Large success paves means for automotive entry

Apple’s Senior Vice President of Software program Engineering Craig Federighi speaks about CarPlay on stage throughout Apple’s World Broad Builders Convention in San Jose, California on June 05, 2017.

Josh Edelson | AFP | Getty Photos

Within the early 2010s, automotive producers and their suppliers had been enthusiastic about constructing refined apps for automobile dashboards that went past a CD participant and a tiny LED display screen.

Partnering with firms like Microsoft, automobile makers began to provide you with companies for maps, music, and on-road help, typically bundled into an improve bundle. They entered into massive consortiums to create business requirements to attach smartphones to vehicles.

Then Apple got here in and altered every thing.

Apple launched CarPlay in 2014 as a approach to combine the iPhone and a automobile’s dashboard. Since then, it is change into ubiquitous in new vehicles.

Around the globe, over 80% of latest vehicles bought help CarPlay, Apple mentioned final 12 months. That works out to about 600 new fashions, together with vehicles from Volkswagen, BMW, and Chrysler. Toyota, one of many longest holdouts, began together with CarPlay in 2019 fashions.

It is also a high function for a lot of drivers and automobile consumers. Twenty-three p.c of latest automobile consumers within the U.S. say they “should have” CarPlay and 56% p.c are “” in having CarPlay when shopping for a brand new car, in response to a 2017 Technique Analytics research. When Ford’s extremely anticipated electrical F-150 goes on sale, it should help CarPlay.

Apple was in a position to insert itself in between prospects and automobile firms and guarantee that its interface was the one that each iPhone person desires whereas driving. It is an under-appreciated triumph for one of many world’s most profitable firms. CarPlay does not contribute direct Apple revenues or earnings. But it surely ensures ongoing loyalty of iPhone customers and offers Apple a pathway into the auto business if it desires to increase.

The ability of the smartphone

Simply management your music in CarPlay with iOS 13.

Most vehicles use an infotainment working system based mostly on Linux, BlackBerry’s QNX, or Google’s Android Automotive to run a display screen embedded into the automobile’s dashboard. The infotainment techniques typically have their very own music or maps software program, and automobile firms promote wi-fi subscriptions and different upgraded options for them.

CarPlay runs on high of these infotainment working techniques and permits iPhone homeowners to entry their most essential apps whereas driving in a means that is safer than their cellphone. Via CarPlay, customers can pull up Apple or Google Maps, play Apple Music or Spotify, or dictate a textual content message to ship house. All that processing occurs on the cellphone itself.

CarPlay, and a rival Android program, Android Auto, aren’t automobile working techniques. It is actually cellphone software program, mentioned Mark Fitzgerald, analyst at Technique Analytics. In the end, it is like utilizing your automobile’s show as an exterior monitor on your cellphone.

“What’s in your automobile, while you plug it in, there may be basically a consumer software program consumer that’s simply rendering stuff out of your cellphone in your infotainment system show,” Fitzgerald mentioned.

Many customers discover that is all they want.

When customers have each CarPlay and a built-in system, they have an inclination to make use of CarPlay. 34% of CarPlay customers surveyed in 2018 by Technique Analytics mentioned they solely use CarPlay when of their automobile, and 33% mentioned they largely use CarPlay. Solely 4% of surveyed customers say they use the embedded system in favor of CarPlay.

Apple has additionally expanded CarPlay over time to make it extra precious to iPhone homeowners.

When CarPlay first got here out, it required a twine to attach your cellphone to your automobile. In 2015, Apple began supporting wi-fi Bluetooth connections, permitting customers to start out CarPlay simply by getting within the automobile and having their cellphone join. Whereas it took just a few years for brand new vehicles to help this function, it is now widespread.

Final summer season, Apple and BMW announced that 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 times by 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 also owns a major dashboard supplier, stopped supporting Mirrorlink 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.

A big leap to self-driving cars

The new Dashboard mode in CarPlay.

Mack Hogan | CNBC

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, Hyundai said in an official statement that it was in talks with Apple about manufacturing its car before it walked back, most likely due to Apple’s strict secrecy requirements. Hyundai eventually said it was no longer in talks with 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 a Reuters 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.

Apple says doesn’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.

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