Smartphones on Wheels – How OEMs and Suppliers can Win the Race for Software Domination

Authors

C. Koehler, A. Neumann, Strategy Engineers GmbH & Co. KG

Summary

Software is the brain and the backbone of automotive vehicles going forward. Digital players like Apple, Baidu, and Google have discovered vehicles as an attractive market and are pushing into the automotive market. Tesla is a role model for many with its strong software focus and mindset. Its stock market valuation is based on expected superior revenues and profits through over-the-air updates during vehicle lifetime which are currently not available to most other OEMs. With this business model, vehicle value does not deteriorate but grows and enables incremental revenue streams over lifetime. Becoming digital and software-oriented requires new capabilities on many levels and drives complexity in established OEMs and suppliers. Strategy Engineers’ study firstly describes what capabilities will be most important, how to manage them and how to make money with software. Secondly, we will also discuss how to best organize the software business and how to develop winning business models based on the new capabilities. Thirdly, the study will describe in which parts of the vehicle real estate the race with digitals can still be won.

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