Apple tends to penetrate markets in a big way, so after quietly entering the car infotainment sector this year, the OEM giant is beginning to attract a lot of attention in the automotive world -- particularly from tier-1 suppliers that could directly compete against Apple. In the immediate future, CarPlay, Apple's iOS for automotive infotainment, will begin to show up in cars. So far, Ferrari, Honda, Hyundai, Jaguar, Mercedes-Benz, and Volvo plan to offer Apple's CarPlay as an option in 2014. Other major carmakers are expected to follow their lead. The interface will eventually be available in 25 million cars by 2020, according to IHS Automotive.
On a consumer level, this means users will be able to sync their iPhones with their dashboards in cars that offer CarPlay. The dashboard displays the CarPlay iOS interface, allowing users to check email, texts, Facebook, and other things; run the iPhone navigation app; and stream music from their iPhones with a dashboard touchscreen.
Carmakers will offer CarPlay as an option that users can select among other smartphone interfaces. At least initially, carmakers will hesitate to lock out customers who have Android or other non-Apple smartphones. They will thus continue to offer other infotainment options in their models that can work with Nokia, Android, and Sony smartphones, as well as with iPhones.
Volvo's XC90, which was one of the first models to debut CarPlay in March, accommodates Android phones as well as iPhone devices, for example:
On the software front, the Android OS will serve as the main competing alternative to CarPlay. Google is also backing the Open Automotive Alliance (OAA) and the consortium's development of an Android-based infotainment platform with input from Audi, General Motors, Honda, Hyundai, and Nvidia.
But Apple is likely thinking in bigger terms than just offering CarPlay as an alternative software interface for dashboard infotainment in cars. While Google's Android for car applications are limited to software, Apple has a successful history of OEM design experience to offer carmakers, in addition to its iOS.
Essentially, Apple could eventually offer embedded systems for car dashboards to its PC, iPhone, and iPad product lineup. Continental, Harman, and Delphi have also expressed concern about Apple's plans, Frost & Sullivan says.
"Given Apple's user interface popularity of its iOS, its hardware appeal, and its massive app developer ecosystem, Apple could play a huge role in disrupting the tier-1 value chain in the medium term," Praveen Chandrasekar, an analyst with Frost & Sullivan's automotive and transportation division, told EBN during an interview. "Apple could end up being a one-stop provider to vehicle OEMs."
However, Apple's history as an OEM could work against it in the car sector, he said. "Apple's notorious image of controlling its complete ecosystem will not go well in the auto space where OEMs traditionally control everything."
He also insists that Apple has not begun to offer embedded OEM systems for car dashboards. He noted that the version of CarPlay available now is designed to work with Continental, Harman, and Delphi infotainment hardware.
However, the concern among tier-1 suppliers is "how far Apple will go in this market," Chandrasekar said. "We have to realize Continental, Harman, and Delphi don't have native expertise in software, apps, etc. for which Apple can play a huge role," he continued. "Apple has proven its mettle with the iOS iterations of its user-interface design over the years. Also, Apple has a massive developer ecosystem that is already developing apps for iOS platforms, which is another added advantage. All of this definitely concerns traditional tier-1s."
Apple has not commented on whether or not it will one day enter the embedded systems space for cars. However, there are signs that Apple is looking at the hardware design side of car infotainment:
- Apple holds two patents for embedded car applications. One is for a touchscreen cockpit design and the other is for a car communications device for emergency road services. "[This shows] that it could eventually progress to a broader hardware and software integrated solution for the connected car space," Chandrasekar said.
- Apple became one of the world's most recognized brands by offering very unique software and hardware designs and what many consider to be a superior user experience that competing products did not offer. "Hardware is an area in which Apple prides itself," he said. "We believe this will extend to the car market as well."
There has also been much speculation about the possibility Apple purchasing electric car maker Tesla. But while a merger is far from pending, the implications of Teslas becoming "iCars" are obvious. "If Apple ends up buying Tesla as rumored, then Apple will end up becoming a true system integrator in the connected car space," Chandrasekar said.
Consumers will have a first look at what it is like using their iPhones with a touchscreen console in the dashboards of their cars during the coming months. Their reactions could serve as a market test before carmakers one day make the jump and offer "iCar" versions of their future models. Those involved in the infotainment and telematics supply chain will likely be watching very carefully.