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How Big Tech is helping transform cars into smartphones

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Reuters
Reuters
Reuters is an international news organisation owned by Thomson Reuters

LAS VEGAS: Technology companies transformed smartphones and televisions into continuous fountains of revenue. Now, big tech wants to work with automakers to do the same thing for your car.

With the widespread rollout of autonomous vehicles still years away, the two industries have converged on the idea of cars providing services and features delivered “over the air” – that is, over the same wireless data networks used by smartphones.

Those services – streaming video, vehicle performance upgrades, dashboard commerce – could answer a pressing need for automakers. They need to learn how to milk their hardware for revenue long after vehicles roll off dealers’ lots. Tech companies see cars and the time people spend in them as a new frontier for growth.

Big Tech cars into smartphones
FILE PHOTO: The Byton M-Byte all-electric SUV, expected to enter mass production this year, is displayed at a news conference during the 2020 CES in Las Vegas, Nevada, U.S. January 5, 2020. REUTERS

Both auto and tech companies used the big CES technology show here this week to showcase their determination to make the vision of vehicles as connected revenue machines a reality. Cloud computing giants Amazon.com Inc and Microsoft Corp were in the forefront, chasing the opportunity to manage torrents of data flowing to and from connected vehicles.

“It’s absolutely huge,” General Motors Co President Mark Reuss said in December of the opportunities to generate revenue after a vehicle is sold by providing streamed services and over-the-air upgrades facilitated by GM’s new high-capacity onboard electrical system.

Big Tech cars into smartphones

The pivot comes at a time when global automakers are looking for fresh revenue sources as sales slow and as rising costs to comply with tougher emissions standards threaten profit margins. Shares of legacy automakers such as Ford Motor Co and GM badly lagged broader market indexes in 2019. The contrast is Tesla Inc, whose market cap on Wednesday for the first time exceeded Ford and GM’s combined market values.

Tesla pioneered the model for charging for over-the-air upgrades, now asking customers to pay $6,000 to turn on the full self-driving option.

Other automakers are eager to try their hand at turning cars into upgradeable, revenue-generating gadgets.

Big Tech cars into smartphones

Chinese carmaker Byton’s new M-Byte sedan features a 48-inch screen as a dashboard, as well as a steering-wheel display and a digital tablet for passengers. When parked, the car can be an office, enabling video conference calls, or a roadside cinema.

BMW showed at its CES display a concept of its future interior with reclining lounge chairs and a windshield with augmented reality built in to annotate the road ahead. BMW executive Klaus Froehlich told Reuters the automaker is seeking approval from the National Highway Traffic Safety Administration to get U.S. approval for the seats, but could not say when they would appear in production.

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