Massive success paves the way for entry into the automotive sector

Apple Senior Vice President of Software Engineering Craig Federighi speaks about CarPlay on stage at the Apple Global Developer Conference in San Jose, Calif., June 05, 2017.
Josh Edelson | AFP | Getty Images
In the early 2010s, automakers and their suppliers were enthusiastic about creating sophisticated applications for car dashboards that went beyond a CD player and small LED display.
In partnership with companies like Microsoft, automakers have started offering map, music, and roadside assistance services, often bundled together in an upgrade package. They have entered into large consortia to create industry standards for connecting smartphones to cars.
Then Apple came along and changed everything.
Apple introduced CarPlay in 2014 to integrate the iPhone and the dashboard of a car. It has since become ubiquitous in new cars.
Worldwide, more than 80% of new cars sold support CarPlay, Apple said last year. This corresponds to around 600 new models, including cars from Volkswagen, BMW and Chrysler. Toyota, one of the longest-lasting, has started including CarPlay in 2019 models.
It is also a main feature for many drivers and car buyers. Twenty-three percent of new car buyers in the United States say they “must have” CarPlay and 56% are “interested” in having CarPlay when buying a new vehicle, according to a 2017 Strategy study Analytics. When Ford’s long-awaited electric The F-150 goes on sale, it will support CarPlay.
Apple was able to fit in between customers and automakers and make sure its interface was the one every iPhone user wants while driving. It’s an underrated triumph for one of the most successful companies in the world. CarPlay does not contribute to Apple’s revenue or direct profits. But it ensures the continued loyalty of iPhone users and gives Apple a way into the auto industry if it wants to grow.
The power of the smartphone
Easily control your music in CarPlay with iOS 13.
Most cars use Google’s Linux, BlackBerry QNX, or Android Automotive based infotainment operating system to run an in-car dashboard display. Infotainment systems often have their own music or map software, and automakers sell wireless subscriptions and other enhanced features for them.
CarPlay runs on these infotainment operating systems and allows iPhone owners to access their most important apps while driving in a safer way than looking at their phones. With CarPlay, users can access Apple or Google Maps, play Apple Music or Spotify, or dictate a text message to send at home. All of this processing happens on the phone itself.
CarPlay and a rival Android program, Android Auto, are not car operating systems. It really is telephony software, said Mark Fitzgerald, analyst at Strategy Analytics. In the end, it’s like using your car screen as an external monitor for your phone.
“What’s in your car, when you plug it in, is basically a client software client that just renders things from your phone to the screen of your infotainment system,” Fitzgerald said.
Many users find that this is 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 they are in their car, and 33% said they mainly use CarPlay. Only 4% of users surveyed say they use the on-board system for the benefit of CarPlay.
Apple has also developed CarPlay over the years to make it more valuable to iPhone owners.
When CarPlay first came out, you needed a cord to connect your phone to your car. In 2015, Apple began supporting wireless Bluetooth connections, allowing users to start CarPlay simply by getting in the car and plugging in their phone. Although it took a few years for new cars to support this feature, it is now widespread.
Last summer, Apple and BMW announced that users can use their iPhones to unlock car doors or even start the engine, and Apple is participating in a standards group to extend the functionality to more automakers.
Google has similar software, called Android Auto, which extends its Android operating system into the car’s dashboard. CarPlay and Android Auto are not mutually exclusive – a car that supports one usually supports the other. It is popular with its Android app having been downloaded 100 million times now until 2020.
When it became apparent to automakers that the computing power and software of smartphones would improve much faster than they could improve their built-in infotainment systems, they tried to adjust.
The Car Connectivity Consortium, which includes most of the major car manufacturers and the most important suppliers, has developed Mirrorlink, an open standard for connecting smartphones to automotive systems. It was rolled out in 2011, but was quickly replaced by Apple and Google.
Samsung, the standard’s largest funder, and which possesses a major supplier of dashboards, stopped supporting Mirrorlink in his phones last year. No other major Android brand supports it yet, and the consortium’s website only lists several older devices as supported devices.
A big step towards autonomous cars
The new CarPlay Dashboard mode.
Mack Hogan | CNBC
Apple’s success with CarPlay explains the auto industry’s interest in rumors that Apple is considering building its own car. If Apple has been so successful taking control of the dashboard, maybe the company can make it a competitive vehicle.
Since 2014, media have said that Apple is at least exploring software for an autonomous electric vehicle. Earlier this year, Hyundai said in an official statement that he was in talks with Apple about making his car before returning, likely due to Apple’s strict privacy requirements. Hyundai ultimately said it was no longer in talks with Apple.
Auto executives showed outside confidence, but respected the challenge that an automotive Apple might present. The Volkswagen CEO said he was “not afraid” of Apple’s entry into the market. The CEO of BMW said he was “sleeping peacefully at night” in response to questions about Apple’s plans. The Toyota CEO has warned that making a smartphone is very different from making a car.
Apple’s ultimate plans remain unclear. According to a Reuters reportApple could still decide to sell software and hardware – an autonomous driving system – to automakers, instead of designing its own vehicle.
But if Apple were to enter the automotive world, it would need a fundamentally different strategy than CarPlay.
CarPlay is mainly aimed at making the iPhone more desirable. It also offers other benefits to Apple, such as the valuation of Apple Music subscriptions – people want to listen to music in their cars, but need an easy way to control it while driving. In a March memo, Citi analyst Jim Suva estimated that CarPlay could add $ 2 billion to Apple’s annual service sales.
But CarPlay in itself is not a source of income. Currently, CarPlay is free in most new vehicles, from base models to luxury SUVs. BMW was charging users a monthly fee to access CarPlay, but stopped in 2019 after customers complained.
Apple said does not charge vehicle manufacturers to use the software. It is not a licensing business. (If so, Apple could bundle it at $ 750 a unit and sell 9 million units by 2025, generating $ 6.5 billion in sales, Suva estimates.)
Apple could use its anchoring in the car to further support its ambitions. It is already using its App Store distribution platform to encourage software developers to optimize their apps for the car, in categories like finding a car charger, ordering food, or finding a seat. parking lot. These features would be an integral part of an Apple in-car experience. Apple also collects the data necessary to run CarPlay, and while this data is anonymized to ensure user privacy, it provides Apple with a lot of raw information about what people are doing in their cars.
But CarPlay couldn’t power a self-driving car, which requires different chips and specialized hardware that has been qualified for use in the car.
If Apple were to sell software to autonomous automakers, it would take a different form than CarPlay. Google’s automotive fragmentation is a good example: it builds Android Automotive as a car operating system, Android Auto as a competitor to CarPlay, and has funded the development of Waymo, a self-driving technology company and automotive service which is now a sister company of Alphabet.
Still, CarPlay’s success could create built-in demand for an Apple car – or at least ensure consumers don’t dismiss the idea as crazy.
Apple typically unveils updates to its CarPlay software at its annual developer conference, WWDC, which begins on June 7 this year.