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Apple unsettles auto industry tier-1 suppliers

16 Apr 2014  | Bruce Gain

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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 realise 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 recognised 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 of Apple purchasing electric carmaker Tesla. But while a merger is far from pending, the implications of Teslas becoming "iCars" are obvious. "If Apple ends up buying Tesla as rumoured, 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.

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