Next-Generation Apple CarPlay: A Threat to Automakers?

During its Worldwide Developers Conference 2022, Apple announced the next generation of CarPlay, which aims to better connect with a car’s instrument panel and have a deeper integration with the vehicle itself.

Next-generation CarPlay users will be able to add trip information, control climate in the car, see the weather and view updated navigation information, fuel and battery levels, among other key systems and controls. CarPlay can adapt to different screen sizes and has an “all-new interface that is reminiscent of having an iPad on the center screen,” reported The Verge.

To add all the new features to the software, iPhones will communicate with vehicles’ real-time driving systems for the first time. This could mean a critical step by Apple to potentially power autonomous driving functions in the future and get deeper into the automotive sector. The tech giant already had plans to begin production of an in-house EV by 2024, as reported by Reuters.

Apple’s presenters at the conference showed a slide with the logos of over 10 automotive brands, including Ford, Mercedes-Benz, Audi and Porsche, as the tech giant is talking to several automakers to integrate the new generation of CarPlay in their vehicles. The new version will be announced in late 2023, said the company.

In-vehicle infotainment systems and digital dashboards have emerged as a new profit opportunity, with over-the-air updates and platform innovations that are contributing to change OEMs’ business models. Automakers are pushing to control the relationship with consumers in the more software-dominated car.

But OEMs “are wary” of Apple and other tech giants, reported Automotive News, as these companies could represent a threat to their businesses.

"There is no question this is a threat because the automakers, particularly as we transition to software-defined vehicles, realize they run a significant risk of losing whatever ability they have to interact with the consumer unless they get their act together," said to the media outlet Evangelos Simoudis, Founder and Managing Director, Synapse Partners.

However, automakers are also aware of the importance of entertainment systems for their customers. The 2021 J.D. Power Initial Quality Study showed that the largest complaint of new vehicle owners is the infotainment system and smartphone connectivity.

While the battle between automakers and tech giants unfolds, the reality is that there are signs that both sides are coming to terms. Amazon recently cut deals with OEMs to integrate its Alexa voice assistant in vehicles. Qualcomm Corp has signed chip deals with Volvo Group, Honda Motor and Renault. Google has agreements with General Motors, Volvo Cars and the Renault-Nissan Alliance to provide software for the next generation of systems.