many followers in many countries, even though its cars are not the most striking in many aspects. However, Tesla has an amazing user experience similar to the Apple iPhone, and people value that. He values it so much that he is capable of changing a purchase decision for this reason, and the fact is that interaction with cars already goes far beyond what the steering wheel, gear lever and pedals represent. Google, recognizing this, tries to convince some brands that it is the way forward.
Volkswagen is a good example of a company that tried to compete with Google in creating software. Their software platform resulted in delays, losses, and a bad reputation, leading to the departure of the previous CEO. This serves as a warning to other companies who choose to compete with Google in software, as they will have a hard time achieving similar levels of success.
The subscription economic model adopted by Google, generating income from monthly payments for various services, is one that is gaining ground in many industries, including cars. BMW, Mercedes, and Tesla already charge their users for improvements in their cars linked to software or even hardware. Control of the vehicle’s software lies with the manufacturer, who will no doubt wish to make a profit from these payments. Manufacturers are becoming aware that as the interaction with cars already goes far beyond what the steering wheel, gear lever, and pedals represent these payments will become increasingly important to the end-user.
In conclusion, Google’s current intention is to become the market leader in the automobile software industry by designing software that will go into hardware built by others. Manufacturers recognize the importance of vehicle control systems to the end-user and are beginning to collaborate with Google by integrating Google’s maps and YouTube with their systems. However, some are hesitant to use Android Automotive, fearing brands will become just a hardware factory. Apple’s entry into the sector is seen as a threat because it is considered a hardware factory. The subscription economic model is gaining ground in many industries including cars, and manufacturers who control the vehicle’s software will inevitably profit from monthly payments. Companies such as Volkswagen, who tried to compete with Google in creating software, have failed and, as a result, achieved a bad reputation and financial losses. It is clear that Google is one of the giants of the technological world, and to compete against them, one has to have a highly innovative software strategy.
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