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2021-05-31

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Apple's massive success with CarPlay paves the way for automotive ambitions

KEY POINTSApple introduced CarPlay in 2014 as a way to integrate the iPhone and a car's dashboard.In

Apple's massive success with CarPlay paves the way for automotive ambitions

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They entered into large consortiums to create industry standards to connect smartphones to cars.ThenApplecame in and changed everything.Apple introduced CarPlay in 2014 as a way to integrate the iPhone and a car’s dashboard. Since then, it’s become ubiquitous in new cars.Around the world, over 80% of new cars sold support CarPlay, Apple said last year. That works out to about 600 new models, including cars fromVolkswagen,BMW, andChrysler.Toyota, one of the longest holdouts, started including CarPlay in 2019 models.It’s also a top feature for many drivers and car buyers. Twenty-three percent of new car buyers in the U.S. say they “must have” CarPlay and 56% percent are “interested” in having CarPlay when buying a new vehicle, according to a 2017 Strategy Analytics study. When Ford’s highly anticipated electricF-150 goes on sale, it will support CarPlay.Apple was able to insert itself in between customers and car companies and make sure that its interface was the one that every iPhone user wants while driving. It’s an under-appreciated triumph for one of the world’s most successful companies. CarPlay doesn’t contribute direct Apple revenues or profits. But it ensures ongoing loyalty of iPhone users and gives Apple a pathway into the auto industry if it wants to expand.Most cars use an infotainment operating system based on Linux, BlackBerry’s QNX, or Google’s Android Automotive to run a screen embedded into the car’s dashboard. The infotainment systems often have their own music or maps software, and car companies sell wireless subscriptions and other upgraded features for them.CarPlay runs on top of those infotainment operating systems and allows iPhone owners to access their most important apps while driving in a way that’s safer than looking at their phone. Through CarPlay, users can pull up Apple or Google Maps, play Apple Music or Spotify, or dictate a text message to send home. All that processing happens on the phone itself.CarPlay, and a rival Android program, Android Auto, aren’t car operating systems. It’s really phone software, said Mark Fitzgerald, analyst at Strategy Analytics. Ultimately, it’s like using your car’s display as an external monitor for your phone.“What’s in your car, when you plug it in, there is essentially a client software client that is just rendering stuff from your phone on your infotainment system display,” Fitzgerald said.Many users find that’s all they need.When users have both CarPlay and a built-in system, they tend to use CarPlay. 34% of CarPlay users surveyed in 2018 by Strategy Analytics said they only use CarPlay when in their car, and 33% said they mostly use CarPlay. Only 4% of surveyed users say they use the embedded system in favor of CarPlay.Apple has also expanded CarPlay over the years to make it more valuable to iPhone owners.When CarPlay first came out, it required a cord to connect your phone to your car. In 2015, Apple started supporting wireless Bluetooth connections, allowing users to start CarPlay just by getting in the car and having their phone connect. While it took a few years for new cars to support this feature, it’s now widespread.Last summer, Apple and BMWannouncedthat users could use their iPhone to unlock car doors or even start the engine, and Apple is participating in a standards group to spread the feature to more car makers.Google has similar software, called Android Auto, that extends its Android operating system into the car’s dashboard. CarPlay and Android Auto are not mutually exclusive — a car that supports one typically supports the other. It’s popular, with its Android app having been downloaded 100 million timesby 2020.When it started to become obvious to carmakers that the computing power and software in smartphones would improve much more rapidly than they’d be able to improve their built-in infotainment systems, they tried to adjust.The Car Connectivity Consortium, which includes most of the top car manufacturers and the most important suppliers, developed Mirrorlink, an open standard for connecting smartphones to car systems. It rolling out in 2011, but was quickly superseded by Apple and Google.Samsung, the standard’s biggest backer, and which which alsoownsa major dashboard supplier,stopped supportingMirrorlink in its phones last year. No other major Android brand is still supporting it and the consortium’s website lists only several older devices as supported devices.Apple’s success with CarPlay explains the automotive industry’s interest in rumors that Apple plans to build its own car. If Apple had so much success taking over the dashboard, maybe the company can parlay that into a competitive vehicle.Since 2014, media reports have said Apple is exploring at least the software for a self-driving electric vehicle. Earlier this year, Hyundaisaidin an official statement that it was in talks with Apple about manufacturing its car before it walked back, most likely due to Apple’sstrict secrecy requirements. Hyundai eventually said it wasno longer in talkswith Apple.Automotive execs showed outward confidence but respect for the challenge an automotive Apple might present. Volkswagen’s CEO said he was “not afraid” of Apple entering the market. BMW’s CEO said he “sleeps peacefully at night” in response to questions about Apple’s plans. Toyota’s CEO warned that making a smartphone is much different than making a car.Apple’s ultimate plans remain unclear. According to aReuters report, Apple still could decide to sell software and hardware — an autonomous driving system — to carmakers, instead of designing its own vehicle.But if Apple were to enter the car world, it would require a fundamentally different strategy than CarPlay.CarPlay is mainly about making the iPhone more desirable. It also offers also other benefits to Apple, such as making Apple Music subscriptions more valuable -- people want to play music in their car, but need an easy way to control it while driving. In a March note, Citi analyst Jim Suva estimated that CarPlay could add $2 billion to Apple’s annual services sales.But CarPlay in itself is not a moneymaker. Currently, CarPlay is free in most new vehicles, from basic models all the way up to luxury SUVs. BMW used to charge users a monthly fee to access CarPlay, but stopped in 2019 after customers complained.Applesaysdoesn’t charge automakers to use the software. It’s not a licensing business. (If it were, Apple could bundle it at $750 per unit and sell 9 million units by 2025, generating $6.5 billion in sales, Suva estimates.)Apple could use its foothold in the car to support more of its ambitions. It’s already using its App Store distribution platform to encourage software developers to optimize their apps for the car, in categories such as finding a car charger, ordering food, or finding a parking spot. Those features would be a core part of an Apple in-car experience. Apple also collects data necessary to run CarPlay, and even if this data is anonymized to ensure user privacy, it gives Apple a lot of raw information about what people do in their cars.But CarPlay could not power a self-driving car, which requires different chips and specialized hardware that’s been qualified for use in the car.If Apple were to sell software to self-driving car makers, it would take a different form than CarPlay. Google’s automotive fragmentation is a good example: It’s building Android Automotive as a car operating system, Android Auto as a CarPlay competitor, and funded the development of Waymo, a self-driving technology company and car service that’s now a sister company within Alphabet.Still, CarPlay’s success could create built-in demand for an Apple Car -- or at least ensure that consumers don’t dismiss the idea as crazy.Apple typically unveils updates to its CarPlay software at its annual developer’s conference, WWDC, which starts on June 7 this year.","news_type":1},"isVote":1,"tweetType":1,"viewCount":442,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":4,"xxTargetLangEnum":"ORIG"},"commentList":[],"hasMoreComment":false,"orderType":2}

Apple's massive success with CarPlay paves the way for automotive ambitions

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