Apple CarPlay is supported by 80% of new cars, and this is the bottom line behind Apple’s car making

CarPlay may add $2 billion to Apple’s annual service business sales, but CarPlay itself isn’t profitable.

Apple CarPlay is supported by 80% of new cars, and this is the bottom line behind Apple's car making

1 Apple introduced CarPlay in 2014, thereby integrating the iPhone with the car dashboard.

2 Apple said in 2020 that CarPlay is supported in more than 80 percent of new cars sold worldwide.

3 Apple’s success with CarPlay suggests that the auto industry is interested in Apple’s plans to build its own cars.

May 30 – Back around 2010, automakers and their suppliers were excited about developing sophisticated applications for car dashboards that were no longer limited to acting as CD players and miniature LED screens.

Working with companies such as Microsoft, automakers began rolling out services such as maps, music and roadside assistance, which were often bundled into upgrade packages. Then large consortia joined and began creating industry standards for connecting smartphones to cars. With Apple’s entry into the space, everything began to change.

Apple introduced CarPlay in 2014, thus integrating the iPhone with the car dashboard. Since then, CarPlay has become popular in new cars. Apple said last year that more than 80 percent of new cars sold worldwide support CarPlay. that equates to about 600 new models, including cars from Volkswagen, BMW and Chrysler. Toyota has been one of the longest resisting companies, but it too is starting to roll out CarPlay-enabled models in 2019.

CarPlay is also the feature of choice for many drivers and car buyers. According to a 2017 Strategy Analytics study, 23 percent of new car buyers in the U.S. said they “must have” CarPlay, and 56 percent wanted CarPlay when they bought a new car. will also support CarPlay.

Apple is putting itself between consumers and car companies and making sure that its interface is the one that every iPhone user wants when they drive. While CarPlay has yet to contribute directly to Apple’s revenue or profits, it ensures the continued loyalty of iPhone users and provides a pathway for Apple to enter the automotive industry.

The Power of Smartphones

Apple CarPlay is supported by 80% of new cars, and this is the bottom line behind Apple's car making

Easily control music in CarPlay with iOS 13

Most cars use infotainment operating systems based on Linux, BlackBerry QNX or Google Android Automotive to run the screens embedded in the car’s dashboard. Infotainment systems often have their own music or mapping software, and car companies sell wireless subscriptions and other upgraded features for them.

Neither CarPlay nor its main competitor, Android Auto, are car operating systems; they’re actually phone software, said Mark Fitzgerald, an analyst at Strategy Analytics. Ultimately, it’s like using the car’s display as an external display for your phone.

Many users find that’s all they need. When users have both CarPlay and a similar built-in system, they are more likely to use CarPlay. 34% of CarPlay users surveyed by Strategy Analytics in 2018 said they only use CarPlay in the car, and 33% said they use CarPlay most often. only 4% of users surveyed said they use the embedded system more than CarPlay.

Over the years, Apple has also expanded CarPlay capabilities to make it more valuable to iPhone users. When CarPlay was first introduced, it required wires to connect the phone to the car. in 2015, Apple began supporting wireless Bluetooth connectivity, allowing users to launch CarPlay by simply entering the car and connecting their phone.

Last summer, Apple and BMW announced that users could use their iPhones to open doors and even start engines, and Apple is joining a standards group to expand the feature to more automakers.

Google has similar software, called Android Auto, that extends its Android operating system to a car’s dashboard. carPlay and Android Auto are not mutually exclusive, and cars can support them both. android Auto is popular, and by 2020, downloads of its Android app has reached 100 million downloads.

As automakers began to realize that the computing power and software of smartphones would improve much faster than they could improve their built-in infotainment systems, they tried to adapt. The Automotive Connectivity Alliance, which includes most of the top automakers and most important suppliers, developed MirrorLink, an open standard for connecting smartphones to automotive systems. It was launched in 2011, but was quickly replaced by Apple and Google.

Samsung was the standard’s biggest supporter, but it stopped supporting MirrorLink in its phones last year. no other major Android brands still support MirrorLink, and the Auto Connectivity Alliance’s website lists only a few older devices that continue to support the standard.

A giant leap toward autonomous driving

Apple CarPlay is supported by 80% of new cars, and this is the bottom line behind Apple's car making

The new dashboard mode in CarPlay

Apple’s success with CarPlay explains the auto industry’s great interest in Apple’s plans to build its own cars. If Apple is having great success in taking over the dashboard, perhaps the company can use that to build more competitive cars.

Since 2014, there have been a steady stream of media reports that Apple is at least exploring developing software for electric self-driving cars. Earlier this year, Hyundai said in a statement that the company was in talks with Apple about building its cars before Apple pulled out. But Hyundai ultimately said it was no longer in talks with Apple.

Apple’s final plans remain unclear. But some reports say Apple could still decide to sell software and hardware (i.e., self-driving systems) to automakers instead of designing its own cars. But if Apple were to enter the automotive industry, it would need to adopt a very different strategy than promoting CarPlay.

CarPlay is primarily about making the iPhone more popular, and it offers Apple other benefits, such as making Apple Music subscriptions more valuable – after all, people want music in their cars, but need easier ways to control it while driving. Citi analyst Jim Suva estimated in a March report that CarPlay could add $2 billion to Apple’s annual services business sales.

But CarPlay itself isn’t profitable. CarPlay is currently free in most new cars, from basic models to luxury SUVs. BMW used to charge users a monthly fee to access CarPlay, but stopped in 2019 after customer complaints. Apple says it doesn’t charge automakers to use the software, and it’s not a licensing business.

Apple could use its foothold in the automotive space to support larger ambitions. The company is already using its app store distribution platform to encourage software developers to optimize their apps for cars, such as finding car charging stations, ordering food or finding parking, features that will be a core part of Apple’s in-car experience. Apple also collects the data needed to run CarPlay, and even though that data is anonymized to ensure user privacy, it provides Apple with a wealth of raw information about what people are doing in their cars.

But CarPlay can’t power self-driving cars, which require a different chip and specialized hardware. If Apple were to sell software to self-driving car makers, it would take a different form than CarPlay. Google’s success in the automotive space is a good example: it is building Android Automotive as a car operating system, building Android Auto as a competitor to CarPlay, and funding development projects for self-driving technology company and car service company Waymo.

Still, CarPlay’s success may help create an inherent demand for Apple’s cars, or at least ensure that consumers don’t take the idea lightly. Apple typically releases updates to its CarPlay software at its annual developer conference, and this year’s event will kick off on June 7.

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