Drawing parallels is a great way to project technology evolution, comparing the dynamics and changes in one industry with another comparable industry. Analyzing automobiles and phones to understand the nature of the former alongside the latter’s evolution is the experiment we are conducting today.

From Linear Growth in Capacity to Business Model Shift.

The initial cars were fragile, and so was the very initial telecommunication technology. Cars could only have a certain number of people sitting in them or goods stored in them. Telephones could handle calls only to a certain range and duration. The first breakthroughs came when linear growth in capacities made cars and phones larger.

The general trend between phones and cars has been to skip the dealerships or the sellers and sell directly to the consumer. Xiaomi is known worldwide for hos5ng limited-scale online phone launches and thereby skipping the telecom carrier-driven model. Tesla is now selling cars directly to the customers via its Tesla Stores and online platform.

People Demand a Swiss Knife

The phone went from being a telecommunication device to an integrated system with a camera, a music player, a calculator, a real-time clock, internet connectivity, a GPS, a gyroscope, a phonebook, and much more. Automobile technology went from taking people from one point to another at a reasonable pace with good enough safety, to becoming an envelope of technology with traction control, GPS, infotainment systems, seat-massagers, cruise control, higher safety systems, and much more.

The use-cases also showed a remarkable shift towards leasing, sharing, and lifestyle engineering. Phones are now being leased, and are often sold in the secondary markets. A few decades ago, every 5me a new phone was bought, the old phone had to be returned. Lifestyles have also had an impact on the types of phones used. ‘Blackberry Boys’ represented the genera5on of businessmen using the email-friendly QWERTY keypad.

The same lifestyle changes have come around in automobiles. As automobiles’ prices have gone up, people have started opting for used and leased cars instead of buying new ones. Cars have adapted themselves into lifestyle markets with track-cars made for weekend racers, SUVs made for mid-size families, and hatchbacks made for first-time car owners who desire efficiency and affordability. Car-pooling is also an effect of the same trend towards lifestyle engineering.

Looking at the Future: Everything is a Software platform

All the parallels drawn up un5l now show that the evolu5on of automobiles and phones has been comparable. But, that is s5ll looking backward. Is there a reasonable set of predic5ons one can make using this grand analogy? Apparently, yes. Phones went from becoming integrated devices with a ton of features to becoming software platforms. Cars, too, would witness a similar fate.

Today’s phones have a largely identical hardware technology suite – touchscreen, camera, gyroscope, GPS, flashlight, battery, memory storage, and processors. All the noteworthy differen5a5on comes in software that uses all this hardware to give features to specific phones.

The automobile industry has started witnessing a similar trajectory:

  • App Store The app stores democratized technology and created a range of innovations that made iPhones more usable and value-delivering. Automakers would soon adapt this approach and have app-stores dedicated to their vehicles, which would host third-party apps for entertainment, GPS systems, safety, servicing, driving assistance, and a lot more. By becoming the manufacturer of the car that acts as a platform for these apps, automakers will be able to generate new revenue streams in terms of app-commissions while still improving the user experience.
  • AI-Enabled Use-Cases AI has helped phones with face recognition, document scanning, predictive texting, and NLP-powered chatbots. Similar features are now coming to the automobile technology suite with object recognition for self-driving cars, predictive driver behavior, and voice-enabled driver safety guidelines.
  • All Upgrades Are Software Upgrades Tesla has been a specimen showing how software can be used to deliver upgrades even in the automobile industry. Most Tesla users get a new update for their car as soon as they decide to add new features. Soon, this modularity will also translate to the auto-parts industry, which will evolve and provide parts when the user desires an upgrade.

In essence, the automakers who are able to leverage this journey of transformation from vehicle manufacturing to software integration will have the maximum value delivered with efficient systems in place. Tesla, which recently crossed its peers and became the most valued automaker, shows the direction this transformation can take.