Google says it wants to charge fees to handset makers in Europe for Android apps such as Googlemaps and Gmail, according to the New York Times. The move is clearly a reaction to the $5.1B fine imposed by the European Commission (and under appeal by Google) in reaction to Google’s perceived monopolist practices.
Is the scare of Google hegemony enough to convince auto makers they need to share data in the interest of preserving their independence?
A key motivation behind the $3.1B acquisition of map maker HERE from Nokia by Daimler, BMW and Audi was to ensure the independence of HERE and access to its maps for support of in-vehicle navigation systems, mobility services and autonomous driving development. In the ensuing three years, the venture has failed to attract any additional auto maker investors even as Audi, BMW and Daimler have proceeded to share vehicle sensor data and expand the HERE platform.
The abiding concern regarding Google, is the potential for the company to disrupt consumer relationships in the industry such that Google ultimately controls such key customer engagement points as service delivery, and content and application management and any related advertising or marketing opportunities. It all comes down to browsing and search which underpin Google’s $100B advertising portfolio.
The car is arguably the ultimate browser. Google wants to own that space.
Many auto makers have their own app platforms today, just as handset makers once did. In the handset space, most independent app stores were long ago eliminated by the dominant Google and Apple offerings. For auto makers the significance of the announcement is that it is a reminder of Google’s over-arching influence. It is enough to give pause to any auto maker considering the broader adoption of Google’s automotive services (i.e. Volvo, Renault) and to give impetus to those considering a tie-up with the HERE-Audi-BMW-Daimler venture.
The confrontation calls to mind the Microsoft Consent Decree arrived at in the U.S. nearly 20 years ago which forbid Microsoft from bundling its Internet Explorer browser with its operating system. By the time that agreement was reached the bundling of IE was a moot point and the importance of advertising was only just emerging.
Makers of Android-based smartphones had no initial comment for the New York Times to report, but the change will mean added cost for these devices that will have to either be absorbed or passed on to consumers.
Auto makers are watching developments closely, or should be, because the cost of implementing Android along with related Google provided services and applications is a key consideration behind adopting the operating system. And many auto makers are in the process of doing just that – sticking the Android operating system into their in-vehicle infotainment systems arriving in the market next year and beyond.
Implementing Android in cars is actually a relatively harmless process as no surrender of customer or vehicle data is necessary. Google has even intimated to auto makers that they will be able to add Google Voice to Android without surrendering customer control. But it may be time for auto makers to consider taking out some insurance in the form of a stake in the HERE joint venture. For its part, HERE will do well to give its best performance as a reliable alternative to Google.