What to think about as GM hires Apple’s former iCloud chief
Apple’s CarPlay is eating the world
General Motors has hired Apple’s former VP of Engineering for Cloud Services, Mike Abbott. He is to lead a new software development arm and will report directly to the CEO.
Keep your eyes on the road
Abbott recently left Apple following five years running the cloud division, including iCloud, Messages and FaceTime. While a lot of reporting is focusing on GM’s decision to abandon CarPlay to focus on its own Android-based system, I think the really important thing is what he’s really there to do.
Which I think is less about Apple Music in the entertainment system, and far more reflective of some of the other big trends currently accelerating down the road of the auto industry.
Cars are becoming digital. But we already know that. But cars, or rather what happens in cars, to cars and because of cars, are also turning into a service.
I’m not talking about Uber, or self-driving cars, or even the robots making cars.
And keep your hands upon the wheel
I’m simply focused on the software inside cars, and how what that means – and how makers see what it means – is changing.
Think about high-speed engine modes that are sold as a subscription services, or in seat heating systems that can be unlocked for an additional fee. Tesla, famously, already offers upgrades in this way. According to Capgemini, over 20% of industry revenue will be software derived by 2030.
Thing is, this kind of money matters to an industry attempting to reinvent itself as the planet collapses, economies decline, and people recognize the impact and cost of environmental destruction. The car industry needs to find new ways to both meet sustainability targets and create new business models in this new age.
And it’s all going to be about subscription.
You should think about this because this is what car makers are already considering.
Boston Consulting estimates the car subscription market in Europe and the US could reach $40 billion by 2030.
Stellantis, owner of Fiat, Chrysler, Peugeot and Citroen is looking deeply at this and hopes to generate (and this is a big number so I hope you’re sitting down) as much as €30 billion in annual revenues from such offerings by 2030.
What is car software and how can it build new business?
Car makers including Honda are also exploring what they can do with driver data, from distance to entertainment to insurance provision. That data is gold dust on today’s AI-driven planet, and Apple’s commitment to privacy is either a barrier or a competitive advantage, depending on where you sit.
How much of you do you intend to feed your new computing overlords?
So, I think that Abbott’s job will be to reconfigure GM’s in-car software systems to grab as big a slice of those in-car billions as the company can.
I don’t think that’s an easy assignment, given there really aren’t enough good software developers around to build the great experiences drivers (and pedestrians, if you think about it), demand.
The trouble with the digitization of everything is that everyone needs a developer – and that’s even before identifying a great idea for them to build.
Life in the fast lane, eh?
But hopefully with more free storage than iCloud users see. But you never know. Perhaps you’ll pay extra for a usable passenger seat.
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