Car companies have traditionally rejected the latest and greatest gizmos, preferring stable, proven technology
That kid—the one in the back of the SUV with the iPad—is the automotive industry’s worst enemy. He’s also the reason some of the world’s biggest automakers are working with Google to bring its Android software into vehicle infotainment systems.
Early this morning, Google (GOOG) announced the Open Automotive Alliance. It’s a group of technology and automotive companies, including General Motors (GM), Honda Motor (HMC), Audi, Hyundai, and chipmaker Nvidia (NVDA), that want to customize Google’s popular mobile operating system for vehicles. The technology companies get a chance to place their wares into hundreds of millions of cars. Meanwhile, the automakers have an opportunity to modernize the software inside their vehicles and try to keep pace with the mobile devices that are starting to make high-profit infotainment systems obsolete.
The announcement comes the day before the official opening of the International Consumer Electronics Show held this week in Las Vegas, where the theme of car-as-gadget (also called “the connected car”) is expected to dominate. Volkswagen’s (VOW) Audi unit and GM are among the slate of auto companies at CES, which is promoting the growth of car-related exhibits.
Car companies have traditionally rejected the latest and greatest gizmos, preferring stable, proven technology. It’s a stance that makes sense given the safety and reliability concerns they face. The rise and rapid evolution of smartphones and tablets, however, has put a great deal of pressure on these automotive traditions. The mapping services that come free with smartphones have become a compelling alternative to pricey built-in navigation systems. Similarly, a parent might prefer to hand a child a tablet or phone loaded with movies, games, and apps rather than rely on a single DVD playing on backseat screens.
So far, carmakers have largely responded with custom in-car software systems. Ford Motor (F) and Microsoft (MSFT) collaborated on MyFord Touch, which ties cars to mobile devices and allows for things like voice commands. Other carmakers use the QNX software acquired by BlackBerry (BBRY), homegrown software, or variants of the Linux operating system. While the strategy helps car companies create products that differ from their rivals’, it also requires software companies to write different applications for each carmaker—a costly and time-consuming process.
There have already been attempts to solve this problem through partnerships. In 2009, BMW, GM, Intel (INTC), and others, for example, announced the Genivi Alliance, a stab at collaborating around the Linux operating system and supporting software that has had modest results. (Genivi is sponsoring a panel at CES called, alarmingly, “Collaborate or Die” (PDF).)
Android, a variant of Linux, has an advantage over other software because of its dominance in the mobile device industry. The electronics and computing supply chain throughout Asia, Europe, and the U.S. tends to test and tune new components first for Android, providing intense interest and deep expertise around the software. For the automakers, this could translate into access to newer, better technology and lower costs for testing equipment. App makers are also used to creating software for Android. In addition, the likes of BMW, Kia, Audi, and Toyota Motor (TM) already use Google technology for search, maps, and other functions.
Tesla Motors (TSLA) is among the cutting-edge automakers that have popularized the notion of a computer on wheels as the next evolution of the car. The company’s all-electric Model S sedan ships with a 17-inch touch screen and ready access to things like streaming radio. With a few finger swipes, you can split the screen to have a massive top section for Google Maps and a lower section for music.
Elsewhere in Silicon Valley, new companies like CloudCar are working to bridge the technology and automotive realms. The company has built a small computing device that can be plugged into a car to give it a modern infotainment system. The idea is that automakers could then upgrade the small unit as needed to bring new features to their vehicles. In addition, software makers would have a common device to aim at with their applications. Ford has also set up a research center in Palo Alto and open-sourced some of the innards of its cars’ control software to let people create things like custom speedometers.
Vance is a technology writer for Bloomberg Businessweek in Palo Alto, Calif. Follow him on Twitter @valleyhack. 
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