Huge success paves the way for cars

In early 2010, carmakers and their suppliers were excited to develop sophisticated car dashboard applications that went beyond the CD player and small LED screen.

Partnerships with companies like Microsoft, carmakers began offering map, music, and roadside assistance services, often packaged in upgrade packages. They entered large consortia to create industry standards for connecting smartphones to cars.

Then Apple came in and changed everything.

Apple introduced CarPlay in 2014 as a way to integrate the iPhone and car control panel. It has since become ubiquitous in new cars.

Worldwide, over 80% of new cars sold support CarPlay, Apple said last year. It works on about 600 new models, including cars from Volkswagen,, BMW, i Chrysler. Toyota, one of the longest delays, has begun to include CarPlay in 2019 models.

It is also a major 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% are “interested” in CarPlay when buying a new vehicle, according to a 2017 Analytics Strategy study. When Ford was expecting electric The F-150 is on sale, will support CarPlay.

Apple has managed to insert itself between customers and car companies and make sure that its interface is what every iPhone user wants while driving. It is an underestimated triumph of one of the world’s most successful companies. CarPlay does not contribute directly to Apple’s revenue or profit. But it ensures the lasting loyalty of iPhone users and gives Apple a path into the automotive industry if it wants to expand.

Last summer Apple and BMW announced so users can use their iPhone to unlock car doors or even start the engine, and Apple is participating in the Standards Group to extend that feature to more car manufacturers.

Google has similar software, called Android Auto, that extends its Android operating system to the car’s dashboard. CarPlay and Android Auto are not mutually exclusive – a car that supports one usually supports the other. It is popular because the Android application has been downloaded 100 million times until 2020.

When it became apparent to car manufacturers that the computing power and software on smartphones would improve much faster than they would be able to improve their embedded infotainment systems, they tried to adapt.

The car connectivity consortium, which includes most of the leading car manufacturers and major suppliers, has developed Mirrorlink, an open standard for connecting smartphones to automotive systems. It was released in 2011, but was quickly replaced by Apple and Google.

Samsung, the largest supporter of this standard, and which also owns main control panel supplier, stopped supporting Mirrorlink in their phones last year. No other major Android brand supports it yet, and the consortium website lists only a few older devices as supported devices.

Since 2014, media reports have stated that Apple is researching at least software for self-driving electric vehicles. Earlier this year, Hyundai he said in an official statement that he negotiated with Apple to manufacture his car before returning, most likely because of Apple strict confidentiality requirements. Hyundai eventually said it was it is no longer in negotiations with Apple.

Automotive executors have shown outward confidence, but respect for the challenge that Apple’s automotive could pose. 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. The CEO of Toyota warned that making a smartphone is much different than making a car.

Apple’s ultimate plans remain unclear. According to a Reuters reports, Apple could still 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 world of cars, it would need a significantly different strategy than CarPlay.

CarPlay is mainly about making the iPhone more desirable. It also offers other benefits for Apple, such as a subscription to Apple Music more valuable – people want to play music in their car, but they need an easy way to drive. In a March note, Citi analyst Jim Suva estimated that CarPlay could add $ 2 billion to Apple’s annual sales of services.

But CarPlay itself is not a money maker. Currently, CarPlay is free in most new vehicles, from basic models to luxury SUVs. BMW used a monthly fee for users to access CarPlay, but stopped in 2019 after customers complained.

Apple says does not charge manufacturers to use the software. It’s not a licensing job. (If so, Apple could link it to $ 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 already uses the App Store distribution platform to encourage developers to optimize their car apps, in categories such as finding a car charger, ordering food, or parking. These features would be a key part of Apple’s in-car experience. Apple also collects the data needed to run CarPlay, and even if that data is anonymous to ensure user privacy, Apple provides a lot of raw information about what people are doing in their cars.

But CarPlay could not run a self-driving car, which requires various chips and specialized hardware that is qualified for use in the car.

If Apple were to sell software to self-driving carmakers, it would take a different form than CarPlay. Google’s car fragmentation is a good example: it builds Android Automotive as a car operating system, Android Auto as a competitor to CarPlay, and funds the development of Waymo, a self-driving technology company and car service that is now a sister company in Alphabet.

Still, CarPlay’s success could create built-in demand for the Apple Car – or at least ensure that consumers don’t dismiss the idea as crazy.

Apple typically presents updates to its CarPlay software at its annual developer conference, WWDC, which begins June 7 this year.