The auto industry is approaching Car Apps in an interesting way

I saw an article today on Ford and Toyota launching a Consortium to get developers to build on the Smart Device Link (SDL) platform. You can learn more about it on the SDL homepage.

The strange thing is, SDL appears to be a declarative way to express your application while still giving the auto manufacturer the control over how things actually lay out in the car. I am curious, don’t the brands building want to own the display for THEIR application?

The other thing that comes to mind is “what value do I get out of building for a car platform?” Does this make my users more sticky? Is it just the PR value for the announcements and ongoing press? (which does have some real value) Are companies able to not only build, but keep up with the platforms in the auto space as it gets more fragmented?

I was curious, I am sure there has to be a handful of key apps that motor companies want on their platform. If they think it is a differentiator, or something that partners of the Open Source SDL platform could benefit from, why not just build it for them?

Taking Ford as an example.

Assuming nobody was kicking in money but Ford, and they ate all of the costs, it is probably still worthwhile. (but they could spread the cost over each SDL partner and encourage other car manufacturers to sign up for the platform)

Ford made $7.2B in revenue in 2015. (with a gross revenue of $23M) That’s nothing to sneeze at for top line. Now, let’s say you wanted to ensure you got the top 20 applications on your platform. Things like weather, music, podcasting, traffic, etc. You could hand select a couple from each category and build the winners with no cost to them.

You can see that even at an estimated cost (wild ass guess) of $500k per application to build, getting the top 20 apps would be roughly 1/10th of a percent of Ford’s top line revenue.

Now, let’s say they could convince just 4 other companies to help share the cost. This becomes a much better value for them, and others; something each company could easily justify to expand from the top 20 apps, to the top 50 apps if it show real value as a differentiator.

There are probably arguments to be said about doing what SiriusXM did with building the cost of the services in to the cars, that would be a whole separate discussion.. but it is something interesting to think about.

EDIT:  I should have taken the extra step to calculate additional car sales against competition due to the advantage, and top line growth due to that number.. but I was running under the lazy assumption that Ford/Toyota did that work, and that’s why they are investing in the platform.  It wouldn’t take long though to make up  the revenue..roughly the Equivalent of 1 days sales or less.