App store in the driver's seat: Here comes your next car

If smartphones can have app stores, why not cars?

That's the thinking of at least some of the big automakers as they work to build the foundation for curated selections of car-centric apps that can be purchased directly from the vehicle's in-dash monitor.

The notion of the smart car and connected car applications was a hot topic of discussion at CE Week in New York last month. In May, General Motors told CNET that the first apps for its cars would arrive in the second half of the year, helped by a partnership with AT&T to provide a 4G LTE connection to many of its vehicles.

The increasing rhetoric and hype underscore a broader effort by the automakers to adapt to the changing times and use technology to set themselves apart. The industry, which is used to multiyear development cycles on each car model and a consistent annual shipment schedule, is attempting to work with a mobile device sector more accustomed to a phone or tablet launch every other month, and where the pace of innovation has been relentless. Where automakers had previously focused on the point of sale, moving on from a customer after he drives off the lot, they are beginning to take a page out of the mobile devices industry with more continued support. The answer lies in software. The automakers believe apps and software updates will future-proof smart cars and help them strengthen the relationship with their customers. "We're not just trying to give customers what they want; we're working on what we think they will want in the future," GM Vice Chairman Stephen Girsky said during his keynote address during Mobile World Congress in February. This isn't about getting touchy-feely with the consumer; there's big money involved with this push. The market for hardware related to connected cars could grow to as much as $30 billion by the end of the decade, according to Gartner analyst Thilo Koslowski. The services revenue opportunity could potentially be another $20 billion.

But in racing to deliver the smarter car, the automotive industry risks confusing the customer. Many companies are staking their own different, incompatible path, potentially leading to a future platform war between competing automakers that threaten to sour consumers and developers on the idea of car apps. The automakers may also find that creating and managing a store filled with car-centric apps isn't a task they're really up for.

Those concerns haven't dampened the enthusiasm. In some ways, the car is an ideal "vehicle" for apps, Koslowski said. There's room for multiple physical controls and displays; voice command is a logical addition to the driving experience; battery power isn't a limiting factor; and there's plenty of space to add cellular radios. "The car could be the ultimate mobile device," he said. A personalized driving experience
There's a lot of promise from the idea of car-centric apps. Diagnostic apps can monitor your car's condition and send e-mail or text alerts if it needs servicing. Cars can tap into Internet radio apps for a more customized selection of music, or news, traffic, and weather apps for real-time information relevant to the driver's location. "We as drivers -- that's what we want: more information presented in a safer, more personalized way," said Tom Taylor, vice president of advanced strategy for Verizon Telematics. Verizon Telematics, which provides connected car services during emergencies, was previously known as Hughes Telematics before Verizon scooped it up a year ago.

When a driver can own a car for five years or longer, the ability to upgrade the vehicle's software after the point of purchase at little cost is an attractive selling point. The idea of selecting different apps to customize the capabilities and feel of each car also carries its own appeal. On a holistic level, more connected cars with sensors could provide more accurate driving data, allowing for better traffic information and help with the government's push to reduce accidents.

"I think we're really seeing the beginning of a huge shift in how we view and use the automobile and its role in personal transportation -- and much of this is driven by technology," said Doug Newcomb, a car tech consultant for Newcomb Communications and Consulting.

Luxury car brands, naturally, are at the forefront of this push. Mercedes-Benz, for instance, already offers the ability on select models to run a Google local search, find a nearby restaurant via Yelp, check out a Facebook newsfeed, and get news and stock quotes through its Mbrace system, powered by Verizon. But with GM promising to connect most of its fleet with 4G LTE by 2014, car apps could be hitting the mass market very soon. Hybrid vs. embedded
When it comes to connected car apps, there are two schools of thought: an embedded model in which the apps are downloaded into the vehicle and run by the car's own system, and a hybrid model where apps reside in a smartphone or tablet and can connect to the car's system. Ford's highly regarded Sync system, which can stream music from Pandora on the iPhone to the car, is a good example of the hybrid model.

GM, meanwhile, has been a vocal proponent of the embedded option, and has been particularly aggressive in cultivating developer support for its own platform. At the Consumer Electronics Show in January, GM sponsored a "hackathon" with AT&T to build connected car apps. GM told CNET that it has signed up 1,800 developers as of May. Mary Chan, head of the company's global connected consumer division, envisions navigation, radio, and car diagnostic apps that can be downloaded onto the car. She said it was important for an automaker to fine-tune popular smartphone apps for the car because of driver distraction and safety issues. When GM worked with Apple on integrating Siri, for instance, it stripped out some capabilities because it was deemed too distracting for the driver. "Embedded technology helps simplify the user experience," Chan said in an interview with CNET in May.

Still, there are some who believe that an embedded option is unnecessary for most applications.

"It's a mistake," said Roger Lanctot, an analyst for Strategy Analytics.

People don't want to pay a second time so their favorite smartphone apps can also sit in the car -- a problem that some apps face now on phones and tablets, Lanctot said. And while people spend a lot of time in their cars, they spend more time and are more intimately attached to their phone, making it the logical place for their apps. AT&T's David Haight, vice president of business development for the wireless business, said he has the "fundamental belief that if you pay for the app once, it should go anywhere," but conceded a lot of the business aspect of the apps is still up in the air. The automakers are all exploring both options, and analysts believe the industry will settle on a mix of both models. Cars: the next platform war?
Forget Android vs. iOS. We may be facing a scenario where app fans will have to choose between General Motors and Ford. That's where things are currently headed, with companies such as GM pushing its own proprietary platform, a potential headache-inducing situation for consumers. If drivers have a set of apps on a GM car, will they be able to switch to Toyota or Honda? Or what if they own both cars, but the apps only work on one of the vehicles?

It's similarly frustrating for developers. Sure, GM promises a potential market of millions of cars. But so does Ford, Toyota, and the rest of the automakers, forcing developers into a difficult quandary.

"Automotive is both maddening and super exciting at the same time," said Brian Lakamp, president of digital for Clear Channel, which includes the iHeartRadio app. "The time to market is, oftentimes, a year and sometimes two out, and there is not as much standardization in automotive as there is in other platforms." Chan is hopeful that the industry will converge to a single common platform. "We as an industry recognize what the consumer electronics industry has done successfully: use common standards to drive innovation," she said. Still, she added, there remains a trade-off between common standards and differentiated brands and services that needs to be negotiated. AT&T's Haight said it will just take time. "The (automakers) are all at different places, but they're heading to the same place -- it's all converging," he said. Still, some are skeptical that day will come soon.

"The automotive industry is not good at fair play," Koslowski said.

Others, such as Verizon Telematics, are waiting on the sidelines for the automakers to turn to it for assistance in creating a universal app store. Taylor said that the automakers may find managing an app store to be too far out of their area of expertise, and that a company like Verizon could provide the necessary help. Likewise, Haight said AT&T has been pouring more resources into its connected car division with the hope that it can ultimately serve as the common platform for automakers. However things shake out, the driving experience is poised to change dramatically over the next few years. Hopes are high that it will change for the better. "I'm confident the industry will figure out a way to create something compelling," Koslowski said. CNET's Joan Solsman contributed to this story.