It is a fact that the tech giants like Alphabet, Amazon, Apple and Microsoft are among the most successful American businesses in history. They have consistently created world-class products.
Apple, for instance, accounted for 85 percent of global smartphone profits in Q2 2023 and has an active installed base of over 2 billion devices. Google, meanwhile, operates the world’s most popular smartphone operating system (OS) and search engine. Amazon, as we all know, is America’s largest e-commerce platform and cloud provider. Whereas, Microsoft holds an around 70 percent market share in desktop OS.
If that wasn’t enough, in recent years, “Big Tech” has also established a considerable presence in the automotive industry, which is undergoing a rapid digital transformation owing to the rise of connected, autonomous, shared, and electric (CASE) mobility. Tech giants are keen to influence the transition by using their proven platforms, expertise in AI, cloud computing, and software development.
Apple CarPlay, Android Auto and Google Automotive Services have enabled drivers to mirror smartphone apps, such as Apple Music, Google Maps and WhatsApp, on the dashboard of their vehicles. Apple claims CarPlay’s popularity is such that it is available in 98 percent of cars in the United States, and almost 80 percent of consumers will not even consider a vehicle without it. Similarly, Android Auto is supported in approximately 200 million cars.
In an interesting twist, many automotive brands originally were reluctant to integrate these services. They feared that Apple and Google would dominate the in-car customer experience along with all the data opportunities and revenue that comes with them. But they’ve had to alter their stand as car companies cannot provide the kind of interconnectivity that their digitally native customers have grown used to. “We kind of lost that battle 10 years ago,” Ford CEO Jim Farley acknowledged in an interview with the Wall Street Journal. Farley, however, also remarked that “you’re not going to make a ton of money on content inside the vehicle. It’s going to be safety/security, partial autonomy and productivity in our eyes.”
As yet, Big Tech’s automotive forays are not confined to infotainment either. They go much further than that. Case in point: Apple, Alphabet, and Amazon are also working on autonomous systems, described by Tim Cook as the “mother of all AI projects.” Even though the scope of these ventures is limited, Big Tech has been fairly patient with its investments thus far. Others speculate that it’s because self-driving car projects are a vanity project for the cash-rich tech giants. Others argue it is because autonomous vehicles can significantly reduce traffic accidents, which are responsible for 1.19 million deaths and 20 to 50 million non-fatal injuries every year (per the World Health Organization).
Apple could still use autonomous technologies to lay the groundwork for its own electric car (EV) project. Apple, a Cupertino based company, is looking to find new growth opportunities. Automotive is one. Apple’s successful electronics division has also given it a wealth experience in terms of design, chips, and batteries.
Besides, Apple’s Asian counterparts, like Sony and Xiaomi, are also pushing into the EV space. Sony has formed a partnership with Honda, while Xiaomi has joined forces with BAIC Group, one of China’s largest state-owned manufacturers. Apple reportedly has also held talks for collaboration with a number companies, but nothing concrete has yet happened.
Tim Cook’s team, say some observers should avoid the auto industry due to its intense competition and complexity. However, a survey by consulting firm Strategic Vision revealed that 26 percent of customers would “definitely consider” an Apple-branded vehicle. Although this may not appear to be a large number, the survey revealed that only Toyota (38%) or Honda (32%%) scored higher.
“Of course, what Apple ultimately presents in terms of styling, powertrain, product, and other key features will finally determine the level of interest generated among car shoppers. However, their brand awareness and reputation provide a formidable platform that automotive manufacturers should brace themselves for accordingly,” said Alexander Edwards, President, Strategic Vision.
That said, we must also bear in mind that 68 percent of Americans feel that major tech companies have too much influence in the economy, while 44 percent support more stringent regulation for them (according to Pew Research). Hence, Big Tech’s far-reaching automotive ambitions could still face major public opposition, and it is pivotal for thesefirms to demonstrate that their growing clout will indeed result in better products and more satisfied stakeholders.
Ultimately, the automotive ecosystem contributes 5 percent to the USA’s GDP (gross domestic product) and supports 9.6 million jobs (direct, indirect, and induced). It also has a crucial role to play in America’s transition towards net zero emissions by 2050. So the involvement of resource-rich tech firms could be a great blessing for the nation, especially since its legacy carmakers have lost much of their competitive edge in recent decades. However, nobody wants to live in a gloomy Orwellian world, and “Big Tech” will have to keep that in mind as it builds the car of tomorrow.
Click here to learn more about the latest luxury cars.