Has the iCar Arrived?


As the penetration of smartphones into our lives continues to increase, it is easy to wonder when Apple's (NAS: AAPL) signature "i" will precede nearly every product we buy. Even with Google's (NAS: GOOG) Android claiming the top spot for most-used platform within the smartphone realm, Apple has a special knack for remaining the iconic symbol of every device it makes. In keeping with this tradition, the recent announcement by General Motors (NYS: GM) that certain models will incorporate an integrated "Siri button" leads one to contemplate whether the first iCar has finally arrived. The announcement raises as many questions as it answers, but gives GM investors something to pay attention to as the first units roll into showrooms.

The vehicles
According to GM's Nov. 27 press release, the Siri interface will be available on both the Chevrolet Spark and the Sonic. Each model will offer the Chevy MyLink infotainment system that will allow drivers with an iPhone to connect their iOS 6 device directly to the system. Taking Siri functionality one step further, the system will include an "Eyes Free" mode that is designed to increase driver safety and minimize distractions. Specifically:

In the Spark and Sonic RS, owners can use Siri in Eyes Free mode to:

The interface is designed to address many of the most common causes of distracted driving.

While the introduction of this type of functionality is clearly an advance for Siri, many of the features described above are available in varying formats in other systems. For example, the Ford (NYS: F) Sync system has been offering voice commanded operation for some time and has been a positive point of differentiation on which GM is finally playing catch-up. Both automakers pride themselves on being able to offer advanced technology that, in many cases, surpasses features available on many luxury cars.

A double-edged sword
The inclusion of Apple integration has the potential to be a major boon for GM as it continues to look for ways to differentiate itself from competitors. It remains early in the process, but you should expect to see a series of joint advertising spring up as the new vehicles' release dates come closer.

Of particular interest will be how closely Apple decides to align itself with the development. If it well received it will reflect positively on both companies; if, however, this release is met with a less-than-warm reception, reminiscent of the recent Apple Maps rollout, the news could represent another misstep that Cupertino would prefer to avoid.

The other side of this news, of course, is that by aligning itself with Apple, GM runs the risk of immediately alienating users of Google's Android. While you may believe that the Apple mystique is worth the risk, the sheer volume of Android users raises the question of whether the decision is prudent. Options for Android users within the Chevy MyLink system, specifically on those models, remains unclear, but may prove important.

Furthermore, since Google is not known for its propensity to sit idly on the sidelines, it may choose to align itself with one or more other automakers. While it has typically taken a broader view of its distribution options, preferring to be available across platforms -- think of automakers standing in for wireless carriers in this example -- should the company take a more exclusive approach, this could be a major headwind for GM. The fact that Ford's Sync is powered by Microsoft (NAS: MSFT) makes it an unlikely partner for Google, but certainly should give Microsoft a sense of places to focus its development efforts with both its Windows phones and, perhaps, the Microsoft Surface tablet.

Trading the news
Generally, while it is too early to take a decisive position based on this news, investors in all of the above companies are well advised to take note that the market is heading in this direction. As future developments are released, the inclusion of smartphone integration into new car models is likely to be a major driver of sales in both industries. In the interim, the prudent approach is to remain vigilant and monitor new alliances as they are formed.

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The article Has the iCar Arrived? originally appeared on Fool.com.

Fool contributor Doug Ehrman has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Ford, Google, and Microsoft. Motley Fool newsletter services recommend Apple, Ford, General Motors, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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