In an attempt to penetrate further into the auto industry, Alphabet Inc.’s GOOGL Google has entered into a partnership with Fiat Chrysler Automobiles N.V. FCAU to build a new Uconnect infotainment system based on the Android operating system (OS).

Uconnect is an 8.4 inch connected vehicle system that uses an Android 7.0 operating system. This tech will be featured in Chrysler 300 sedan and will be exhibited at the Consumer Electronics Show (CES) 2017 in Las Vegas this week.

Over the last one year, shares of Alphabet have been treading higher. The stock has returned 4.06% compared with the Internet Services industry’s gain of 3.04%.

Uconnect For Automobiles

Google’s Android has been integrated with FCA's infotainment system UConnect. This allows all Android applications, including Google Assisant and Google Maps as well as Spotify and Pandora, to work seamlessly with UConnect. The system will also feature radio and comfort controls.

This new 7.0 Android operating system allows automakers to create a customized infotainment system. This system can control various auto applications including, HVAC, navigation, AM/FM, media streaming, Bluetooth calling and media streaming, multi-channel audio, and digital instrument clusters.

According to Chris Barman, head of electrical engineering at FCA, "With Android, we are able to maintain our unique and intuitive Uconnect user interface, all while integrating our easy-to-use systems with Android's features and ecosystem of applications.”

Both Google and Fiat have been working together for the past few months. In May 2016, Google partnered with Fiat to incorporate its self-driving technology into 100 Chrysler Pacifica minivans to be used as test vehicles.

Looking Ahead

Like all technology companies, Alphabet is making all efforts to boost its presence in the fast growing auto industry.

Earlier, Google had developed the Android Auto platform which helped it to connect a car to Android phones via a USB cable. It enabled certain apps to run from the car’s dashboard directly. Though it didn’t turn out to be a big hit, the tech giant hasn’t given up hope.

To dive further deeper into the auto industry, Google has also made great progress in developing the self-driving technology. Late last month, the company entered into formal talks with Honda Motors. As part of the initial plan, Waymo’s (Alphabet’s new self-driving car unit) self-driving technology integrated Honda vehicles will join its test fleet that includes 100 Chrysler Pacifica hybrid minivans across four cities in the U.S. Initially, the company also made attempts to collaborate with General Motors GM and Ford Motor F which did not work out.

Only time will tell what Uconnect has in store for Google. Nevertheless, we agree that Google's latest venture with Fiat will allow the technology giant to embed itself deeper in the dashboard and grab a greater share in the auto industry.

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Zacks Rank

Alphabet currently has a Zacks Rank #3 (Hold).

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