Software developers are quietly building a new kind of app store.
It’s not coming to your smartphone; Google and Apple won the battle for your purse or your pocket years ago. Don’t look for it on your laptop or on your tablet, either. The next tech frontier is sitting right in your driveway, and the stakes are high.
In-car shopping and in-car entertainment platforms are poised to be significant sources of revenue for automakers and software companies, because they’ll give motorists the unprecedented ability to customize, update, or fully redesign several aspects of their vehicle a week, or a decade, after buying it.
This on-going shift is happening under the radar. It’s sometimes allocated a line or two at the bottom of a press release, or floated among a multitude of other forward-thinking ideas at the annual Consumer Electronics Show (CES). Behind the scenes, carmakers are creating marketplaces — much like Google Play and Apple’s App Store — that will spawn virtual, 24-hour shopping centers in the coming years. Even Amazon should take note.
Now or later?
Audi calls its store the MyAudi Marketplace. Users can access it via a smartphone app, but they can’t view it on their car’s touchscreen. And, in the name of simplicity, the software reads the VIN to only show products and services compatible with a specific car. For example, navigation is available in 2020 and 2021 versions of the A4 and the A5 that weren’t built with the feature. Audi told me it will add more products to its store in the not-too-distant future.
“Different customers have different needs at different times,” Richard Whittemore, Audi of America’s connected vehicle portfolio manager, explained. Someone buying an A5 may not need navigation right away, but that person might want the feature before embarking on a cross-country drive a year (or more) after taking delivery. Or, a buyer may choose to add navigation to a used car whose original owner didn’t need directions.
Viewed in this light, in-car purchasing could turn a car into a giant iPhone on wheels. My 2021 RS 5 may look exactly like yours, down to the paint color (make mine dark green), the 450-horsepower engine, and the wheels, but its infotainment system won’t be loaded with the same apps, the icons will be arranged differently, and I’ll have a different background image. One showing my cat doing something really cute.
This trend gives automakers a new path towards revenue. As tech giants illustrated in the 2010s, selling software is an extremely lucrative business. Car companies need as much money as possible to survive in an industry pivoting towards electrification and autonomy. Many are open to forging alliances with other players in the tech and entertainment space.
“We cannot continue looking at the car as a closed ecosystem, and pretending we can do everything ourselves. We can’t. It’s an open platform. This is important to realize,” Hildegard Wortmann, Audi’s sales and marketing boss, told me on the sidelines of CES 2020. She hinted the best is yet to come from the brand with the four rings and, judging from what I’ve seen, she’s spot on. Even virtual reality-based in-car gaming is a possibility.
Pay to park, dine, or bike
The scope of in-car shopping and entertainment increases exponentially when carmakers invite third-party companies into the picture. Tesla — which, unsurprisingly, did not respond to a request for comment — lets owners of compatible cars stream Netflix while they’re parked, for example.
The California-based company also shed light on the other, often unreported side of this trend when it bundled this function, and several others, into a package named Premium Connectivity that costs $10 a month. So far, it sounds like most owners are more than happy to pay a monthly fee to unlock extra features. They see it as yet another extension of the streaming economy.
“Flexibility is always a good thing for consumers, and that’s essentially what this is. You can decide how much you want to spend, and you can decide it at any time. People are also more open to the idea of subscriptions and electronic payments to enhance services, so car companies are simply looking around and seeing the way the wind is blowing. The thing to watch out for is how much these services and features actually cost; monthly fees add up quickly,” affirmed Karl Brauer, the executive publisher of Autotrader and Kelley Blue Book.
Looking beyond the car and its occupants, the touchscreen is in the ideal position to become a bridge to the outside world — again, just like a smartphone. Car companies from all over the automotive spectrum are experimenting with technology that allows the driver or the passengers to find and pay for a parking spot in advance, or to reserve a table for two at a busy restaurant, via apps loaded into the infotainment system. German engineering firm Bosch even envisions a function that, when enabled, automatically reserves an e-bike if the navigation system calculates the driver won’t be able to park near the destination. It’s an untapped market that offers dozens of possibilities.
It helps that, unlike 5G, in-car shopping and in-car entertainment services don’t require big infrastructure investments. These platforms already exist. Restaurants are already taking online reservations, and cars already have touchscreens. It’s just a matter of stitching the two together, and that’s the easy part.
Rivaling Amazon
Mercedes-Benz, like most of its peers and rivals, sees tremendous potential in software, and it has big plans for it. It already allows buyers to order digital options after taking delivery of a new car in some markets, and it outlined plans to create an Amazon-like e-commerce platform in 2019. Georges Massing, the firm’s vice president of digital vehicle and mobility, outlined the technology’s potential in an earlier interview with Digital Trends.
“We want to enable the user to order almost everything that he or she is used to ordering directly in the vehicle. At that point, the sky is the limit. The imagination of the people who want to sell something on our platform is what will limit us. We really are building an e-commerce platform. It’s a good revenue opportunity for us, and for whoever is selling things through our ecosystem,” he told me. He pointed out electrification creates new opportunities for in-car shopping, because motorists will be able to reserve a spot at a charging station and pay for it ahead of time.
This feature isn’t limited to electric cars; it’s already possible to pay for a tank of gasoline or diesel using a car’s touchscreen, though not every manufacturer offers this feature. Jaguar experimented with it in the United Kingdom.
In-car shopping will quickly gain momentum, and I predict it will become an extremely competitive space in the 2020s. It will turn into a selling point automakers will highlight in a bid to elevate their vehicles above the competition’s. It’s not far-fetched to speculate you’ll one day be able to buy your next car via the screen in the one you already own.
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