Apple, Alphabet May Gain If Self-Driving Cars Are 4th Video Screen
Apple ( AAPL ) and Alphabet’s Google helped turn mobile phones into the “third screen” for video consumption, joining the living-room TV and personal computers. Self-driving cars could emerge as the fourth video screen, says Morgan Stanley. And if that happens, Alphabet ( GOOGL ) and Apple loom as Silicon Valley companies that could gain. A new Morgan Stanley research report explores the potential impact of autonomous (self-driving) cars along with the emergence of shared, on-demand Uber-type services on a wide range of industries. If consumers don’t need to watch the road while motoring, they’ll have more time to eyeball Internet content or mobile video. “The car is effectively the 4th screen for media content consumption after PCs, phones and TVs. In our view, this is what the Silicon Valley will be targeting by leveraging the (autonomous) utility,” said the report. “Silicon Valley is interested not only in the utility aspect but more importantly in the potential multitrillion-dollar opportunity selling data, content and experiences unfamiliar to today’s auto firms.” Tech companies loom as partners for new entrants or for traditional automakers. If the fourth-screen model proves accurate, Google could expand its advertising business to a new market. Apple’s services business stands to gain as well. “The automobile is being increasingly viewed as a potential smartphone on wheels,” said the Morgan Stanley analyst team. Apple reportedly is developing an electric car, with a target date of 2019. Google is testing autonomous vehicles in two cities. Competition is growing fast in the autonomous-car market. Tesla is pushing into autonomous vehicles, with Mobileye ’s ( MBLY ) help. Also in the self-driving car race are General Motors ( GM ), Ford ( F ) and other carmakers. GM is partnering with ride-sharing service Lyft. “Driving has long been seen as synonymous with personal freedom. But among the costs of this freedom is what we estimate to be approximately 400 billion hours of non-productive time gripping a steering wheel and trying to concentrate on the road ahead,” said the Morgan Stanley report. “What if the future of automotive transportation afforded consumers with all of the traditional benefits of personal freedom of mobility while using that precious hour per day for other activities?”