Join the club, or go it alone?
General Motors surprised everyone I think last week with the announcement that they were axing Apple CarPlay on their electric vehicles from 2025. For a number of years including CarPlay and Android Auto connectivity in a car has been seen by manufacturers as something over which they have no choice given the dominance of Apple and Android smart phones with their customers. For some budget manufacturers like Dacia the opportunity to provide navigation, music and a whole range of other services through the customer smartphone has been an easy option, whilst at the top end of the market manufacturers up to Ferrari have recognised that for their customers this is an absolute requirement.
From the manufacturers point of view there are two issues. The first is that they have to pay a licence fee on every car to include the CarPlay and Android functionality with the likelihood that only one of those will actually be used by the customer. When every cent in the cost of the car is under huge scrutiny by engineering and purchasing, this is hugely frustrating. The second and more significant concern is that when the customer purchases any services such as music streaming, parking or recommendations for a nearby restaurant, they will do so through their smartphone and any commissions that are paid by those service providers will go to the app developers who in turn are paying fees to Apple or Google.
The reality is that few of these customer purchases are uniquely made whilst in the car and even those that might generally be made in a car might not be made only in that specific car but also in another car available in the household or a daily rental car whilst travelling. We all have our favourite parking app and we do not want to be forced into setting up multiple accounts in each brand of car that we might drive or be locked into an app provided by the car manufacturer rather than one that we have chosen on the basis of functionality and ease of use. Given the chequered history of car manufacturers and software development, even if they rely on third party developers in the same way as the App Store, I personally would have little confidence that GM or other OEMs will manage that process as slickly as Apple and if I was a developer, I would take some convincing to add the GM channel to my offer.
Chinese consumers are arguably amongst the most digitally sophisticated in the world, and in response to that, Chinese manufacturers have provided features that engage a digital consumer to a greater extent than the established OEM brands. This includes larger displays and sophisticated voice recognition capabilities. Only a few weeks before the GM announcement, Geely announced that they were joining other Chinese OEMs in partnering with Baidu, one of the largest tech businesses in China, to include a Chat-GPT style chatbot in their cars. Over time, this may displace Apple CarPlay and Android Auto, partially due to regulatory restrictions on these US-domiciled companies, but the OEMs recognise that for their consumers smartphone connectivity is mandatory as they live their lives largely through their smartphones, and that others are better positioned to provide this functionality
Whilst I'm sure that it offends the sensitivities of car designers that they're not in control of the imagery and presentation of information presented on displays which now form such a prominent part over the car interior, they need to recognise and accept that in this area function rather than form must dominate. Perhaps in some future iteration of these interfaces it will be possible to present your smartphone functionality through CarPlay or Android Auto in a BMW or Kia style, but I feel that for many consumers their preference will still be to have their app icons presented in the way they have chosen to set it up on their smartphone and have learned to use intuitively.
Manufacturers need to be realistic about their role and opportunities in the infotainment space. I have seen no evidence that the fanciful numbers around potential market size for digital services that can be accessed by car manufacturers in the coming years have any solid basis in fact. Like the supposed opportunities for fully autonomous cars and a total shift from ownership to mobility services, they are consulting hype. How manufacturers will benefit from digital opportunities is by creating the best user interface in the market, that will provide access to our smartphones but also allow easier control of vehicle functions, and the potential to add or enhance functions on the car itself. Apple and Google have both looked at producing their own cars, finally deciding they were better sticking to what they knew. Car manufacturers should learn from that and not spread their limited software experience even more thinly.
Image: Automotive News