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As I see it, there are three op tions for automakers in the coming fifth-screen
economy:
- Double down on existing strengths. Focus on producing bet ter cars, while
abandoning the fifth screen to digital native companies. Companies that do this
will es sentially become the suppliers of hardware (cars) to the tech com panies
that will control the in-car customer experience. - Partner with digital native companies. Let each side bring its strengths to
the table and collabo rate, building the optimal in-car ex perience together. Con-
sidering some tech companies’ giant size, carmak ers that choose this route may
first want to seek alliances or consolida tion within the auto industry to have a
stronger bargaining position. - Compete head-to-head. Car makers with healthy cash flows, ad vanced
technology, and skills in ac quiring smaller tech players may try to beat digital na-
tive companies at their own game and seize the lion’s share of the new, consumer-
centric mobility economy.
All three options could be profi table, though carmakers who take the first
route should be aware that in a driverless future, oper ating mar gins and ROI on
vehicles will likely drop. To choose the right option, carmakers will have to an-
swer these questions:
What are our capabilities today? A few carmakers are already essen tially digi-
tal companies that happen to make cars. Some also have deep pockets to finance
further research.
What’s our strategy for capabil ities tomorrow? To compete aggres sively in the
fifth-screen economy, carmakers must be planning to de sign not just brakes and
trans missions, but also human–machine interfaces.
How skilled are we in high-tech acquisitions? Too many carmakers have paid
too much for too little re turn. Profitable acquisitions depend on the ability to
identify a new tech nology at exactly the right moment: after it has proven its
merit but before it is in the market.
Can we build strong partnerships with cities and digital-native com panies? City
governments, especially in Asia, will lead the implemen tation of driverless tech-
nologies through regulatory changes and perhaps (given the possible benefits au-
tonomous cars could create for traffic congestion and urban life) financial incen-