Automakers have in recent years spent a lot of money on advanced cruise control, vehicle awareness system, and lots of other technologies. Electronics in cars is constantly increasing and there is a competition about who has the best technology and interior. This creates significant growth opportunities for tech companies to develop electronics that is integrated with the car. Much is written about this right now, that's the connected-car. The latest cars are equipped with Internet connections and software which you can use to stream music, search the web, be alerted with weather forecast and traffic conditions. Even driving assistance services such as self-parking and self-driving is now available to a certain extent. This development is going very fast and everyone seems to agree that self-driving cars are the future. Automakers are pouring resources into automated driving right now. For example, have both Ford (NYSE: F) and Nissan (Other OTC: NSANY) opened research labs in Silicon Valley and basically everyone else in the automotive industry is involved in this development.
This creates significant growth opportunities for tech companies to develop electronics that is integrated with the car.
Car manufacturers have been joined by several tech companies who are also interested in the cars of the future. Uber, a company that allows consumers to submit a trip request for crowd-sourced taxi drivers, said it would set up a laboratory in Pittsburgh to develop self-driving taxis. Sony (NYSE: SNE) recently invested in ZMP, a self-driving car startup company. Google (NASDAQ: GOOG) have for several years been working on driverless cars. Unless carmakers are worried yet they should be, because an even larger tech company have started developing something around a car, it's Apple (NASDAQ: AAPL) and they have $178 billion in cash. There has been a huge media storm after cars with sensors/cameras mounted on the roof have been driving around in California, the cars were registered at Apple. But this has probably to do with Apple Maps instead of a car right now. However, this have started discussions about Apple and if they have plans to make a car and if they should make one.
I actually think that we will we see a car from Apple but not in the near future. Initially, they will focus on their CarPlay iOS integration solution. On average people spend 6.5 hours per week in their cars and eventually when all the cars are self-driving, what will people do in the car? The dashboard will become the next big digital platform. That's why we have begun to see several tech companies develop software for cars. But eventually will Apple want have control over both software and the hardware, in other words, the car. If it turns out that this happens, maybe the automotive industry plays out similar as the smartphone market have done. That there are several manufacturers of hardware but basically just two different software options, Android and iOS. I've talked about Apple's big advantage in the smartphone market and explained overalls why I own shares. You can read about it here: My First Stock: Apple
The dashboard will become the next big digital platform.
Apple has several hundred employees who secretly is working on building an electric car, this according to the Wall Street Journal. According to the source is Apple not looking to compete with Google's self-driving car, but with manufacturers such as Tesla Motors (NASDAQ: TSLA). Apple's secret car project is claimed to have codename "Titan" and prototypes should resemble a minivan. It has previously been talk that Apple has tried to hire people from Tesla and that both is approaching each other's employees. It has also circulated an email on the Internet from a Tesla employee, "Apple's latest project is too exciting to pass up," the person said. "I think it will change the landscape and give Tesla a run for its money." Apple spends a lot of money on R&D (Research & Development) and they have certainly thought about building a car. However, Tesla is the one who have made the most progress in the development of the car, they have received great attention because they offer a premium connected-car experience.
A service I use every day is TradingView and it has become essential for anyone who trades on the market. TradingView has all charting tools you need to share and view trading ideas. It's easy and intuitive for beginners, and powerful enough for advanced chartists. Real-time data and browser-based charts let you do your research from anywhere, check it out here.
They have replaced all the buttons that you usually found in a car with a large 17-inch touchscreen, and it can be used for just about anything. Their dashboard is much more advanced than many other car manufacturers. But now have other car manufacturers such as BMW (XETRA: BMW.DE) begun to invest in connected-cars. The development is accelerating very quickly, probably because several tech companies have entered the market. Otherwise is the automotive industry a very slow market, like the financial market. It's estimated that 75% of all cars shipped globally in 2020 will have the necessary hardware to connect to the internet, according to BI Intelligence. This is perhaps not surprising since they also estimate that revenue from connected services is expected to top $152 billion by 2020. There is great money to be made here and everyone seems fully aware of it when we check all large investments.
Yes, the car has to look good on the outside but the entire interior will eventually, almost only consist of various electronics. I'm one of those people who really believe that electricity is the future fuel for cars. We will not have any gasoline cars, hybrid cars or hydrogen cars. Electric cars are the future, it's my belief. This will be a difficult conversion for the automotive industry, many companies will fail to readjust. We will probably be seeing collaborations between tech companies and car manufacturers, it will be a rapidly developing market with tough competition. Car companies will have to spend more on R&D to improve their technologies. Tesla has all-electric cars and with their latest software update will their cars accelerate faster and go further. The possibilities are great when all cars are electric and connected to the Internet. This indicates that carmakers need to become more like tech companies, otherwise will they be taken over.
This indicates that carmakers need to become more like tech companies, otherwise will they be taken over.
Many wonder if Tesla is a carmaker or a tech company. They act in many ways like a tech company and that is one of their strengths. Elon Musk (CEO), said that the next software upgrade will allow the Model S sedans equipped with the latest hardware to drive and steer themselves on major roadways. The software upgrade will be released in the summer, autonomous driving is developing at a furious pace. “We can basically go between San Francisco and Seattle without the driver doing anything,” Musk said on a conference call with reporters. All car manufacturers must, instead of putting in a gear, remove the gearbox in order to compete with Tesla and others in the future. If you want to read more about Tesla, I have written an article about how they've become so successful, you can read it here: Why Tesla Has Been So Successful
There are basically two major obstacles to self-driving cars that we need to overcome. First, regulatory approval and then the drivers nervousness to completely give the control to a computer. But over time, I think it will be just the opposite. It will be considered too risky to let people drive cars, it will be interesting to see how this plays out in the future. During the Consumer Electronics Show 2015, in Las Vegas, cars that can drive themselves were stars. (Here you can see some of the best products from the fair: CES 2015: Amazing Products You Must See.) In the picture above you see a concept car for a self-driving car that Mercedes (XETRA: DAI.DE) unveiled at CES 2015. The main message I want to convey is how close the future, we will soon be able to play chess while sitting in the driver's seat. There will be a lot of competition in the automotive industry the coming years. The car is becoming the next major battleground for tech companies.
If you want to buy stocks without any commissions or fees I recommend eToro. They're the world's largest social investment network, where millions of clients earn by copying the trading actions of the best traders. And by the way it's free, check it out here.
0 comments :