Research Publication – Automotive Ecosystems – Sitting Ducks – CarPlay 3.0

18th October 2024: RFM deepens its coverage of Automotive Ecosystems with a look at the evolution of Apple CarPlay and how it may enable Apple to take over infotainment completely. RFM subscribers will receive their copy by email. 

Selling a car has never made economic sense for Apple but selling an infotainment unit does. It also gives Apple the ability to monetise digital services in the vehicle at the expense of the OEM. Apple has found a way to safely run the instrument cluster on the iPhone opening the way for a complete takeover of the digital cockpit. This will exclude OEMs from the digital vehicle leaving them with very little with which to offset revenue losses from lower vehicle shipments.

• Apple has become the largest threat. Until 2022, Apple was non-threatening to the OEMs as it was using CarPlay primarily to drive loyalty to its ecosystem. With its 2022 move into the instrument cluster, Apple signalled an intent to run the car on the phone.
• Reliability and safety. The problem is that the smartphone is not reliable enough to be considered safe to run critical vehicle systems such as the instrument cluster, presenting Apple with a problem. The solution to this problem was presented at WWDC 2024
• CarPlay 3.0. is how Apple can take control of the instrument cluster via the iPhone and still meet the reliability and safety requirements of the automotive industry. Apple splits the instrument cluster into 4 layers and renders the vital layers with Apple software and hardware on the infotainment unit while running non-critical layers from the iPhone. These are amalgamated by Apple software on the infotainment and then passed to the OEM system to add overlay items like indicators and hazard warnings.
• Software Development: is executed by the OEM using an Apple software development kit (SDK). Apple offers a lot of flexibility in terms of user experience elements but at the end of the day, the instrument cluster is clearly an Apple product with OEM customisations. This greatly reduces the OEM’s digital relevance in the vehicle and threatens to cut them out from the vehicle digital services economy entirely.
• Consumer preferences. Apple has stated that 79% of US consumers will only consider buying CarPlay-enabled vehicles but a 2023 survey from McKinsey puts the figure at closer to 40%. Regardless of which figure is most accurate, Apple has already gained a meaningful amount of market power which could be enough to convince the OEMs to integrate more Apple technology into their vehicles.
• Infotainment takeover. The logical end game for Apple is to have the OEM buy the entire infotainment unit from Apple and integrate it into their vehicles. Unlike the Apple Car, this is a viable business model that would fit well with Apple’s other businesses and give Apple the ability to monetise digital vehicle services at the expense of the vehicle maker. From an OEM perspective, this is best avoided.