JACK OTTER: AUTOMAKERS HAD A
ROADBLOCK.
SALES HAVE BEEN HARDLY BUDGETED
AND STOCKS HAVE DONE WORSE.
AUTO COMPANIES ARE BRANCHING
BEYOND CARS TO BOOST PROFITS.
NOW ROOT JOINS THE PANEL.
THAT’S A GREAT STORY.
SEEMS TO BE THE AUTOMAKERS ARE
USING THE GEL THAT PHILOSOPHY.
GIVEAWAY THE RAZOR AT COST,
MORE EXCITING THAN RAZOR
BLADES.
>> IT’S THE NAME OF MY
SOFTWARE.
THEY ARE MORE PHONE LIKE, GIANT
IPADS GLUED TO EVERY NEW CAR.
THE HOLY GRAIL OF RECURRING
REVENUE.
YOU STOP A CAR ONCE BUT HAVE AN
ONGOING RELATIONSHIP.
INFOTAINMENT, THE BEST EXAMPLE
IS TESLA, THEY CHARGE FOR
PREMIUM CONNECTIVITY THAT LETS
YOU STREAM NETFLIX IN PART AND
ALL THOSE APPS AND THINGS LIKE
THAT THAT YOU WILL BE ACCESSING
FROM THAT SCREEN, HAVE TO HAVE
CONNECTIVITY TO CELLULAR
NETWORK, THAT IS WHAT THEY WANT
TO CHARGE FOR.
JACK OTTER: AND SELL CAR
INSURANCE.
>> BASED ON DRIVING BEHAVIOR,
TO UNDERWRITE OR GIVE THE DATA
TO AN EXISTING UNDERWRITER TO OFFER BETTER INSURANCE, CHEAPER
OFFER BETTER INSURANCE, CHEAPER
PRODUCTS, THAT IS ANOTHER ONE.
JACK OTTER: FOR YEARS WE’VE
TALKED ABOUT THIS THING AND THE
DIFFERENCE, DEBT ECONOMISTS
DRIVING.
>> IT PROBABLY IS TEN TIMES THE SIZE OF THE OPPORTUNITIES OF
SIZE OF THE OPPORTUNITIES OF
THE OTHER TWO.
THINK ABOUT DRIVER ASSISTANCE,
LANE KEEPING, CRUISE CONTROL.
AS THEY UPGRADE ON-THE-FLY,
THEY WILL HOPE YOU WILL BE
WILLING TO PAY A MONTHLY FEE
FOR THAT ABILITY TO UPGRADE.
JACK: I WOULD NOT BUY A CAR
WITHOUT CAR PLAY.
>> THAT IS GM AND THEY TOOK
FLAK FROM THIS.
ARE YOU TAKING IT FROM MY
EXISTING CAR?
MOSTLY NEW CARS AND NEW EVs.
NOT THAT THEY AREN’T GOING TO
ENABLE THOSE APPS BUT IT IS
LIKE THEY SAY WHY WHAT I PLUG
MY IPHONE INTO MY IPAD.
THIS GIANT THING ON THE SCREEN,
THE PRODUCT IS BASED ON GOOGLE
MAPS.
YOU WILL HAVE ACCESS TO THE
ANDROID STORE SO IT IS LIKE
JUST CHANGING TECHNOLOGY.
CARLETON: YOU TALKED ABOUT
AUTONOMOUS DRIVING AND
INSURANCE.
THERE IS AN ACCIDENT, WHO
BECOMES LIABLE?
THAT CHANGE THAT IMAX OF THE
INSURANCE INDUSTRY.
>> YES IT DOES.
WE DON’T HAVE AUTONOMOUS
VEHICLES.
MANY YEARS AWAY DESPITE ANY
PROMISES FROM ELON MUSK OR
ANYTHING LIKE THAT.
WHEN WE HAVE OUR FIRST
AUTONOMOUS CAR, 275 MILLION
NON-AUTONOMOUS CARS.
THERE WILL HAVE TO BE
PROPERTY-CASUALTY INSURANCE.
EVEN IF EVERYTHING DRIVES
ITSELF, THE OWNER OF THE
ACCIDENT HAS TO HAVE INSURANCE.
W AMO HAS INSURANCE.
IF THERE’S AN ACCIDENT AND YOU
ARE INJURED IN THE BACK OF THE
LIMO THERE IS INSURANCE.
THE OWNER WILL PROVIDE
INSURANCE.
BEN: WHERE DO I PUT MY MONEY IF
I WANT TO INVEST IN IT?
>> OUR COLLEAGUE ERIC SAVITZ
DEALT WITH THIS, THE CHIPMAKER,
CARS GETTING SMARTER, MORE
CHIPS, HOW DO YOU CONNECT OR
PROCESS THIS DATA?
HE HAD THE TWO I LIKE DO THAT,
NOT NECESSARILY QUALIFIED TO
TALK ABOUT IT.
NVIDIA, QUALCOMM, OTHER WAYS TO
PLAY THAT, LIKE NATURAL
LANGUAGE A I COMPANY, YOU WILL
SAY MY CAR, ORDER ME A BURGER
FROM FIVE GUYS.
TRADITIONAL SUPPLIERS WILL DO
THAT.
BEN: WHAT ABOUT FORD COMPANIES?
>> FORD AND GM, IT IS A MOONSHOT?
MOONSHOT?
$160 BILLION IN SALES, 10
BILLION IN EBIT, A BILLION AND
OPERATING PROFIT FROM
INFOTAINMENT, MAYBE 20 BILLION
IF THEY SOLVE THE AUTONOMOUS
VEHICLE STOCK.
YOU ARE TALKING ABOUT HUGE
OPPORTUNITY IF THEY DO IT.
JACK HOUGH: THE STOCK WENT
CURVE.
WHAT HAPPENED?
>> WORST WE LEARNED, IT IS A
CAR COMPANY.
THERE OPERATING PROFIT MARGIN
IS 11%, ONE PERCENTAGE POINT
BETTER THAN TOYOTA IN ITS MOST
RECENT QUARTER, THEY ARE
SUPPOSED TO BE A NEW CAR COMPANY, VERY BAD.
COMPANY, VERY BAD.
TO TIE INTO THIS ELON WAS -- IF
I MAKE MONEY ON CARS, DRIVING
SOFTWARE -- SO ACTUALLY SOME OF
THAT WAS SURPRISING AND
SHOCKING, DON’T CARE IF I MAKE
MONEY ON CARS BECAUSE I WILL SO
SOME DRIVING SOFTWARE. JACK OTTER: AND TAKE AWAY THE
JACK OTTER: AND TAKE AWAY THE