What’s The Long-Term Strategy Behind Apple’s Next Iteration Of CarPlay?
Apple’s new version of CarPlay, unveiled at its Worldwide Developers Conference last week, appears to be merely a software update. But it’s much more than that, especially if you view Apple’s interest in the “smart” car space as long-term and strategic.
In several ways, Apple’s CarPlay announcements follow a pattern that the company has used for years before entering a significant new product space. Consider that in January 2001, Apple launched iTunes — — before the end of 2001, Apple unveiled the original iPod. Another illustrative example: after launching HealthKit and the Health app at WWDC in June 2014, the company released the original Apple Watch later that year in September. Though less dramatic, Apple introduced HomeKit in mid-June 2014 at WWDC, which pre-dated its announcement (admittedly less than successful) HomePod “smart” speaker in February 2018. Apple may be using this new version of CarPlay as a preview of how one might interface with a future “Apple car.”
The “new” CarPlay
This observation brings me back to Apple’s announcement of its latest new version of CarPlay, which I consider the most crucial element of the entire developer conference. While the new version of CarPlay will not show up in cars until sometime in 2024, Apple had to make this announcement to apply maximum pressure on carmakers to adopt the new software. As I’ve mentioned before in previous columns, the current tension between Apple and several high-profile carmakers couldn’t be higher: a future where Apple controls the entire car interface, not just at the entertainment level, scares the bejesus out of senior auto executives in Detroit, Germany, South Korea and Japan. The memory of what Apple did to the MP3 space, both from a hardware device and business model (monetization of the online music business) standpoint in the early and mid-2000s, resonates deeply with car executives. After all, the new version of CarPlay could (and probably will) eventually be used in a future “Apple Car” that they will have to compete with.
But car makers presumably will have other concerns with the new version of CarPlay. The latest version of CarPlay essentially opens up Apple’s in-car interface from simply governing Apple-supported apps to controlling the vehicle’s entire instrument panel. CarPlay’s friendly iPhone-inspired interface, already familiar to hundreds of millions of users, will be able to monitor critical car functions like temperature control, speed and other essential instrument clusters. On a more profound level, the new CarPlay interface can be fully customized to let users personalize the look of their instrument panels and utilize cool-looking widgets for calendar appointments, trip data, smart home appliances and weather.
Based on the images shown at WWDC, the new CarPlay interface appears to be superbly well-designed with an “eye candy” look and feel. No surprise there, given Apple’s tremendous (and legacy) expertise in the graphical user interface area. The current version of Apple CarPlay enjoys immense popularity with prospective car buyers: the company claims that 79% of surveyed car buyers would only consider purchasing a vehicle with CarPlay support.
From my perspective, this new iteration of CarPlay looks more like a totally new car-specific OS than merely a refreshed version of CarPlay. To that point, I would argue that Apple’s next-gen version of CarPlay is designed to show that the company can show off its abilities in the in-cabin dashboard space and set the stage for a genuine “Apple car.” After all, the data it will collect after this new version of CarPlay is released will help the company manage the critical data to help develop its own automobile.
Let’s also be clear: Apple must continue to create compelling reasons for customers to stay committed to the iPhone and upgrade to future models. Because CarPlay has an exceedingly iPhone-like look and feel, customers may be less likely to make the switch to an Android device.
The implications for carmakers
There are valid reasons why carmakers might not be as receptive to this new version of CarPlay as the original release. First, this new version of CarPlay (which might be a dramatic step toward a car-specific OS) is setting the stage for Apple’s involvement in determining what specific components are used in the car outside of the infotainment system). As CarPlay starts to report and control some or all of the non-entertainment functions in the car, Apple’s engineers may want to be highly prescriptive of what components are being used, similar to the influence they have with a MacBook, iPhone or iPad. I’m skeptical that most automakers would be willing to divorce themselves from that responsibility.
Secondly, advertising is another powerful reason Apple would like to “take over” all the screens in a car. It can be argued about when completely autonomous vehicles will start to become a force in the auto market. Still, there will come the point when drivers ultimately become passengers and will have idle viewing time. Since most Americans, on average, spend an hour behind the wheel every, CarPlay’s screen takeover throughout the car could represent another potentially significant revenue driver for Apple. While Apple doesn’t collect royalties or fees from carmakers that deploy CarPlay, advertising in self-driving vehicles becomes tantalizing.
In that context, Apple’s CarPlay strategy may be much more grandiose than merely providing a more attractive interface for car functions beyond entertainment. Though speculation still swirls around when Apple will release a fully autonomous car, it’s clear that the company is upping the ante with a CarPlay strategy that has many long-term elements and is much more expansive than previously thought prior to WWDC.
Mark Vena is the CEO and Principal Analyst at SmartTech Research based in Silicon Valley. As a technology industry veteran for over 25 years, Mark covers many consumer tech topics, including PCs, smartphones, smart home, connected health, security, PC and console gaming, and streaming entertainment solutions. Mark has held senior marketing and business leadership positions at Compaq, Dell, Alienware, Synaptics, Sling Media and Neato Robotics. Mark has appeared on CNBC, NBC News, ABC News, Business Today, The Discovery Channel and other media outlets. Mark’s analysis and commentary have appeared on Forbes.com and other well-known business news and research sites. His comments about the consumer tech space have repeatedly appeared in The Wall Street Journal, The New York Times, USA Today, TechNewsWorld and other news publications.
SmartTech Research, like all research and tech industry analyst firms, provides or has provided paid services to technology companies. These services include research, analysis, advising, consulting, benchmarking, acquisition or speaking sponsorships. Companies mentioned in this article may have utilized these services.
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