Google (or Alphabet), self-driving cars and Android

The software technology behind Google’s (or actually Alphabet’s) self-driving car is real and probably only a few years away from mass market. Some really interesting writing on their experiences and progress can be found here and here. Overall it is clearly not a question of if, but when by now.

However, the much more interesting question to me is the kind of distribution and business model Google will apply to this technology. Will they actually become a mass manufacturer of cars, or will they play it similar to Android and focus on the software (and actually integrated services) while releasing an own showcase product every once in a while like they are doing with the Nexus phones.

My clear bet is the latter, and this will create a HUGE opportunity for new players to enter the car market, will lead to a completely new value chain of dealerships etc and first and foremost might ultimately lead to dominant Google market shares similar to what we are seeing in the smartphone market (of 80% and above). Google does not control the smartphone device market (not much profit in most parts anyways, but owns the Operating System (OS) market. There are supposedly close to 20.000 different Android devices on the market, with price ranges from 30 to 500 USD and above. Assuming Google will not make similar mistakes with the Operating System fragmentation again, the lure of a cheap / free car OS will have a big impact on who produces cars. The masses of consumers will want this technology quickly and it will be hard for the legacy vendors to catch up if they do not have own technology close to market by now.

And by the way, with Apple working on a self-driving car as well (see here) we might see a fight similar to what happened in the smartphone market all over again. And what should probably worry the established car makers: None of the previous major cellphone makers (Blackberry/RIM, HTC, Nokia, Sony) is of much relevance any more …

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