Providing digital maps for autonomous cars is expected to be big business. Google has a head start, but is meeting rivals at every turn.
In the consumer market, digital maps serve the primary purpose of helping people find their way from point A to point B. Their use has exploded with the adoption of mobile devices, with Google emerging as the dominant player. Its Google Maps smartphone app has more than 1 billion users a month. Revenue comes from local search ads which place nearby businesses inside search results, and promoted pins, which point them out on routes produced by the app. Morgan Stanley projects that such ads will generate $1.4 billion for Google in 2017, and $3.3 billion by 2020.
Newer products are expanding the use of digital mapping technology. The biggest opportunity is likely in autonomous vehicles, which rely on machine-readable maps. Goldman Sachs estimates the market for maps for autonomous cars will grow from $2.2 billion in 2020 to $24.5 billion by 2050. Google has a head start with Waymo, the autonomous car company spun off from Alphabet. But, The Economist explains, Google “will not have things all its own way. An assortment of other Silicon Valley giants, startups, carmakers and a few old-fashioned mapping firms, are fighting hard.”
Areas of potential for other firms can be found in the three types of data inputs that digital mapping requires. First is the basic map information, concerning roads, buildings and other physical features, which has largely already been commoditised. For example the British open-data repository OpenStreetMap (OSM), along with OpenAddresses, are widely used and global. A number of mapping businesses layer on top of OSM data.
Next is street-level imagery, where Google has the clear advantage. It has been using AI to process images that its “StreetView” cars have been gathering for the past 10 years. This poses a barrier to entry for some, but not all: Swedish start-up Mapillary has a data-set of 25,000 street photos. Its fastest-growing business is providing data from these images to companies looking to build maps for autonomous cars.
The third key input for digital mapping is real-time GPS location data from people with smartphones. Google gets this from its legion of Google Map users. And yet, it has competitors. San Francisco-based Mapbox has a map-specific software-development kit (SDK), which developers can install and use to provide users with maps. Mapbox receives location data whenever a user calls up one of its maps.
There is also HERE, which has been selling map data for car-navigation systems as far back as 1985. The firm was purchased by Daimler, Volkswagen and BMW in 2015. In 2016, a Chinese-Singaporean consortium including internet giant Tencent took a 10% stake in it. In China, HERE will get location data for its digital maps from WeChat. HERE is also working with DJI, the world’s biggest drone maker.
In the US, General Motors, Ford and Fiat Chrysler have invested heavily in digital mapping, through AI start-ups, partnerships with ride-hailing firms, and with Dutch mapping firm TomTom. Still, Google is deeply embedded. Fiat Chrysler has joined Waymo’s self-driving programme, and will use Google’s mapping data.
