Automotive Ecosystem – CarPlay Stagnates

CarPlay 2.0 continues to struggle.

• The next version of CarPlay is certainly not the apple of carmakers’ eyes as the promised launches have failed to materialise adding support to RFM’s view that CarPlay 2.0 and beyond represents a greater threat to OEMs than Google does.
• 2 ½ years ago, Apple announced that CarPlay was being extended to the instrument cluster to push Apple deeper into the vehicle user experience and we were promised that “automakers from around the world are excited to bring this new vision of CarPlay to customers”.
• Apple also led us to believe that 14 OEMs brands had signed up to support CarPlay 2.0 even though some of them did not even know that they were going to be mentioned on Apple’s slide at WWDC 2022.
• The reality was that this announcement was not met with excitement but horror as it is perfectly obvious that the extended CarPlay was designed to entice users to spend more time with Apple further diminishing the digital relevance that most OEMs have in their own vehicles.
• RFM Research has long concluded that if OEMs want to save their businesses in the long term, they need to replace revenues lost from falling vehicle shipments with revenues earned from digital services delivered to the vehicle.
• Executed correctly, digital services can allow OEMs to show steady profit growth given that digital services have far higher margins than vehicles and that RFM forecasts that the opportunity could be pretty large.
• However, to benefit from digital services, OEMs have to remain digitally relevant which means not ceding the digital cockpit to Apple, Google or anyone else.
• Following the announcement, 2 years went quietly by with barely a mention of CarPlay 2.0 which was then updated at WWDC 2024 with some technical details and vehicle models were promised by the end of 2024.
• However, 2024 has come and gone and still, there are no signs of any launches with CarPlay 2.0 and it appears that OEMs and particularly the high-end end are going the other way.
• Mercedes has stated that it will not support CarPlay beyond what it is today (despite being on Apple’s 2022 list) and BMW has launched a new user experience with added hardware complications that look to me like a way to move beyond CarPlay and Android Auto.
• With some of the best-known brands declining to support CarPlay 2.0 and beyond and the lack of launches from anyone else, throws the whole proposition into some doubt in my opinion.
• The technical analysis of CarPlay (see here) reveals that it is not particularly complicated which I think rules out technical difficulties as the cause for the delay leaving the blame firmly on demand.
• Hence, I suspect that almost all (if not all) of those who originally agreed to support CarPlay 2.0 have gotten cold feet as they have realised what ceding the digital cockpit to Apple would mean for their ability to monetise their vehicles in the long term.
• Furthermore, with all the excitement at the moment surrounding AI and voice agents, attention has once again turned to the possibility of using voice in the vehicle as the main man-machine interface.
• RFM Research has concluded that this is a great opportunity for OEMs to improve the vehicle’s digital experience and win back the digital relevance that they have lost to the digital ecosystems.
• Hence, I think that the Apple CarPlay story will remain quiet while the voice agent opportunity is being explored as the last thing OEMs need is to cede this opportunity to Siri.
• Google is more amenable to this and Mercedes is experimenting with using the Gemini LLM as the basis of its assistant which will be invoked by saying “Hey Mercedes!” not “Hey Google!”
• This is irrelevant to Apple’s financial; performance but it makes GM’s strategy to abandon Apple CarPlay in its entirety look less insane with every day that passes.