Google Might Team with Audi to Supersede Apple's In-Car Initiative

Apple AAPL is one of the largest companies developing in-car technology, but Google GOOG might be hatching a plan to overtake its competitor.

According to The Wall Street Journal, Google and Audi AUDVF will announce a new partnership next week at the Consumer Electronics Show. The two companies are thought to be developing an in-car entertainment and information system that is based on Android.

"Most of Google's investments outside of their core business are all about driving people online more often," Evan Wilson, senior research analyst of internet and games at Pacific Crest Securities, told Benzinga. "If you think about the [amount] of time that people have in their day where they're currently not online, the car is a big part of that."

The Next Big Market?

Wilson said Google has been "mostly addressing that" with its self-driving car initiative.

"The competition between Apple and Google has been getting more intense," Wilson added. "Apple has been very active in this area. If there is an announcement to be made, it would also be a step in Google catching up."

Related: The Future Of Self-Driving Cars

Ken Sena, managing director and internet analyst at Evercore Partners, is not sure what Google has planned. But he is confident the company will continue to push into automotive.

"I think they view that as a pretty important platform for them, leveraging the mapping technologies that they've done," Sena said during an interview with Benzinga. "I wouldn't necessarily view the announcement by itself as an indication that they're where they want to be. But obviously you can expect similar announcements to come, and it's a step that clearly they're moving forward."

More System Integration with Car-Makers

Sena thinks in-car technology needs to provide a pull (rather than a push) experience.

"I think that's where Google's strength lies," he added. "How they leverage other entertainment aspects into it, they can do that, but hopefully the drivers and passengers have some control over how that experience unfolds."

Google's expected announcement comes after Apple gained in-car support from BMW, Mercedes-Benz, Honda and GM. In 2014, iOS (Apple's mobile operating system) will be integrated into vehicles from a number of other automakers, including Hyundai/Kia, Volvo, Nissan/Infiniti, Jaguar and Ferrari.

While Apple and Google may be pioneers in the mobile space, Microsoft was the first to focus on in-car technology.

The Windows maker teamed-up with Ford in 2007 and developed SYNC, an in-car communications and entertainment system.

In June, Ford announced that SYNC and MyFord Touch (another Ford/Microsoft creation) were being sold on 79 percent of new 2013 Ford vehicles.

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.