GM – The Fourth Estate

GM’s biggest problem is the media.

• GMs decision to end support for Apple CarPlay and Android Auto has sparked a negative reaction from the Apple-loving technology press that seems to have put finger to keyboard to generate clicks rather than to inform.
• GM has announced that its EVs from mid-2024 will no longer support Apple CarPlay or Android Auto which, on the surface, looks like a very risky position to take.
• However, given how the EV rollout is slowing down, this means that GM will support Android Auto and Apple CarPlay in the vast majority of its vehicles for many years to come.
• Consequently, to me, this looks like an experiment and I suspect that should it fail, GM will be capable of restoring Apple CarPlay functionality to its vehicles with an over-the-air (OTA) software update.
• Apple CarPlay and Android Auto are small pieces of software that are installed in the IVI unit that allow apps running on the device to be projected onto the screen of the vehicle as well as access speakers, microphones and other functions as appropriate.
• For example, the smartphone often uses the positioning system of the vehicle which often works better given the size of the vehicle’s antenna as well as its direct line of sight to the sky.
• The problem for the OEM that both of these systems represent is that they encourage the user to use his or her smartphone when in the vehicle rather than the onboard digital experience of the OEM.
• In the long term, this is extremely dangerous as RFM has long identified that OEMs must have a stake in the digital experience of the vehicle or face earning no revenues at all from the potentially very large market for in-vehicle digital services.
• This is why GM is experimenting with removing them from the vehicle and, in contrast to the pearl-clutching of the tech press, there is a possibility that GM might pull this off.
  • First, Android Auto: In the vehicles where Android Auto and Apple CarPlay have been removed, GM will be using Android Automotive with Google Automotive Services (GAS).
  • This means that Android smartphone users will have a better in-vehicle experience than they did when they were using Android Auto.
  • This is because the Google Ecosystem will be installed on the IVI unit meaning that all the services that these users ran on their devices in the car will now run natively on the IVI unit.
  • This will create a faster, more stable and more reliable instance of the same services that they enjoyed before and they will also be better integrated with the other systems of the vehicle.
  • Consequently, for Android users, this represents an improvement over what they had before.
  • Second, Apple CarPlay: This is where the real question mark lies as there is no obvious way that iPhone users will be able to replicate the experience that they are used to in these vehicles.
  • With 65%+ of car buyers in the USA owning iPhones, this would seem to be a very dangerous or even suicidal move on GMs part.
  • This is especially the case as Apple claims that 79% of iPhone users in the USA will only consider purchasing vehicles that are capable of supporting CarPlay.
  • This implies that GM has alienated 50% of all potential buyers of its vehicles and there are already plenty of stories of grumpy car buyers saying that they will no longer consider GM.
  • However, there is a workaround.
  • This is supported by the fact that Google is very popular on iOS devices and the fact that while vehicle occupants are predominantly driving the vehicle, their digital lives in the vehicle are extremely constrained.
  • This is because when one is driving the vehicle, the only digital services that see real usage are navigation and audio media consumption.
  • This means that, as long as GM can come up with good options for iPhone users in these use categories, then it will have a shot at keeping these users happy.
  • Many iOS users (me included) use Google Maps rather than Apple Maps for navigation, as outside of the US coastal cities, it is a much better experience.
  • Even Apple has admitted this and allowed Google Maps to be used with other iOS apps far more freely than before.
  • Hence, for a lot of iPhone users, GM has navigation covered as long as it can enable a seamless transition from an app on the iPhone to the app on the car.
  • The big question is audio media consumption but with Spotify, Sirius XM, Apple Music and many others being available on Android, GM’s coverage of this space for iPhone users is also reasonably well covered.
  • Consequently, I think that GM has the biggest use cases for digital services in the vehicle pretty much covered with the use of Android Automotive with GAS.
  • The caveat is that GM needs to execute a seamless transition for iOS users, and I am pretty sure that Google will be on hand to help out.
• The biggest risk here is the technology media which for much of the time, functions as a second marketing department for Apple.
• So far, the media is assuming that iOS users will be completely left out in the cold which given the size of iOS’s market share in the USA and how important digital is becoming in the vehicle purchase decision, would be suicidal on GM’s part.
• This has the knock-on effect of immediately turning car buyers off to this proposition without asking any questions at all.
• Hence, what GM needs to do now, is to demonstrate how iOS users will be taken care of in a fun-to-use and simple-to-set-up manner even when CarPlay is not present in the vehicle.
• This is a similar conundrum that faced Microsoft when it was trying to develop the Windows mobile ecosystem which was actually quite good once one had started using it.
• Microsoft failed to get this message across and, as a result, the ecosystem never hit critical mass and withered and died.
• This is what GM must overcome to make this a success and given the digital assets it has with Google, there is a chance it could pull it off.
• GM also has to ensure that its deal with Google provides it with enough revenue share that it earns a good return on the sale of its digital soul to Google.
• The alternative is to become a commodity maker of smartphones on wheels eking out a meagre existence on the scraps that the digital ecosystems let fall from their table.