The Frankfurt Car Show is the place for the future of automobiles: Alfa Romeo, Bentley, Porsche, Lamborghini all sporting eye-popping new designs.
But there were two companies at the car show that directed a great deal of attention that as of yet have not mass manufactured a vehicle: Google and Apple. Why are two silicone valley tech companies causing such a buzz at Frankfurt among the growling Lamborghinis and luxurious Bentleys? It's not the CEOs; it's not the companies themselves--as brilliant as they are--but quite simply technological change itself.
Ten years ago, did car manufacturers ever think their big competitors would be a company known for search engines? Did it ever think the maker of the iPod would be possibly driving it out of business? For those who are prescient, like Mercedes, they have foreseen this disruption. Those who don't see it, who think they can compete with Apple and Google because they've been manufacturing vehicles for the last 100 years won't have a chance, regardless of how big they think they are.
For the shift is from the standard parlance of 'torque', engine size, and horsepower, to autonomous, self-driving, and battery-powered. And with this shift in technology, vehicles will be rolling software platforms--and who better at designing that than Google and Apple.
The fear factor, well-expressed by Jack Ewing of the New York Times, is not so much that Apple and Google will take the likes of BMW and Mercedes literally out of business--as it did to Nokia--but that they would turn these great car companies into mere hardware manufacturers, and steal all the profits.
The CEO of Lamborghini, Stephen Winkelmann put it well: sustainability to digital to self-driving are the three stages of the automotive revolution. And it is what every car manufacturer must wrestle with.
We are living in amazing times of technological disruption. How will this automobile revolution play out? Who will be the ones to come out standing? The classic car manufacturers of the past century, or those right now advancing search and creating mobile technology? What happens if the great Lamborghini or Bentley are destroyed by a company making mobile phones and watches?
The way out for the car manufacturers would seem to be collaboration--to not compete but partner. However, then we have the scenario in which the car manufacturers are only hardware providers--not a great deal. Brand might give some leverage, in that one could still own a Lamborghini; but Apple and Google sport some of the heftiest brands in the world. To me, the technology landscape favours Apple and Google, regardless of how intentional a car manufacturing company would be to 'learn' software.
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