We visited three car dealers today: Mazda, Honda, and Subaru. All three of the manufacturers have priced their factory navigation systems at $2000. Selling a $100 product for $2000 should be yielding tremendous profits for these guys… except that none of the dealers was interested in selling it. “I tell all of my customers to go to BestBuy instead of spending $2000,” the Mazda sales guy noted. Among all three dealers there might have been two or three cars in inventory with factory nav.
We saw no cars with an RFID key; all of the cars had mechanical keys that you turn. We saw no cars with navigation, and certainly none that had replaced the dashboard real estate consumed by the tach and speedo with a flexible LCD screen including nav. We saw no cars with remote start. We saw no cars with any ability to use WiFi or a 3G Internet connection. We saw no cars that could accept a music input via Bluetooth.
I’m wondering now if the inability of mainstream car manufacturers to take advantage of modern electronics is harming their profitability. Since the cars themselves mechanically are not very different from a 5-year-old car, and the electronics are the same as those on a 5-year-old car (unless the consumer wants to spend $5000 extra), a lot of potential customers will decide to keep their 5-year-old car. Since all of companies seem equally unable to do anything interesting with electronics, it might seem that incompetence with electronics/software is not a competitive disadvantage. But the car companies still have to compete with the cars that they made five years ago. And the Chinese and Indian new entrants to the market might prove more innovative.