September 18, 2018 / 12:02 PM / 2 months ago

Breakingviews - Google’s car deal is hazard light for auto groups

View of the dashboard of the Nissan Xmotion concept car being displayed at the North American International Auto Show in Detroit, Michigan, U.S., January 15, 2018. REUTERS/Brendan McDermid

LONDON (Reuters Breakingviews) - Auto groups are dancing with the tech-giant devil. That should make drivers happier. But Google’s push into software for cars looks eerily similar to its highly successful grab for smartphones.

Renault, Nissan and Mitsubishi said on Tuesday their cars will use Google’s Android operating system from 2021. The Franco-Japanese alliance, which sold 10.6 million vehicles last year, currently uses a mish-mash of technology including open-source Linux software. Neither side disclosed the terms of the deal. But the assumption is that the search giant will take a similar approach as it does with smartphones, where it gives away software in return for user data and pre-installing its apps.

The switch should make drivers’ lives easier. Modern cars have “infotainment” systems on a screen below the dashboard to help with navigation, playing music and other jobs. That software - usually powered by BlackBerry-owned QNX, Linux or Microsoft – tends to be clunkier than the interface consumers confront on their handsets.

Crucially, the carmakers’ systems often lack app stores like Google Play. Incorporating Android into cars gives a huge community of developers an added incentive to come up with new applications for, say, finding parking spaces or paying for tickets. Rivals like Peugeot and Toyota may have little choice but to follow suit.

Carmakers lose little in the short term. Google is mostly an advertising business, so should be primarily interested in data that allows it to market products based on users’ location, for example. Auto groups could keep control of information about car performance to offer drivers new services like pre-emptive repairs.

Yet as drivers get used to having access to the search giant’s apps in their cars, it will be harder for manufacturers to go elsewhere. That’s the predicament smartphone makers face now that Android is installed on 88 percent of handsets, using Statista figures. The tech giant could eventually demand that carmakers give it under-the-hood data that would help its self-driving unit Waymo.

Such an extension of Google’s reach would draw the attention of antitrust authorities: its parent company Alphabet was recently fined 4.3 billion euros by the European Commission for abusing its dominance of the smartphone market.

Carmakers will be wary of giving Google more market power. But they may not have much choice.

Breakingviews

Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.


Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below