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Apple unsettles auto industry tier-1 suppliers

16 Apr 2014  | Bruce Gain

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Apple's sneaky entrance to the automotive infotainment sector seems to have disturbed a hornet's nest, as the OEM giant begins to attract the attention of 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.

Apple's CarPlay

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 line-up. 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."

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