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Technology x
Automobile industry
EDGE (FTMBA’14)
Alan, Sun A, Taecko, Yoshi
5/6/2014
Who is going to be a next generation
winner in automotive industry?
1
Automobile Industry is
a History of
Technology
2
3
4
4
5
6
7
8
Market Overview of
Current Automobile
Industry
9
Industry at a Glance in the US
IBIS World(January 2014) 10
Industry at a Glance
Automotive profits now exceed precrisis levels,
but the sources have changed.
(The road to 2020 and beyond: McKinsey&Co 2013) 11
Industry at a Glance in the US
-Market Share
IBISWorld Industry Report 33611a (January 2014)
Major Players
Toyota
GM
Ford
Hyundai-
Kia
Honda
Other 18.9%
18.6%
14.0%
8.1%
7.3%
33.1%
Market share (Revenue)
12
Industry at a Glance in the US
-Products Segmentation
IBISWorld Industry Report 33611a (January 2014)
•  Fuel efficiency has become a top design concern for
manufacturers, with more car models featuring hybrid-electric
drivetrains, smaller forced-induction engines and more advanced
transmissions delivering fuel economy gains.
13
Industry at a Glance in the US
- Five Forces Analysis
Fierce Competition
with low margin
Usually buy one car at
one time
Entirely new players are coming!!!
Powerful auto union
Weak small suppliers
High upfront capital
requirement
14
Current Industry EcoSystem
A shift to new TECHNOLOGY vehicle will drive growth
15
What’s Coming
NOW?
16
What was the future car? (in 1900’s)
“Everyone will own an
Auto something or
other”
- The Boston Globe imagines the year 2000 -
17
NOW: >80% US people own cars!
Vehicle Ownership rate in the US (per 1,000)
- Davis et. Al. (2011) -
0
87
246
410
711
800
844
828
0
200
400
600
800
1000
1900 1920 1940 1960 1980 2000
18
What was the future car? (in 1950’s)
“Electric vehicles are right around corner”
- Chicago Tribune’s Sunday “Closer Than We Think”
19
NOW: EV is here!
20
What was the future car? (in 1970’s)
“They shouldn’t allow humans to drive”
21
NOW: Google is on!
22
What’s happening now in
Automobile Industry
Catalysts for
Change
23
Car Evolution (Current to Future)
Telematics
Infotainment
Driverless
Connected
Automatic
Safety
Navigation
Smart control
Eco
Cloud
Communication
CarUser
Single service Convergence
•  Automotive is getting smarter
(More user-oriented and More converged)
24
Catalysts for Smart Cars
Regulation Technology Needs
•  Safety
•  Protect people
•  Standard
•  Energy efficiency
•  Environment
•  Carbon emission
•  Electronics
•  Eco technology
•  Telematics
•  Contents
•  Smart phone
•  Mobile
•  Connectivity
•  Technology safety
•  Convenience
•  Second room
•  Emotional privacy
•  Efficient mobility
Government Market
Companies
Smart Car
25
Smart Car Market Trend(Hyundai security report 2014)
0
500
1000
1500
2000
2500
3000
2012 2013 2014 2015 2016 2017
Global Smart car market ($B)
0
500
1000
1500
2000
2500
2008 2009 2010 2011 2012 2013 2014 2015
Automotive with IT market ($B)
0
10
20
30
40
50
60
1960 1970 1980 1990 2000 2010 2020 2030
Electric Component of a Car (%)
0
50
100
150
200
250
2011 2012 2013 2014 2015 2016
# of connected Cars (million)
26
Internet Connected Cars are on the
rise (The road to 2020 and beyond: McKinsey&Co 2013)
27
For example…. Tesla!
•  Tesla is a smart EV
•  17” touch screen controls
•  Model S can be connected and controlled with
iPhone, iPad, iTouch through Tesla App
•  No emission, Advanced electric technology
•  More seating, More technology, More storage
28
Insurgents
Emerging New Players
29
#1 Google
•  Google formed Android based Open Automotive Alliance
(OAA) with Audi, GM, Honda, and Hyundai (Kia)
•  Announced to bringing the Android platform to cars
starting in 2014
30
Google SWOT
²  Experiences in dealing with multiple hardware
manufacturers (Android Alliance with majors)
²  Driverless car technology lends an advantage
²  WAZE (crowd-based)
²  Google Now as the brain
u  No manufacturing capabilities
(pure software company)
u  No control over any car brand
ü  A huge potential market
ü  No standard service yet
ü  Emerging driverless cars era q  Competition from Apple/MS
q  Car manufacturers rise like Samsung, into
developing their own systems
Strength
Weakness
Opportunity
Threat
31
#2 Microsoft
•Current partnership
–Kia UVO system, Lexus enform (Bing), Ford Sync system, Fiat
Blue&Me in-car system
•Windows in the car Concept
–Mirrorlink, to project the phone onto the central display, very much
like CarPlay
32
Microsoft SWOT
²  Cortana, the Microsoft version of Siri
²  Experiences in developing central systems
for cars
u  Windows mobile is less recognized
as a mobile platform
ü  A huge potential market
ü  No standard service yet
q  Competition from Google/Apple, and
incumbents
q  Ford is leaving from MS
Strength
Weakness
Opportunity
Threat
33
#3 Apple
•  CarPlay (iOS in the car):
Smarter and safe way to use iPhone in your Car
34
Apple’s Partners
35
Apple SWOT
²  Siri technology for voice control
²  Strong brand recognition.
Apple provides ubiquitous Apple
experiences on its mobile devices
u  No iPhone, No CarPlay
u  A second music player, second
navigation system, second phone
app, and second voice control
ü  A huge potential market
ü  No standard service yet
q  Intensive competition in smartphone market
q  Decreasing iPhone’s market share
Strength
Weakness
Opportunity
Threat
36
#4 Electronic companies
(Samsung, LG)
•  Provide electronic components to car makers
•  Develop smart car technologies
•  They are waiting for right time to launch their technology
•  They may dominate Smart Car market….
37
Electronics companies SWOT
²  Hardware technology in automotive
electronics components
²  Manufacturing
u  No brand image in automotive and
software (OS)
u  No popular software/application
ü  A huge potential market
ü  No standard service yet
q  Intensive competition in electronic market
q  Too big organization
Strength
Weakness
Opportunity
Threat
38
Industry Shift
What is going to
happen in the
Future?
39
40
41
42
?
43
What Incumbents/Insurgents
should do?
Conclusion &
Recommendations
44
Conclusion: While Incumbents competing at
hardware layer, Insurgents may appear with
innovative approach (Cloud/Crowd services)
Cloud
OS
Hardware
Incumbents
Insurgents
45
Suggestions for Incumbents
●  OS layer: Should create own OS
o  Merge edgy software companies
o  Create Autodrive software and standardize it
o  Acquire talented software engineers and technology
o  Create software/application platform (ecosystem)
faster than competitors
●  because…. WINNER TAKES ALL!!
●  Cloud/application layer
o  Create edgy software community (platform) online
o  Gather cloud/crowd based edgy applications
o  Differentiate from other competitors by apps
…to be continued to part #2 46
Suggestions for Insurgents
●  Leverage Internet-based business models
o  Transfer OS/Apps into the automobile industry
●  Connect the same platform with Cars
●  Leverage existing customer base
o  Utilize network effects
●  Customers are the best sales reps
●  Wider Connectivity
o  Network connectivity is important issue
●  AT&T announced car 4G service $80/m = insane!!
o  Create own network resource like Drone, Satellite
…to be continued to part #2 47
Who’s going to be a winner?
Incumbent?
●  Toyota, GM, Ford, BMW, Audi
or Insurgent?
●  Google, Apple, Amazon
●  Tesla?
48
49

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20140506 edge presentation_part1

  • 1. Technology x Automobile industry EDGE (FTMBA’14) Alan, Sun A, Taecko, Yoshi 5/6/2014 Who is going to be a next generation winner in automotive industry? 1
  • 2. Automobile Industry is a History of Technology 2
  • 3. 3
  • 4. 4 4
  • 5. 5
  • 6. 6
  • 7. 7
  • 8. 8
  • 9. Market Overview of Current Automobile Industry 9
  • 10. Industry at a Glance in the US IBIS World(January 2014) 10
  • 11. Industry at a Glance Automotive profits now exceed precrisis levels, but the sources have changed. (The road to 2020 and beyond: McKinsey&Co 2013) 11
  • 12. Industry at a Glance in the US -Market Share IBISWorld Industry Report 33611a (January 2014) Major Players Toyota GM Ford Hyundai- Kia Honda Other 18.9% 18.6% 14.0% 8.1% 7.3% 33.1% Market share (Revenue) 12
  • 13. Industry at a Glance in the US -Products Segmentation IBISWorld Industry Report 33611a (January 2014) •  Fuel efficiency has become a top design concern for manufacturers, with more car models featuring hybrid-electric drivetrains, smaller forced-induction engines and more advanced transmissions delivering fuel economy gains. 13
  • 14. Industry at a Glance in the US - Five Forces Analysis Fierce Competition with low margin Usually buy one car at one time Entirely new players are coming!!! Powerful auto union Weak small suppliers High upfront capital requirement 14
  • 15. Current Industry EcoSystem A shift to new TECHNOLOGY vehicle will drive growth 15
  • 17. What was the future car? (in 1900’s) “Everyone will own an Auto something or other” - The Boston Globe imagines the year 2000 - 17
  • 18. NOW: >80% US people own cars! Vehicle Ownership rate in the US (per 1,000) - Davis et. Al. (2011) - 0 87 246 410 711 800 844 828 0 200 400 600 800 1000 1900 1920 1940 1960 1980 2000 18
  • 19. What was the future car? (in 1950’s) “Electric vehicles are right around corner” - Chicago Tribune’s Sunday “Closer Than We Think” 19
  • 20. NOW: EV is here! 20
  • 21. What was the future car? (in 1970’s) “They shouldn’t allow humans to drive” 21
  • 22. NOW: Google is on! 22
  • 23. What’s happening now in Automobile Industry Catalysts for Change 23
  • 24. Car Evolution (Current to Future) Telematics Infotainment Driverless Connected Automatic Safety Navigation Smart control Eco Cloud Communication CarUser Single service Convergence •  Automotive is getting smarter (More user-oriented and More converged) 24
  • 25. Catalysts for Smart Cars Regulation Technology Needs •  Safety •  Protect people •  Standard •  Energy efficiency •  Environment •  Carbon emission •  Electronics •  Eco technology •  Telematics •  Contents •  Smart phone •  Mobile •  Connectivity •  Technology safety •  Convenience •  Second room •  Emotional privacy •  Efficient mobility Government Market Companies Smart Car 25
  • 26. Smart Car Market Trend(Hyundai security report 2014) 0 500 1000 1500 2000 2500 3000 2012 2013 2014 2015 2016 2017 Global Smart car market ($B) 0 500 1000 1500 2000 2500 2008 2009 2010 2011 2012 2013 2014 2015 Automotive with IT market ($B) 0 10 20 30 40 50 60 1960 1970 1980 1990 2000 2010 2020 2030 Electric Component of a Car (%) 0 50 100 150 200 250 2011 2012 2013 2014 2015 2016 # of connected Cars (million) 26
  • 27. Internet Connected Cars are on the rise (The road to 2020 and beyond: McKinsey&Co 2013) 27
  • 28. For example…. Tesla! •  Tesla is a smart EV •  17” touch screen controls •  Model S can be connected and controlled with iPhone, iPad, iTouch through Tesla App •  No emission, Advanced electric technology •  More seating, More technology, More storage 28
  • 30. #1 Google •  Google formed Android based Open Automotive Alliance (OAA) with Audi, GM, Honda, and Hyundai (Kia) •  Announced to bringing the Android platform to cars starting in 2014 30
  • 31. Google SWOT ²  Experiences in dealing with multiple hardware manufacturers (Android Alliance with majors) ²  Driverless car technology lends an advantage ²  WAZE (crowd-based) ²  Google Now as the brain u  No manufacturing capabilities (pure software company) u  No control over any car brand ü  A huge potential market ü  No standard service yet ü  Emerging driverless cars era q  Competition from Apple/MS q  Car manufacturers rise like Samsung, into developing their own systems Strength Weakness Opportunity Threat 31
  • 32. #2 Microsoft •Current partnership –Kia UVO system, Lexus enform (Bing), Ford Sync system, Fiat Blue&Me in-car system •Windows in the car Concept –Mirrorlink, to project the phone onto the central display, very much like CarPlay 32
  • 33. Microsoft SWOT ²  Cortana, the Microsoft version of Siri ²  Experiences in developing central systems for cars u  Windows mobile is less recognized as a mobile platform ü  A huge potential market ü  No standard service yet q  Competition from Google/Apple, and incumbents q  Ford is leaving from MS Strength Weakness Opportunity Threat 33
  • 34. #3 Apple •  CarPlay (iOS in the car): Smarter and safe way to use iPhone in your Car 34
  • 36. Apple SWOT ²  Siri technology for voice control ²  Strong brand recognition. Apple provides ubiquitous Apple experiences on its mobile devices u  No iPhone, No CarPlay u  A second music player, second navigation system, second phone app, and second voice control ü  A huge potential market ü  No standard service yet q  Intensive competition in smartphone market q  Decreasing iPhone’s market share Strength Weakness Opportunity Threat 36
  • 37. #4 Electronic companies (Samsung, LG) •  Provide electronic components to car makers •  Develop smart car technologies •  They are waiting for right time to launch their technology •  They may dominate Smart Car market…. 37
  • 38. Electronics companies SWOT ²  Hardware technology in automotive electronics components ²  Manufacturing u  No brand image in automotive and software (OS) u  No popular software/application ü  A huge potential market ü  No standard service yet q  Intensive competition in electronic market q  Too big organization Strength Weakness Opportunity Threat 38
  • 39. Industry Shift What is going to happen in the Future? 39
  • 40. 40
  • 41. 41
  • 42. 42
  • 43. ? 43
  • 45. Conclusion: While Incumbents competing at hardware layer, Insurgents may appear with innovative approach (Cloud/Crowd services) Cloud OS Hardware Incumbents Insurgents 45
  • 46. Suggestions for Incumbents ●  OS layer: Should create own OS o  Merge edgy software companies o  Create Autodrive software and standardize it o  Acquire talented software engineers and technology o  Create software/application platform (ecosystem) faster than competitors ●  because…. WINNER TAKES ALL!! ●  Cloud/application layer o  Create edgy software community (platform) online o  Gather cloud/crowd based edgy applications o  Differentiate from other competitors by apps …to be continued to part #2 46
  • 47. Suggestions for Insurgents ●  Leverage Internet-based business models o  Transfer OS/Apps into the automobile industry ●  Connect the same platform with Cars ●  Leverage existing customer base o  Utilize network effects ●  Customers are the best sales reps ●  Wider Connectivity o  Network connectivity is important issue ●  AT&T announced car 4G service $80/m = insane!! o  Create own network resource like Drone, Satellite …to be continued to part #2 47
  • 48. Who’s going to be a winner? Incumbent? ●  Toyota, GM, Ford, BMW, Audi or Insurgent? ●  Google, Apple, Amazon ●  Tesla? 48
  • 49. 49