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Automotive industry, are incumbents the new Nokia?
The latest developments in the automotive industry make me think. Xiaomi, one of the world leaders in mobile phone development and production is bringing a car to the market and plans to become “one of the 5 surviving car companies worldwide in the next years” in what the CEO describes as a hypercompetitive industry. For that reason, his company will invest $10 billion.
Somehow, I have a déjà-vu feeling. About 20 years ago, I assisted helpless to the disappearance of the keyboards with real keys on mobile phones. They were replaced with a touchscreen. The benefit was evident for the manufacturers, not so much for the clients, at least during the adaptation phase. They were evident as the number of parts to assemble was dramatically decreased and with it the complexity of the phone. It was replaced with software, which is much more flexible and can be updated quickly to add new functionalities.
The automotive industry is going through a similar development but at a much larger scale. The transition from combustion engines to electric engines has dramatically simplified the assembly complexity and the number of parts necessary. Plans exist to steer cars by wires, which would further reduce the number of mechanical parts, dashboards are replaced with screens which again dramatically reduces the number of parts to assemble. Soon, voice…