Google and Apple cars
Tom Dougherty, CEO – Stealing Share
4 March 2015
Google and Apple will hurt automakers
After coming out of the recession, it’s nice to see that the automobile industry has rebounded, both in terms of volume and profitability. Lower gas prices have refueled America’s interest in SUVs and trucks, and cheap money has enabled people to buy that automobile they were putting off purchasing. If history is any guide, what typically happens when an industry does well is that its players take a deep breath and ride on the wave of growth. Players typically don’t truly think ahead because they don’t feel the need to do it. The urgency isn’t there. The urgency has just arrived. They may not upset the apple cart, but Google and Apple may.
I have been reading how many auto executives are growing more and more concerned with what is going on with Google and Apple. On the one hand, all the manufacturers want to partner with either or both of them to ensure compatibility with their mobile devices and seamlessly integrate the device with the automobile.
They want to use Google and Apple OS to run their navigations and other features. In short, they need Apple and Google because their customers demand it. The mobile phone is as ubiquitous in cars today as the seat belt.
On the other hand, Google and Apple are working on manufacturing and selling their own cars.
Google has been working on a self-driving car for years and Apple has its Project Titan. You might be thinking, “So what? How are two tech companies with no automotive experience between them going to hurt an industry so important that the US government bailed them out when they get into trouble?”
The answer is simple, they are going to hurt automakers the same way they have hurt any other competitor that has stood between them and success – they are going to hurt them with their brands.
Google and Apple stand for something. They have rabid, passionate, almost fanatical consumer bases. They may not always be the “best” with a particular device, app, computer or service. But they both represent something so tangible that people will inconvenience themselves in order to have it.
People covet their Androids and iPhones. The Google and Apple brands protect them from missteps and amplify their successes. Simply put, there are few, if any automobile brands that share that same widespread brand affinity with their consumers.
Sure, there are pockets of people here and there who will go to the grave in a Chevy or Ford but that pales in comparison to number of people who stand out in the cold, snow and rain to gobble up the next iPhone or who so willingly give up some of their privacy to use Gmail.
The automobile industry is prime fodder for Apple and Google because there is not a single manufacturer that has spent even a quarter of the time, money and energy that Apple and Google have on their brands. Branding in the automobile industry is a barren wasteland of discarded advertising and slogans that proved to be meaningless to the market, campaign after campaign, year after year.
Watch this year’s Super Bowl ads. How many of us really remember which brand did which ad. Didn’t they all look the same?
The way I figure it, automotive manufacturers have less than five years to do something proactive about creating some real brand meaning before Apple and Google come in and show them what true brand power is all about.
As extreme as it sounds, it would be really sad 10 years from now to read about how similar the demise of BlackBerry is to the demise of Ford, Chevrolet or any other car company today. We all know the power of Google and Apple. So I ask you, automakers, what are you going to do about it? Can you afford not to?
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