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FORTUNE.COM// FEB.1 .19TECH
to install their own. Proprietary systems from
Mercedes-Benz and BMW that are slated to
debut this year will let manufacturers compete
with the tech giants for driver data.
“In the coming years, the battleground will
be over user data and the revenue made pos-
sible,” Kim says.
Although the devices are supposed to listen
only when a “wake” phrase like “Hey, Alexa” is
used, the process is not foolproof. Anecdotes
from users worldwide range from amusing to
horrifying. The most worrisome are incidents
in which the devices accidentally record
and send conversations to contacts in users’
phones, or inadvertently make large pur-
chases. Amazon has begun taking measures
to prevent unintended commands, including
allowing customers to set a PIN for voice ac-
tivated purchases and asking for confirmation
before placing a call.
Currently automakers say they get customer
permission before they use the individual data
they collect for marketing or share it with
third parties. Volvo said in a statement that its
technology “takes full account of legal, secu-
rity, and privacy obligations on a global scale”
and complies with a European Union law that
lets residents control how their personal data
is shared.
An Amazon spokesman says that the com-
pany merely shares “anonymized, aggregated
performance data to help automakers improve
the customer experience” and that it doesn’t
provide personally identifiable information to
car companies or developers.
BMW shares the data it collects but says
it doesn’t make money from it directly. “Let’s
say the person is listening to certain music,
and we know there’s a big concert,” says Dieter
May, senior vice president of digital products
for BMW. “Then we would probably give
that to our salespeople to make an offer for a
special ticket.”
But even as governments and corpora-
tions begin to address security questions,
it’s unclear who will control the data that is
collected.
“It’s the latest shiny thing in the car, and the
one with the best speech recognition will win,”
says Roger Lanctot, associate director for auto-
motive at Strategy Analytics, a market research
and consulting firm. “In our winner-take-all
world, that win will be very lucrative.”“Apple CarPlay and Android Auto are
available in even the cheapest models now,”
says Ed Kim, a vice president at automotive
research firm AutoPacific. “I would imagine
that within five years, the vast majority of
new vehicles will have some form of voice
recognition.”
That means more drivers will have access
to technology that alerts them to a sale at a
nearby store—via an audio cue or an on-screen
prompt—or ensures that their grande latte is
ready when they swing by their local Starbucks.
But manufacturers, marketers, and other
businesses may gain even more. Once artificial
intelligence becomes better at understanding
and interpreting speech across a range of dia-
lects, accents, and colloquialisms, cars will be
able to glean even deeper insight into drivers’
behavior and share that information with other
companies.
While it may be convenient for cars to know
your shopping habits and favorite places, that
information can also be used to create targeted
audio or visual ads, sell subscription services,
or tip off third-party businesses. The more
data that Amazon, Google, and Apple collect
by placing their devices inside cars, the more
opportunities they have to serve—or sell to—
customers.
For now, automakers are gearing up to reap
the rewards. Some manufacturers are forgoing
technology from Amazon, Apple, and GoogleVoice-recogni-
tion systems in
cars are on the
rise. The number
of vehicles
equipped with
the technology is
expected to reach
120 million next
year, triple the
number in 2018.COURTESYOFBMW