Detroit in January is largely filled with just one group of people, petrolheads.
They come to the Detroit Motor Show in droves, eager to get a peek at the latest offerings from the big three US car makers and the European manufacturers who are competing for market share in the lucrative car market.
But car firms here, while continuing to focus on horsepower, are beginning to turn their attention to processing power.
That’s because most analysts agree that if car makers want to appeal to a younger generation, who are driving approximately 23% less than they used to, they’ll need to shrink cars into, well, iPhones.
“If you look at the buying decisions of the younger generation, they’re a little worried about the navigation system that gets you from point A to point B, but mainly they’re interested in texting and being able to communicate with their friends,” says Gary Silberg, the national automotive sector leader at consultancy KPMG.
Samira Hussain speaks to the head of Mercedes-Benz, Dieter Zetsche
“Whoever gets that right, that’s who will win in the marketplace.”
Dieter Zetsche, the boss of Mercedes, put it more bluntly.
“The car of the future [is] a smartphone on wheels,” he told the BBC.
The Mercedes F 015 drives itself, and can be reconfigured inside for business meetings on the move
Inside Mercedes’ autonomous concept car, the F 015Old v new
While only about 10% of cars are connected to the internet today, that number is expected to balloon to 90% by 2020, according to the consulting group Machina Research.
The big question is who will be behind the software that connects cars – traditional car manufacturers like Mercedes and General Motors, or Silicon Valley giants like Apple and Google, who have turned their attention towards Detroit?
Both tech firms have come out with in-car entertainment operating systems in the last year.
“There is a huge battle between the tech giants and auto firms right now,” says Bryan Reimer, a research scientist at the Massachusetts Institute of Technology’s (MIT’s) AgeLab and the associate director of the New England University Transportation Center.
“The question is: are you going to go to the dealer five years from now and have the choice of an Apple interface, an Android interface or a [traditional] manufacturer’s interface?”
Special Report: Global Car Industry
Staying agnostic
For now, most of the car firms, whose offerings are on display in Detroit, are playing it safe by keeping their options open – while keeping their ears to the ground about what’s happening in Silicon Valley.
Take Ford, for example.
Mark Fields, the company’s chief executive, told the BBC that the company was planning to open a Palo Alto office next week, to ensure that it remained close to Silicon Valley while considering its options.
“I think there are a lot of interested parties in what they call the fourth screen now – the screen within the vehicle,” says Mr Fields.
“There are a lot of competitors that we recognised, a lot of competitors we didn’t recognise, and there are probably a bunch of competitors that haven’t been born yet that want a piece of the auto industry.”
Don Butler, Ford’s executive director of connected vehicle and services, says the firm is “device agnostic”Ford’s strategy has been to continue to develop its software in house, while making sure that it is compatible with the latest tech offerings from elsewhere.
It unveiled the latest version of its in-car entertainment software, Sync 3, at the Consumer Electronics Show (CES) last week, which featured upgrades like the ability to update the software wirelessly, as well as enabling it to interact with apps such as Spotify and AccuWeather.
Notably, the company also switched from using Microsoft software to Blackberry’s QNX operating system.
Yet Don Butler, Ford’s executive director of connected vehicle and services, said the company was still committed to remaining “device agnostic”.
“Whether you’ve got a Blackberry, iPhone, or any of the various flavours of Android device, your phone will be compatible with the Sync system,” says Mr Butler.
Car makers are now competing with tech firms to design the software that connects cars