AppConext Auto recently released an infographic, “Wheels in Motion”, which states that “according to a survey by Accenture, in-vehicle technology was overwhelmingly named as the most important factor in car purchasing decisions for US-based buyers”. No wonder then that cars are increasingly becoming “smartphones on wheels”, but the question still remains as to which operating system the connected vehicle should feature. I consider this conundrum with the aid of Euromonitor International’s data on smartphones by operating system.
Ford surprised the world as recently as February 2012 by launching its new small MPV, the B-Max, at the Mobile World Congress in Barcelona instead of at the Geneva Motor Show, which opened just a week later. Less than two years on and CES2014, the Consumer Electronics Show held in Las Vegas in January, played host to carmakers such as Audi, BMW, Ford, Kia and Mercedes, unveiling new products and/or technology. The announcement at the show that especially piqued my interest was the creation of the Open Auto Alliance, which a Cnet.com article on 6 January referred to as “a partnership with carmakers General Motors, Audi, Honda and Hyundai, as well as with chipmaker Nvidia, to bring the Android operating system to vehicles in 2014”.
This intrigues me because the same OEMs are also working with Apple (as too are many more such as BMW, Mercedes and Nissan) to develop iOS in the Car. I therefore wonder if carmakers are ultimately looking to offer both Android and iOS options in their vehicles or are still hedging their bets at this stage. This may well be the case as there are pros and cons with both systems. Loo Wee Teck, Head of Consumer Electronics at Euromonitor International, told me that in the case of iOS, car manufacturers would have to pay royalties to support iPhones but would have a simpler implementation as they have to deal with fewer models of phone. Android, on the other hand, is the market leader and offers volume and cheaper costs but the sheer diversity of Android smartphones and OS version fragmentation posts a significant challenge to the car manufacturers – they cannot realistically test and support all Android devices.
Carmakers ultimately have three choices as I see it – opt for Android or iOS as their sole operating system globally, adapt to local markets by offering the leading operating system in that country, or offer both systems, thus giving consumers the choice. Strange as it may seem, I can actually envisage consumers choosing a new car based on its operating system and, moreover, compatibility with their beloved smartphones and/or tablets. I say strange because a car obviously costs significantly more than portable consumer electronics.
Nevertheless, carmakers will surely not risk alienating potential consumers by only offering one operating system or the other. In the case of South Korea, for example, Euromonitor International statistics reveal that 93% of smartphones run on Android but only 4% on iOS. This is understandable as South Korea is home ground for LG and Samsung and so only offering iOS in the car would be a risky strategy for any foreign carmaker looking to capitalise on the ongoing surge in car imports into the country.
Smartphones by Operating System in Selected Countries
Source: Euromonitor International
The second option of adapting to local markets is therefore preferable but, even then, carmakers would naturally still alienate certain consumers. In the US, for example, Android is the leading OS with 54% of the smartphone market but Apple’s 32% can hardly be overlooked. In my opinion, the upshot is that carmakers need to invest to offer consumers a choice of in-car operating system. One final point, however, is the notable absence of a “Car Windows” OS. Windows smartphones account for over 30% of the market in Argentina and Portugal but this is likely to decline as consumers become accustomed to Android or iOS in the car.