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Auto Giants Fear Tech Giants
Economy, Sci & Tech

Auto Giants Fear Tech Giants

Carmakers are limiting the data they share with technology partners Apple Inc and Google Inc through new systems that link smartphones to vehicle infotainment systems, defending access to information about what drivers do in their cars.    
According to Reuters, auto companies hope that the vehicle data will one day generate billions of dollars in e-commerce, though they are just beginning to form strategies for monetizing the information. Apple and Google already make money from smartphone owners by providing a variety of products and services, from digital music to targeted advertising, and connecting phones to car systems will almost certainly extend their reach.
But as infotainment systems such as Apple's CarPlay and Google's Android Auto become more widespread, auto companies hope to keep tech providers from gaining access to a wealth of potentially profitable information collected by computer systems in cars.
Some auto companies have specifically said they will not provide Apple and Google with data from the vehicle's functional systems—steering, brakes and throttle, for instance— as well as information about range, a measure of how far the car can travel before it runs out of gas.
"We need to control access to that data," said Don Butler, Ford Motor Co's executive director of connected vehicle and services. "We need to protect our ability to create value" from new digital services built on vehicle data.

 High Stakes
The stakes are potentially huge: General Motors told investors earlier this year that it expects to realize an additional $350 million in revenue over three years from the high-speed data connections it is building into its cars.
Consultant AlixPartners estimates global revenues from digitally connected cars will grow in value to $40 billion a year worldwide by 2018, from $16 billion in 2013, and auto companies would like to hold on to as much of that money as possible.
"The risk is, if you give up control and somebody else figures out that business model, then you lose the future revenue stream," said Friedmar Rumpel, vice president in AlixPartners' automotive practice.
Auto companies hope to profit from in-vehicle data in a variety of ways, including the provision of travel planning services and auto repair and service information they hope will bring drivers to dealerships. They also expect to work with insurance companies, providing information that would allow insurers to base their rates on a driver's behavior behind the wheel.
While many automakers have signed up to use CarPlay and Android Auto, systems designed to make it easier and safer for drivers to use the apps and features on their smartphones while driving, some car companies also have designed their own systems.
Ford is installing a proprietary system, Sync 3, in its cars that is designed to work with and supplement CarPlay and Android Auto.
Volkswagen AG's Audi subsidiary is hoping to develop and license its own brand-specific apps, while attracting third-party programmers to create and customize car-specific apps, according to Mathias Halliger, Audi's senior systems architect for connected vehicle technologies.
"This enables a business model that completely belongs to the carmaker," Halliger said.
Still to be answered, however, are questions concerning how comfortable consumers will be with sharing their personal information from the vehicle. In addition, state and federal regulators could impose limits on data-gathering and sharing.
In the meantime, policies on data access and sharing differ from company to company.
Several automakers said they are sharing minimal vehicle information that directly affects the performance of third-party infotainment systems—for example, GPS coordinates to enable navigation; information about whether the dashboard screen is in day or night mode; and notification of when vehicles are in reverse gear, so rear-view video displays can be activated.
GM is integrating Apple's and Google's infotainment systems into its vehicles without "any outgoing data or shared revenue," a spokesperson said.

 

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