Next Battlefield: Global IT Giants Eyeing Smart Car Market | BusinessKorea

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Lexus RX450h retrofitted by Google for its driverless car fleet. (Photo by Steve Jurvetson via Wikimedia Commons)
Lexus RX450h retrofitted by Google for its driverless car fleet. (Photo by Steve Jurvetson via Wikimedia Commons)
22 April 2014 - 12:28pm

Competition among leading global IT companies such as Samsung Electronics, Google, and Apple is heating up in the smart car market.

According to market research firm Strategy Analytics, the market is estimated to reach approximately US$274 billion in size by 2017, and the ratio of electronic components to vehicle manufacturing costs is expected to amount to 40 percent in 2015 and 50 percent in 2020.

“It is said that those dominating the smart car market will hold a dominant position in the global IT market in the future,” said an industry expert, adding, “It is only a matter of time that electronics companies like Samsung Electronics and LG Electronics enter the smart car industry on a full scale.”

At present, it is Samsung Electronics, Google, and Apple that are leading the competition. Google has worked on its Google Car for years, although the company itself does not manufacture vehicles. The Google Car is a software development project for unmanned driving. The program has been built into a Toyota Prius and some Lexus models for test driving. Co-founder Sergey Brin has recently declared that the Google Car will be available for general consumers within five years.

Samsung Electronics is concentrating its enterprise resources on the same goal, too. It has signed telematics software supply contracts with Tata Motors, the largest automaker in India. Telematics, which is a key technology for smart cars, can be defined as a multi-functional platform for an in-vehicle Internet connection. Samsung is working closely with other carmakers like BMW as well.

In the meantime, Apple is developing iOS for cars, which connects an iPhone with a vehicle. The company is planning to use its mirroring technology with Honda’s vehicles like the Civic MY 2014 so that drivers can view their iPhone screens on the dashboard, send voice calls, use Internet services, and view driving information.

LG Electronics is also trying to enter the market. It has recently established the Vehicle Components Division to this end. Although currently focusing on infotainment using audio and navigation systems, the division is going to expand the scope of business to electric vehicle development in the framework of the inter-subsidiary Vista Project.

The heated competition is likely to give a whole new aspect to the dynamics of the market. For example, it is said that Apple is mulling over merging with Tesla Motors. If Apple, which is falling behind when it comes to smart car patents, acquires Tesla Motors for US$160 billion, it can turn itself into a powerhouse in the industry in no time. Google, on its part, is moving ahead with a joint research project for unmanned vehicles with Tesla in order to keep Apple at bay. Samsung Electronics and LG Electronics are also expanding their cooperation with automakers to cover a wide range of fields not limited to electric vehicle battery development.

Such collaborations are likely to accelerate down the road to the entire range of smart car technologies. “Huge synergy effects are anticipated through cooperation between IT companies and automakers,” an industry source explained, continuing, “Then, the traditional automobile market will take a totally new shape.”

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