) seems to be vying for in-car supremacy. Google's plans to
implement in-car mobile technology in Audi vehicles powered by
its Android operating system were reported recently.
However, that now appears to be part of a much bigger deal, as
not just Audi, but many other auto-makers such as
General Motors Co.
), Hyundai and chip-maker
) have formed an alliance to introduce Android to in-car
infotainment systems and navigation.
The main idea behind this alliance is to provide a common
platform to automakers to easily bring cutting-edge technology to
drivers and passengers in a safe and scalable manner.
However, the main challenge facing this alliance until such time
that driverless cars become a reality is the ability to deliver
apps and services that are both helpful and that don't cause
distractions for drivers.
This is not the first time that Google has formed such an
alliance to target a new vertical. Earlier, in 2007, it was a
part of the Open Handset Alliance which, in turn, helped in
transforming Google's operating system from a mere entrant in the
market to a pioneering force.
Google's entry into the Open Automotive Alliance follows the
) iOS in the Car technology, which enables the coupling of the
iPhone with vehicle dashboards.
The inclusion of Google's technology into popular high-end
vehicle models could improve brand awareness and solidify
Google's position in the in-car technology market.
Google generates revenues primarily from the sale of advertising
space on its online properties. It is focused on protecting and
growing its position in the search market through continued
innovation, quality improvements and expansion into various
We, however, anticipate that going forward Google will be
burdened with margin pressure as a result of increasing
competition from companies like
), as well as the growing hardware business.
But Google has shown superb execution to date, which has kept the
shares buoyant. As a result, its share price has appreciated
27.9% over the past year.
Currently, Google has a Zacks Rank #2 (Buy).
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