INSUBCONTINENT EXCLUSIVE:
Joe Apprendi
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Joe Apprendi is a general partner at Revel Partners.
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Big data humble beginnings
A future dominated by autonomous vehicles (AVs) is, for many experts, a foregone conclusion
Declarations that the automobile will become the next living room are almost as common — but, they are imprecise
In our inevitable driverless future, the more apt comparison is to the mobile device
As with smartphones, operating systems will go a long way toward determining what autonomous vehiclesareand what theycould be
For mobile app companies trying to seize on the coming AV opportunity, their future depends on how the OS landscape shapes up.
By most
measures, the mobile app economy is still growing, yet the time people spend using their apps is actually starting to dip
Arecent studyreported that overall app session activity grew only 6 percent in 2017, down from the 11 percent growth it reported in 2016
This trend suggests users are reaching a saturation point in terms of how much time they can devote to apps
The AV industry could reverse that
But justhow mobile apps will penetrate this market andwhowill hold the keys in this new era of mobility is still very much in doubt.
When it
comes to a driverless future, multiplefactors are now converging
Over the last few years, while app usage showed signs of stagnation, the push for driverless vehicles has only intensified.More citiesare
live-testing driverlesssoftwarethan ever, and investments in autonomous vehicle technology and software by tech giants like Google and Uber
(measuredin thebillions) are starting to mature
And, after some reluctance, automakers have nowembracedthis idea of a driverless future
Expectations from all sides point to a &passenger economy& of mobility-as-a-service, which,by some estimates,may be worth as much as $7
trillion by 2050.
For mobile app companies this suggests several interesting questions: Will smart cars, like smartphones before them, be
forced to go &exclusive& with a single OS of record (Google, Apple, Microsoft, Amazon/AGL), or will they be able to offer multiple
OS/platforms of record based on app maturity or functionality Or, will automakers simply step in to create their own closed loop operating
systems, fragmenting the market completely
Automakers and tech companies clearly recognize the importance of &connected
mobility.&
Complicating the picture even further is the potential significance of an OS ability tosupport multiple Digital
Assistants of Record (independent of the OS), as we see with Google Assistant now working on iOS
Obviously, voice NLP/U will be even more critical for smart car applications as compared to smart speakers and phones.Even in those
established arenas the battle for OS dominance is only just beginning
Opening a new front in driverless vehicles could have a fascinating impact
Either way, the implications for mobile app companies are significant.
Looking at the driverless landscape today there are several
indications as to which direction the OSes in AVs will ultimately go
For example, after some initial inroads developing their own fleet of autonomous vehicles, Googlehas now focusedalmost all its efforts on
autonomous driving software while strikingnumerous partnership deals with traditional automakers
Some automakers, however, are moving forward developing their own OSes
Volkswagen, for instance, announced thatvw.OS will be introduced in VW brand electric cars from 2020 onward, with an eye toward autonomous
(VW also plans to launch a fleet of autonomous cars in 2019 to rival Uber.)Tesla,a leader in AV, is building its own
unifiedhardware-software stack
Companies like Udacity, however, are building an &open-source& self-driving car tech.Mobileyeand Baidu have apartnershipin place to provide
software for automobile manufacturers.
Clearly, most smartphone apps would benefit from native integration, but there are several categories
beyond music, voice and navigation that require significant hardware investment to natively integrate
Will automakers be interested in the Tesla model If not, how will smart cars and apps (independent of OS/voice assistant) partner up Given
the hardware requirements necessary to enable native app functionality and optimal user experience, how will this force smart car
manufacturers to work more seamlessly with platforms like AGL to ensure competitive advantage and differentiation And, will this commoditize
the OS dominance we see in smartphones today
It clearly still early days and — at least in the near term — multiple OS solutions will
likely be employed until preferred solutions rise to the top
Regardless, automakers and tech companies clearly recognize the importance of &connected mobility.& Connectivity and vehicular mobility will
very likely replace traditional auto values like speed, comfort and power
The combination of Wi-Fi hotspot and autonomous vehicles (let alone consumer/business choice of on-demand vehicles) will propel instant
conversion/personalization of smart car environments to passenger preferences
And, while questions remain aroundthe howand thewhoin this new era in mobile, it not hard to see thewhy.
Americans already spend an average
of 293 hours per year inside a car, and the average commute time has jumped around 20 percent since 1980
In a recent survey (conducted by Ipsos/GenPop) researchers found that in a driverless future people would spend roughly a third of the time
communicating with friends and family or for business and online shopping
By 2030, it estimated the autonomous cars&will free up a mind-blowing 1.9 trillion minutes for passengers.& Another analysis suggested that
even with just 10 percent adoption, driverless cars could account for $250 billion in driver productivity alone.
Productivity in this sense
extends well beyond personal entertainment and commerce and into the realm of business productivity
Use of integrated display (screen and heads-up) and voice will enable business multi-tasking from video conferencing, search, messaging,
scheduling, travel booking, e-commerce and navigation
First-mover advantage goes to the mobile app companies that first bundle into a single compelling package information density, content
An app company that can claim 10 to 15 percent of this market will be a significant player.
For now, investors are throwing lots of money at
possible winners in the autonomous automotive race, who, in turn, are beginning to define the shape of the mobile app landscape in a
In fact, what we&re seeing now looks a lot like the early days of smartphones with companies like Tesla, for example, applying an Apple
-esque strategy for smart car versus smartphone
Will these OS/app marketplaces be dominated by a Tesla — or Google (for that matter) — and command a 30 percent revenue share from apps,
or will auto manufacturers with proprietary platforms capitalize on this opportunity Questions like these — while at the same time
wondering just who the winners and losers in AV will be — mean investment and entrepreneurship in the mobile app sector is an extremely
lucrative but risky gamble.
