Apple and Google vying for car connectivity revenues projected at €180bn by 2020

Google, Apple and a number of luxury automakers are looking to connect the service industry with their internet-enabled vehicles, so that they can be used for services such as ordering coffee and paying for it.

A Bloomberg report suggests that technology companies and other automotive giants are working on transforming cars into full-service mobile devices.

Their attempt comes as a report from McKinsey & Co says that revenue from data streams and connectivity components is expected to rise to a whopping €180bn (£128bn, $199bn) by 2020.

Instead of just producing transport hardware, "We have to get into the service industry in a larger way," Bloomberg quoted Tony Douglas of BMW AG's mobility services unit, as saying.

"The transportation industry is ripe for disruption. Either we kind of drive that disruption and gain from the new business models that will emerge, or we let someone else do it."

Automakers BMW, Volkswagen AG's Audi and Daimler AG's Mercedes-Benz have teamed up to bid for Nokia Oyj's HERE digital map business, the news agency said citing people familiar with the matter.

The move is in line with their need for "fine-grained location data" in order to compete with Google and Apple. In addition, the automakers are preparing for a digital-car age, as almost 90% of vehicles in Western Europe are estimated to be connected to the internet by 2020.

Information about people's whereabouts along with predictive software and mobile-payment systems are expected to be crucial for companies dealing with connected cars.

If they can avoid the fate of being marginalised by Apple and Google, automakers could reap about $400 a car in extra revenue and savings on development spending, Bloomberg reported, citing Roland Berger Strategy Consultants.