© Reuters. ‘Clock Is Ticking’ For Apple As It Faces Obliteration In Auto Market, Says Gurman: Here’s How Cupertino Can Turn CarPlay Into A Moneymaker
Benzinga – by Shanthi Rexaline, Benzinga Editor.
With the self-driving car now a pipedream for Apple, Inc. (NASDAQ:AAPL), the company is doubling down on its efforts on CarPlay, a technology system that connects an iPhone to a car’s infotainment screen, said Bloomberg’s Mark Gurman on Sunday.
Project IronHeart: Apple CarPlay is now the “only hope of seriously cracking the automotive market,” said Gurman in the latest installment of his “Power On” weekly newsletter.
“The concept for the new CarPlay, known as Project IronHeart within Apple, was to take the system to the next level by fully integrating it into vehicles,” he said.
The system, according to the columnist, was meant to “take over more screens and a car’s instrument cluster, as well as features like the radio and air conditioning system.” Currently, the interface is focused on allowing a user operate Apple services and “doesn’t handle most of a car’s controls,” he said.
When the company decided to revamp Carplay in late 2021, it proceeded with the intent of taking on Android Auto, a CarPlay-like feature based on Google’s Android operating system, Gurman said. Google’s decision to introduce Android Automotive, which comes installed in the car and is an integrated system that can take over a vehicle’s screens without the need to connect to a phone, has won over auto clientele, including Polestar, Porsche, BMW, Volkswagen, Ford, Lucid, Stellantis and General Motors, he noted.
In just seven years, Android Automotive pushed ahead to the lead with an estimated 35% of the car operating system market, Gurman said.
Apple hopes to win over users and automakers with the upcoming CarPlay’s “slicker interface and greater customization,” the columnist said. The company previously planned to turn the CarPlay into a full operating system that runs directly on cars, he said. However, since this approach would have worked best with Apple-designed chips and other proprietary technologies, it wasn’t considered practical to install it in cars, he added.
As a result, Apple has now opted to go with the new CarPlay that it announced in June 2022 and is set to launch this year, Gurman said. Only Porsche and Aston Martin have so far announced formal support. Additionally, he noted that the slow rollout might stem from Apple’s design team needing to collaborate with carmakers to develop a unique interface and style tailored to each model.
Pushbacks: The limited rollout is focused on only very high-end cars. The only model that will have CarPlay is the Aston Martin DB12, which costs $245,000 and up, Gurman noted. Another pushback, according to Gurman, is that Apple doesn’t have a plan in place to make money from the new software. With Apple shelving the car project, it may now have to rev up CarPlay expansion and “turn it into a moneymaker,” he said, adding the company may have to “cede the entire auto industry to rivals.”
Options Before Apple: Exploring options Apple has to profit off CarPlay, Gurman outlined three strategies:
- Charge automakers to support CarPlay
- Keep old CarPlay as a free feature and sell the new one as an upgraded version by calling it something like CarPlay+.
- Drop the practice of customizing the design for each automaker, provide a slew of templates in the operating system and let users customize the look of CarPlay on their own, thereby saving time.
“The clock is ticking. If Apple doesn’t quickly get more automakers to adopt the new CarPlay, it will certainly lose ground to Android,” Gurman said. “And if the company doesn’t start making money from the software, it will never turn the auto category into a lucrative market.”
Apple ended Friday’s session down 0.22% at $172.62, according to Benzinga Pro data.
Check out more of Benzinga’s Future Of Mobility coverage by following this link.
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