Why Apple and Google Will Dominate the Self-Driving Car Industry

NEWS ANALYSIS: Self-driving electric cars will be about content consumption, not just about transportation. Here's why Silicon Valley will own this nascent industry.  

Google Apple Cars 2

Ken Okuyama is an automobile visionary and he fears that Apple and Google might take over the car industry. I think his fears are well-founded.

Okuyama is a Japanese industrial designer. One of his specialties is designing cars. He designed the Ferrari F60 Enzo and the Porsche Boxster, and redesigned the Chevrolet Camaro and Corvette. He knows a thing or two about cars, especially high-performance cars.

If Apple's and Google's becoming the leading car makers sounds far-fetched, then consider the five following trends in the auto industry. Yes, I know the company formerly known as Google is called Alphabet now. But until the company announces they will operate their car company under the Alphabet umbrella, let's for the purposes of this article call it Google.

1. Automation

Self-driving cars are coming. Within a decade, they'll be far safer than human-driven cars.

A self-driving car is a computer on wheels that uses sensors to gather input from the environment, then artificial intelligence to make decisions about when to stop, when to go, how to avoid obstacles and where to turn.

The car makers are scrambling to acquire the technology to perform this kind of computational kung fu. Companies like Google specialize in it.

2. Computerization

The automation attributes of a self-driving car are governed by one type of computer system. The dashboard is governed by another. A car dashboard is ultimately a user interface—a way for a human to interact with a computer, or set of computers.

As "users" spend less time thinking about driving and more time thinking about how to alleviate their boredom while the car drives them around, the interface will evolve mainly to entertain, rather than provide information about driving.

No company can touch Apple in the department of creating appealing user interfaces and compelling content consumption experiences.

Certainly, the conventional car companies have demonstrated near-total incompetence in this department. Yet, in a few short years, these interfaces will be the main criteria for choosing a car.

For evidence of that, just look at the weird design sensibilities, garish colors and the difficulty focusing on the user interfaces displayed on the in-car entertainment centers of Detroit's current car models.

Cars are also being packed with Internet of things devices. The brakes, climate control systems, lights, adjustable seats and fluid sensors will increasingly resemble home-automation devices and communicate with each other and the car's occupants, and increasingly automate their operations.

Inevitably, cars will communicate with home-automation Internet of things devices as they sit in the driveway or garage.

They'll auto-download podcasts, movies and other content, upload system status and automatically do things like start the engine, warm up the interior and unlock the doors based on information gathered from interior home automation appliances.

For example, the coffee machine, shower, lights, door locks and other devices will enable the car to predict when you intend to come out and get in the car. Whatever content you were watching or listening to in the house will continue playing in the car and vice versa.

These home-automation and Internet of things platforms will be incompatible with each other, but highly compatible internally. So if a family has embraced HomeKit or Google Brillo, they'll be highly incentivized to choose a car that also supports Apple's or Google's respective platforms.

Choosing a car will be like picking a PC. You'll think: Well, I already have an iPhone and an iPad and an iMac. It makes sense also to buy an iCar.

Apple CEO Tim Cook said recently at The Wall Street Journal's WSJDLive conference that "it would seem like there will be massive change in [the automobile] industry, massive change." He went on: "When I look at the automobile, what I see is that software becomes an increasingly important part of the car of the future."

Nobody can disagree with that statement. It's clearly true. The question is: Can current car companies do a better job with software than Silicon Valley can?