At last, car fanatics can concentrate on driving while seamlessly operating their iPhones — thanks to Apple (NASDAQ:AAPL)'s long-awaited in-car infotainment application CarPlay. CarPlay is indeed the road to enter the automobile industry for this technology giant, although it has to share the market with existing giants like Microsoft (NASDAQ:MSFT) and BlackBerry (NASDAQ:BBRY) and Google (NASDAQ:GOOG) which is expected to enter this space shortly. Let’s find out what CarPlay has to offer.
What Is CarPlay Offering?
Apple CarPlay is a car infotainment system that can be connected with an iPhone. It would enable the driver to operate the iPhone easily with icons and contents displayed on the car’s dashboard. The application will allow making calls, receiving/sending messages, accessing maps to get directions, and playing music. Most interestingly, using the iPhone would need no manual intervention — the "Siri" voice command application would be your friend. This means absolute hands-free control over your iPhones.
- Warning! GuruFocus has detected 7 Warning Signs with AAPL. Click here to check it out.
- AAPL 15-Year Financial Data
- The intrinsic value of AAPL
- Peter Lynch Chart of AAPL
Although the iPhone users could cheer on this development, only the owners of the latest iPhone versions (5, 5c and 5s) will be benefited. Other than Apple’s apps, the CarPlay can be connected to android-based devices and other third-party apps, which means wide acceptability.
Alliances with Global Automakers
Fiat (FIATY)’s Ferrari brand, Volvo, Mercedes-Benz, Honda (NYSE:HMC) and Hyundai are among the early movers to integrate the Carplay in their models. The list is even longer for the automakers who have already committed to deploy Apple’s infotainment system. It includes Toyota (NYSE:TM), BMW, Chevrolet, Ford (F), Jaguar, KIA, Land Rover, Mitsubishi, Nissan, Opel, Subaru and many more.
Demand for cars is growing around the world and carmakers are spending billions to boost capacity and add new models. Moreover, automakers are keen on deploying advanced in-car infotainment systems to attract car buyers. According to research firm Researchmoz.us, global automotive infotainment market revenue grew 4.2% year over year to $30.1 billion in 2013. Although the firm thinks the lag in the European auto market to be a concern, it expects the global infotainment market to generate about $45.6 billion in 2016. Now this seems to be a great opportunity for the automakers, and suppliers of infotainment products and software.
With the opportunity being vast, Apple seems to have the right thing in the right place at the right time. There’s no doubting the fact that association with the leading auto giants would boost order rates for the CarPlay.
However, Apple will not be the only beneficiary of this colossal prospect as Google is also pouncing to grab a share. Google joined carmakers like Honda, Hyundai, Audi, General Motors (NYSE:GM) and chip-making company NVIDIA to bring its android platform to the cars for better, safer and intuitive driving experience.
Will CarPlay Offer a Safer Drive?
Apple’s CarPlay promises a safer use of iPhones while driving, but there are some criticisms as well. Studies have shown that mobile usage while driving causes distraction that leads to fatal accidents. That’s the reason that use of phones is strictly banned in some states, although there are no such restrictions for hands-free devices. However, researchers from the University of Utah and Texas A&M Transportation Institute feel that use of hands-free devices is slightly less risky than those of hand-held mobile phones. Communication through hands-free mode wouldn’t take a driver’s eyes off road, but certainly distract the mind.
Carmakers are working to develop a system that pulls the brake automatically in case of distraction. Also, much attention is being given on developing a vehicle-to-vehicle technology (backed by the federal government) to reduce cases of car crashes.
While the smartphone market is maturing and getting saturated with several players offering low cost handsets, it’s a wise move on Apple’s part to work on building another business line. The Cupertino giant’s foray into the auto market looks quite justifiable with the kind of potential that can be seen in domestic and emerging markets. Apple has been on the forefront of technological inventions, and CarPlay is just another feather in its cap.