Only ten years ago, most cars just had radio devices and very few cars had dashboard displays. Today, the situation has changed dramatically. Every new car has a dashboard display inside. So, the market for dashboard displays has grown rapidly and continues to do so. Dashboards are becoming more sophisticated and more expensive. It is not surprising that the biggest computer and software manufactures are interested in this market. Apple and Google actively promote their solutions in the car infotainment market. Furthermore, they are trying to be part of the car electronic system; they are pushing car producers for deeper integration with the car, so that they become an in-car personal assistant. With the introduction of electric cars, the cost of the mechanical part of the car is going down while the electronic part is only increasing its share of the cost, and may go on to become the greatest expense. That’s what we observe with Tesla cars. This is the trend which bothers car manufacturers the most.

On the other hand, a dashboard display is a computer device with an inbuilt operating system and there are already computer giants who want to predominate in this market. After computers were developed in the 1940s, big companies competed for the market. The competition became tougher when smart mobile devices were introduced. Companies like Apple, Samsung and Google predominate in this market. Trying to expand their markets, they are working hard to expand into car dashboard displays. This market is worth billions of dollars in revenue, when including ads and services.

Big car companies are trying to keep the market in their hands but customers, who are used to using mobile phones, want to have the same system in their cars. Customers don’t want to learn a new user interface; they want to have what they know and use every day.

According to the WSJ (Dec 9, 2015), Hyundai Motors is giving up on developing its own car entertainment system, and instead has been adopting software solutions from Apple and Google. Is it a good business decision? First of all, Hyundai is one of the smallest of the top ten car manufacturers. It needs to compete with the biggest concerns like Volkswagen AG, Toyota Motors, and others. It doesn’t have resources to compete in the area of dashboard displays with computer giants like Google and Apple. According to drivers and industry researchers, new car buyers are looking for vehicles that have Apple’s CarPlay and Alphabet’s Android Auto dashboard displays, that provide drivers with information and entertainment. Many small car makers are giving up control over the key information and entertainment links in their vehicles, hoping to turn dashboard technology into a reason for buying their vehicle. As a short-term solution, adopting software solutions from Apple and Google helps improve their competitive position in comparison with other car manufacturers. This decision also means that Hyundai doesn’t need to spend a lot of money developing its own dashboard display, so currently it is at an advantage against others car manufactures. Nowadays, dashboard displays have complicated operating systems, each supporting various devices. Modern dashboard displays must be updated during their comparatively long lifetime. And the lifetime of dashboard devices is longer than the average lifetime of mobile phones. This fact makes maintenance of dashboard device a nightmare. Also, it is almost impossible to compete with computer giants in their own territory. Taking into account all of the facts mentioned above, we can conclude that Hyundai made the right decision in the given circumstances, but only as a short-term solution. In the longer term, this solution has a number of serious drawbacks.

First of all, we are speaking about a market of $750 billion in revenue by 2030; this is more than two times bigger than the current revenue of Volkswagen AG, the biggest car manufacturer. So, giving up on developing their own solutions to the problem of dashboard displays means to give up the chance of having a huge additional revenue stream.

Another subject, data privacy, is a particular concern for German car makers. Dashboard display systems collect a lot of information about car drivers. Standards of data privacy are different in Europe than in the US. Having access to collect all this data about car use allows car manufactures to improve their product and differentiate their customers better.

Another important issue is that China doesn’t allow use of Google’s services. China is a huge market, and car manufactures are very interested in it. It means that dashboard displays must be customized for use in China. Customization by country is only one possible example, but there may be more.

The next issue is cyber security. If the computer system of a Hyundai car were hacked who would be responsible for it: Google or Hyundai? And Google is known for its security issues. In this case, Hyundai would lose money and customers and would be dependent on how fast Google is willing to fix the issue. Taking into account the fact that the cars can have fairly old versions of the operating system on their devices, the readiness of Google to fix the issue may be very low. So, the reputation of the car manufacturer will be dependent on the willingness of Google to fix issues. That is why top car manufactures, like Volkswagen AG, are trying to develop their own devices.

As I mentioned before, this solution has its own drawbacks, of having software development and competing in the area of computer giants, but this decision also brings a lot of advantages, as mentioned before. If Tesla is going this way, the biggest car manufactures will probably choose to do the same, as Volkswagen AG are already doing.

Photo by Viktor Theo