Apple is trying to get into the auto industry. The automakers are not sure how they feel about this.
The next iteration of Apple's car software was announced in June. The digital version of the user interface on all interior screens is powered by the driver's phone. The suggestion was that CarPlay could help automakers sell vehicles.
Almost all of the new cars in the U.S. come with an Apple device. She said that 80% of U.S. buyers would only buy a car if it was compatible with Apple's CarPlay.
When shopping for a new vehicle, it is a must have feature.
The auto industry has two choices: Offer CarPlay and give up potential revenue and the chance to ride a major industry shift, or spend heavily to develop their own software and cater to an increasing audience of car buyers who won't purchase a new vehicle without CarPlay.
As cars connect to the internet, gain self-driving features, and move from being powered by gasoline to powered by electricity and batteries, carmakers sell additional services and features to car owners on a regular basis.
According to a McKinsey report, the car software market will grow at a faster rate than the auto industry. McKinsey analysts think car software could be $50 billion in sales by the year 2030.
Apple wants something from the pie.
In-car subscription revenue for GM is already $2 billion per year and is expected to grow to $25 billion per year by 2030. As a subscription that costs as much as $199 per month, the "FSD" driver assistance features, including auto-parking and lane keeping, were recently added to the list of offerings by the electric car maker.
Chinese automakers are starting to create electric vehicles that integrate with their apps, allowing drivers to get repairs, connect with other owners, or even get their batteries replaced.
Rod Hall wrote in June that he believed Apple could eventually provide services using car sensor platforms.
The next generation of CarPlay will require a lot of buy-in from the automotive industry. Several major carmakers cooperated with Apple, according to the company.
The slide showed 14 car brands, including Ford and Mercedes-Benz, that will be compatible with the new version of the app.
If car-makers don't embrace software services, they will get left behind, according to industry observers.
There is a difficult time in the industry where car companies think they are still making cars. The people are not. Conrad Layson is an analyst at AutoForecast Solutions.
The new version of CarPlay could bring in a lot of money for Apple.
If a user loves the interface of the Apple phone, then they are less likely to switch to a phone from another operating system. Most of Apple's revenue comes from hardware sales.
The company doesn't yet charge a fee to automakers or suppliers, but it could sell services for vehicles the same way it sells iPhone software
Apple has explored features that integrate commerce into the car. The new feature that was announced this summer would allow users to pay for gas from the dashboard of their car.
If Apple ever decided to charge for services in cars, it would boost the App Store's revenue by tens of billions of dollars.
Depending on the app, Apple takes between 15% and 30% of the sales from its App Store.
Data about how people use their cars can be collected by Apple. If it ever releases its own car, it will be worth a lot of information. The Apple car group and its team are separate from one another.
The company gains insight into which routes are most popular when users use the Maps app. It is in a position to see which apps are getting the most use.
Morgan Stanley analysts said in a note earlier this year that self- driving could free up trillions of hours per year that Apple could address with new services and products.
There is an hour of human time worth in a car. Morgan Stanley analysts said that 1.2 trillion hours is a very large number.
Honda, Nissan, and Renault are excited to support the new CarPlay, according to Apple. Over 17 million vehicles were delivered by the 14 brands on the slide.
Car companies might not be as excited as Apple suggests. Most of them haven't announced models that will support the new Apple device.
Land Rover is working with Apple to see how they can be a part of the system. A Land Rover and Jaguar spokesman said it was too early to talk about future offerings.
Mercedes-Benz said it was talking to Apple about the project.
All potentially relevant new technologies and functions are evaluated internally.
Apple says that vehicles will be announced late next year. Apple's relationship with cars may have changed due to the new CarPlay.
The real-time systems in the car will have to be passed on to the user's phone, where it will be analyzed and integrated into Apple's own software and rendered on the car's screens. Vehicles will be included in Apple's interface. The air conditioning can be turned on with the help of an Apple-designed touchscreen button.
Gene Munster wrote in a research note that gaining control of these root functions was notable because it effectively shifted the in-car experience from the hands of the carmaker over to Apple.
The in-car experience is important to the auto industry. Although Apple CEO Tim Cook took a ride in a Rivian truck earlier this month, Apple's digital-first electric car makers have refrained from using the company's software due to the protests of their users.
If in-car computers and screens end up showing Apple's interface, that will make it harder for automakers to sell their services to their customers. They don't have the ability to define their customer relationship with online services.
Radio Free Mobile analyst Richard Windsor said that the goal of the game was for the original equipment manufacturers to have a seat at the table. The user has to keep his phone in his pocket to do that. The carmaker is in real trouble when he turns on something.
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