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Why Apple’s bid to control your car is striking fear into manufacturers

Apple CarPlay - RZ_Images / Alamy Stock Photo
Apple CarPlay - RZ_Images / Alamy Stock Photo

One day, not too far in the future, your electric car glides off the slip road and joins the herd of commuting vehicles on the motorway.

You press a button and take your hands off the steering wheel, at which point the car takes control, accelerating and braking with the flow of traffic and steering around bends in the road.

Your attention turns to the gleaming touchscreen in the centre of the car.

With motorway driving now fully autonomous, you can divert your attention away from the road and play a video game, catch up on the news or turn on Netflix.

A few years ago, the car’s centre console was little more than a digital clock; today it has become a giant command centre.

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The Tesla Model X boasts a 17-inch screen; other manufacturers have even bigger displays sprawling across the front of the vehicle.

The question of who controls that screen has spawned a simmering conflict between carmakers and tech companies that threatens to snowball into a war for control of the future of the car.

Manufacturers now fear that Apple will use the popularity of the iPhone as a Trojan horse to seize control of the relationship between motorist and car, and relegate manufacturers to an afterthought.

In 2014 Apple released CarPlay, a way for iPhone users to access certain apps such as Spotify, Apple Maps, and the Siri voice assistant while driving.

More than a dozen manufacturers raced to sign up, keen to associate themselves with a cutting-edge tech company and take advantage of the touchscreens that were becoming increasingly cheap to stuff into vehicles.

The software was a near-instant hit. Consumers embraced the familiarity of iPhone apps in their cars.

In comparison, vehicle manufacturers’ own software had always been something of an afterthought, loaded with outdated offline maps and requiring users to navigate a laborious string of menus to connect phones to hands free systems.

Google followed a year later with Android Auto, which offered a similar experience for Android phones.

Since then, the software has become an expectation, rather than a bonus.

With the exception of a handful of holdouts all major car manufacturers adopted CarPlay and Android Auto.

BMW was forced to backtrack on plans to charge an annual fee for it after protests from motorists.

BMW I4 screen - Christopher Pledger
BMW I4 screen - Christopher Pledger

Last year, Apple said that 98pc of cars sold in the US offer CarPlay, and that 79pc of buyers would only consider a car if it supported the software.

Carmakers continue to sign up: Apple says more than 800 cars support the software, compared to the 600 it quoted last year.

Last year, Apple unveiled a massive upgrade of the software, which will not just act as an entertainment hub but handle central functions of the vehicle such as air conditioning, the fuel gauge and the speedometer.

The first vehicles supporting the new version are due to be announced later this year.

Richard Windsor, an independent technology analyst, says this will have terrified car executives.

While today’s CarPlay system is relatively simple, mirroring the iPhone’s features on a single screen, the upcoming version is a far more ambitious takeover of the car that could be a path to Apple selling hardware to car manufacturers.

“It makes no sense whatsoever for Apple to sell a car,” Windsor says. “Apple makes 40-50pc gross margins on the products it sells, and it will not make that on seats and steering wheels. But it does make sense for Apple to sell an infotainment unit.”

Windsor says carmakers could end up becoming the equivalent of phone networks after Apple entered the mobile market, which led consumers to focus on handsets and led the operators to become commoditised.

Tim Cook CEO of Apple - REUTERS/Stephen Lam
Tim Cook CEO of Apple - REUTERS/Stephen Lam

“That's why it is so dangerous for the [manufacturers] because it moves them along that road towards being basically mobile smartphones on wheels.”

Michael Dunne of ZoZo Go, an automotive advisory business, says this comes closer to the nightmare scenario that Dieter Zetsche, the former Mercedes boss, warned of in 2015 when he said the carmaker must not become the “Foxconn of Apple”, referring to the Taiwanese company that assembles iPhones on Apple’s behalf.

“[At that point], where’s the brand? What's the value in the car? That's the risk, that they become irrelevant,” says Dunne.

“Why do people buy cars? Not that long ago, it was for performance and handling and braking, acceleration, and design. But increasingly, people are basing their decisions on the joy they derive from interacting with a car.”

Major manufacturers are now trying to go their own way.

Tesla, which has invested heavily in its own system instead of embracing CarPlay, has served as an inspiration to manufacturers seeking to distance themselves from Apple.

Last month, General Motors said it would not offer the software in its upcoming electric vehicles, instead working with Google to include systems such as the search giant’s maps in its built-in software.

Mercedes has also unveiled plans to integrate Google into its cars.

Roger Lanctot, the director of automotive connected mobility at Strategy Analytics, says more are likely to follow GM.

“Car makers and their suppliers cannot stand Apple. While Google is challenging to do business with, Apple is unbearable and inflexible. Car makers simply can’t stand doing business with the company and suppliers agree,” he says.

“Car makers are gambling that a Google-centric connected in-dash system will be far more compelling than anything Apple might be cooking up. No doubt Apple will tell car companies that they have no choice but to adopt the new CarPlay – that their customers will scream for it. The bottom line is that Apple will deliver a non-negotiable proposition – which automakers are increasingly inclined to walk away from.”

Dunne says that carmakers are hiring thousands of software developers in an attempt to match Apple and Google, but that “it has never been their strong suit”.

The elephant in the room is the perennial threat that Apple will make its own car.

Tim Cook has spent years toying with the idea and explored manufacturing opportunities with the likes of Nissan and Hyundai.

So far, nothing has come of the idea.

But Apple might not need to make a car to strike fear into manufacturers.