GM has announced that it will be integrating Google services and Android Automotive into its portfolio of infotainment products and services, starting in 2021. Prior to this, the Renault-Nissan-Mitsubishi alliance and Volvo were the only two major OEM entities to have announced some level of partnership with Google to deploy its embedded infotainment experience, known most commonly as Android Automotive. The services bundled with Android Automotive include market-leading products such as Maps and Assistant. Perhaps most important, however, is access to the Android development community, with Android Automotive supporting native apps through the Play Store.
The announcement - or more specifically its caveats - portends a different tact on the part of Google in its automotive ambitions and the way it partners with automakers. Weaved into the press release, GM and Google clearly laid out some of the key parameters of the engagement:
Each of these represent at least some compromise on the part of Google to be able to acquire new Android Automotive volume.
The lack of exclusivity of the Android Automotive solution in GM's portfolio means that GM will be able to better differentiate its various product offerings and trim levels while mitigating the supplier risk that an exclusively Google lineup would bring.
Certainly, Google is happy to have the volume that GM offers, particularly in North America, but the value of the relationship is significantly reduced when GM can leverage its other solution providers to develop not just complimentary, but also potentially competitive, infotainment solutions. While few companies have the suite of products to truly compete with Google, as the combined automotive and tech industries have more time to develop competing platforms, the likelihood of a viable, scaled platform alternative to Android Automotive emerging increases.
The downside for GM is that it now has created a fragmentation issue for itself. It now has to manage a redundant supply chain instead of the simplicity of only managing a single set of suppliers for a single infotainment platform. This type of fragmented supply chain is nothing new to the industry, but given the various pressures facing automakers - from autonomous disruption to regulatory and economic pressures - certainly, this is one area where automakers could theoretically reduce the cost of its supply chain by aligning to a single integrated infotainment product.
Furthermore, managing the various over-the-air update campaigns for these different platforms will create an operational burden that will scale exponentially in complexity as additional platforms are onboarded.
GM has certainly weighed these risks, and has clearly come to the conclusion that a fragmented product offering that includes Google is better than the alternatives of "only Google" or "no Google at all".
For automakers, perhaps the hottest topic in the current zeitgeist is how to monetize consumer and vehicle data. Privacy concerns aside, automakers and their suppliers have evaluated a myriad of approaches to data monetization, including internal programs, data marketplaces, and third party APIs/neutral servers.
The most important data sharing risk factors to automakers evaluating whether or not partner with Google on Android Automotive is two-fold:
One of the primary reasons automakers have invested so much in their own data monetization ambitions is because it's incredibly difficult to truly monetize the data in a way that is meaningful to the business, but once it's figured out, the reward is large. If Google is willing to share its "secret sauce" with automakers, this could represent a sea change in the way automakers evaluate Google as a potential supplier.
GM claims that the data that Google will be given access to is anonymized. While neither Google nor GM have shared the terms of the agreement (and likely never will, unless forced to), the long-term strategy from Google seems clear enough: establish itself as a mainstay in the infotainment market similar to how CarPlay and Android Auto have become infotainment must-haves, then exercise its competitive position to grow its advertising business - and its leverage on automakers.
For the consumer, a significant litmus test could be how GM and Google create a system that is compliant with California's new Consumer Privacy Act, which echoes many of the protections established within the European Union's General Data Protection Regulation (GDPR).
Many of the services offered on Google's platform will be inaccessible, or at least stripped of many features, unless the customer associates their Google ID with the vehicle and subsequently accepts the terms and conditions of usage. These terms and conditions will be the primary clue as to how Google plans to use consumer data and the overall terms of the data sharing agreement. In fact, the customer may have to accept two different sets of terms and conditions - one with GM when the vehicle is purchased or registered, and a separate one with Google once the customer associates their Google account to the vehicle.
For the consumer, the benefit of accepting these terms is tangible: they get a seamlessly integrated experience across Google's products and services, from Maps to Assistant to the Play Store. The value proposition of looking up a destination on Google Maps on a mobile phone or web browser, and having that destination automatically populate on the vehicle is clear - and something that automakers have failed to achieve due to the dominance of the Google Maps platform and the inability to truly integrate into the embedded infotainment experience. Furthermore, having a direct Assistant integration increases the value proposition of the Assistant ecosystem to consumers, bolstering the day-to-day usefulness of the platform and providing a competitive differentiator over competing solutions, primarily Amazon's Alexa.
Given the tumultuous relationship between governing bodies, tech companies, and data privacy advocates, the level of consumer control over how data is used and shared may change over time in different markets. In fact, if it weren't for the data, Google probably wouldn't even bother with Android Automotive in the first place as the end goal is to quite simply monetize the consumer's journey.
The terms of this agreement will be a surprise to many in the industry, and for some will even change the calculus as to whether or not Android Automotive should be considered as part of their next-generation platform.
On one hand, automakers who choose to employ similar terms as GM and deploy Android Automotive only serve to bolster Google's leverage over automakers as it establishes a dominant market position. On the other hand, automakers who don't deploy Android Automotive will struggle to build solutions that are as convenient and user-friendly as Google-enabled infotainment systems.
In addition, Google is unequivocally disrupting the traditional automotive infotainment supply chain. Tier 1 suppliers such as Harman, Bosch, and Continental face abject commoditization on Google-enabled infotainment platforms, and the technology and mapping suppliers in the ecosystem such as TomTom, HERE, and Xevo have almost zero scope on such platforms.
Because no other single company can offer the range of services that Google offers, these suppliers will be forced to stitch together competing solutions with assets from their partners as well as with Google's competitors such as Amazon and Microsoft. One example is Telenav's VIVID infotainment solution, which integrates Amazon Alexa into an app-based platform integrated with a connected navigation solution. These solutions check a number of the same boxes that Android Automotive does while addressing many of the data concerns that Google's solution presents, but come short in providing access to a true developer ecosystem (i.e. Play Store) and consumer scale (i.e. Assistant and Maps).
At SBD Automotive, we have been tracking and forecasting how this ecosystem will develop over the coming years. Our experts regularly benchmark and strategically evaluate various infotainment offerings, helping the industry curate infotainment strategies that meet their own objectives while mitigating supplier and other risks.
Connect with Alex on LinkedIn