Google to Add Android Infotainment OS to Volvo, Audi Cars

Google has announced deals with Audi and Volvo to add its Android in-car infotainment system to their next generation of vehicles. In a short statement, Google said that the official licensing agreements mean that Audi and Volvo car owners will eventually be able to use the automotive version of Android to control their air conditioning, sunroof and windows, to find nearby restaurants with Google Maps, listen to Spotify and other entertainment content, and ask Google Assistant for help. The company added that a preview of the Audi and Volvo systems will be on display at the Google I/O developer conference in San Francisco beginning on 17 May.

In a separate statement, Volvo said that it plans to launch its version of the Android OS on new models within two years, adding that the large catalogue of popular Android apps developed by Google, Volvo or third-party app developers will offer connected and predictive services in and around the car. Audi said the Android OS will be included in the new Audi Q8 Sport concept technology platform, with the new functions running on the large MMI touch display on the dashboard. The information will also be visible in the Audi virtual cockpit in the driver’s direct field of view, marking the first time the new services have been fully integrated into Audi’s brand-specific infotainment system.

With these agreements, Google is moving to provide a fully integrated Android mobile operating system for motor vehicles. That is a significant step forward, in that existing built-in Android solutions (provided by Honda and Hyundai in some of their car models) have been implemented without the full participation of Google and therefore use old versions of the operating system. Google’s current product, called Android Auto, is not integrated with cars’ on-board computers and needs for there to be a smartphone in the vehicle.

While the full details and functionality of Google’s new Android solutions for Volvo and Audi will become clear after they are demonstrated at the San Francisco conference this week, it is likely that it will be superior to the existing solutions, and that it will give seamless access to selected infotainment content from providers with which Google has partnerships.

In this respect, we see both opportunities and challenges for mobile operators. Of course, while the connectivity for the on-board infotainment system will not come through a smartphone, we imagine that in most cases it would come via the networks of local MNOs. If this type of service sees significant uptake in the marketplace—which would depend on it expanding beyond just these two auto-makers—MNOs would be seeing a new revenue stream. There would need to be mobile service contracts and plans, independent of existing smartphone plans. Or in-car service could be a new plan element to be added to the contracts of existing customers.

However, as we have frequently observed, operators do not want to be relegated to the role of “dumb pipes” in any sector of the mobile market, so in this case they may want to see what they provide to drivers in the way of special, relevant content. The challenge lies in the fact that in a sense, Google will have beaten them to it, by signing deals with Spotify and other content providers, as well as making its own content particularly easy to access. Nonetheless, we believe that MNOs can offer special access to information and entertainment content, as well, and that the best way to do this would be to target the content locally. Operators will be able to make deals of their own with content providers in the home regions of the customers, so that navigation aids, shopping aids, and even entertainment products could be tailored to the specific tastes and needs of the operator’s customers. And mobile operators do have privileged insight into their own customers’ preferences. 

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South Korea Fails to Find Fourth Mobile Operator

Efforts by the South Korean government to license a fourth mobile carrier appear to have failed, as the Ministry of Science, ICT and Future Planning announced that none of the three applicants—Sejong Telecom, K Mobile and Quantum Mobile—met the criteria for the license. The companies were reported to have been incapable of raising funds and presented no detailed plans to run the business. The announcement came after months of bidding and assessments. The government has been trying since 2010 to bring in a fourth player to the mobile market, which is dominated by SK Telecom, KT and LG Uplus.    This is the seventh time in a row that the Korean government has failed in its efforts to add a fourth MNO (the most recent was in May 2015). This galling fact should give policymakers an occasion to pause and reflect. South Korea is one of the most technologically developed and saturated mobile markets on earth. As such, its operators have been finding it very difficult to grow and develop new business, instead relying on poaching customers from each other. The government says it wants to promote better service, lower costs and increase competition; thus the desire to add another operator to shake things up. However, the draconian policies of the Korean Communications Commission, the regulator, over the past several years tend to discourage qualified entrants. The KCC has been imposing fines and other penalties the three operators for what it terms unfair competitive practices, in particular the practice of offering handset subsidies. The punishments meted out by the government have been quite severe, to the point of causing MT to suspend all business for seven days in 2013. We believe that concerns about operating in such an environment deter the best companies from entering the competition. Instead, the three firms that participated in this round “lacked credibility and viability of their fund-raising plans, and they also lacked detailed plans on ways to establish networks and provide services,” according to the Ministry’s statement. One might imagine that the government’s standards are unrealistic, but in fact it lowered its requirements in the wake of the previous failures. Even so, the candidates still failed to make the grade. All three are small or midsize companies with limited capital and technological capacities. Major businesses such as Hyundai Department Store Group that already have involvement in the telecom sector through cable or MVNO operations have declined to apply. Rather than lowering its standards further, we suggest that if the government were to adopt a less threatening attitude toward mobile market participants, potential new participants would feel more inclined to get involved. There may even be an opportunity here for a foreign entity with deep pockets to enter the South Korean marketplace. Want to know if your plans and offers are competitive in your home market? Click hereto see how the Tarifica Mobile Database can help.