5 ms·

I dunno, a billion dollars a year (for 8 years) for CarPlay skunkworks seems like a bit much even for Apple..

by usefulcat 4y ago

xxpor 4y ago
When you have that much cash on hand, is it really?
- boringg 4y ago
  I mean how much of a return can carplay generate on an initial investment of 8 billion and on-going OPEX even if selling to all the manufacturers (which it isn't). I think the point is that it was unlikely their intention to be building solely for carplay and an actual car was a bonus. However if they wind down the hardware play of an actual car this could be something that soften those sunk costs.
  - 32995844 4y ago
    Imagine a world where the car manufacturers no longer deal with software development for the vehicle, but instead you have a licensing agreement with Apple where CarPlay is the interface. Similar to Volvo and Google and Android Automotive. A lot of car manufacturers are standardizing around Android in general (see Acura, Volvo, BMW). If Apple could get in with an A-series chip and a custom software stack, then that would probably be a decent amount of money through some hardware purchasing and software licensing. Look at how Cariad (the VAG stack) blew up schedules for upcoming Porsche and Audi models and early versions of it were laggy, missing features, OTA updates are slow/non-existant, etc. If Apple can get their foot in the door, it opens up new service opportunities for things like Apple Music alongside any licensing, which may be the bigger goal.
    - spockz 4y ago
      Given the thread on Volvo and polestar bemoaning all the issues with the new Android Auto versions, I’m not so eager to continue in that trend. Let the car companies do what they do best. Build an automotive grade car that does the car thing really well and leave the entertainment to the CarPlay. Getting hud and center driver console display driven by CarPlay would be awesome though.
      - bombcar 4y ago
        Looks like that might be coming in 2023 if the CarPlay site is any hint: https://www.apple.com/ios/carplay/ https://www.apple.com/ios/carplay/ >Next generation of CarPlay This next generation of CarPlay is the ultimate iPhone experience for the car. It provides content for all the driver’s screens including the instrument cluster, ensuring a cohesive design experience that is the very best of your car and your iPhone. Vehicle functions like radio and temperature controls are handled right from CarPlay. And personalization options ranging from widgets to selecting curated gauge cluster designs make it unique to the driver.
        spockz 4y ago
        Apparently CarPlay itself has had the ability to drive multiple displays for ages. It is the car vendors that haven’t utilised it.
    - Iwan-Zotow 4y ago
      and how they would differentiate between themselves? what would be left? colour of the seats? no new features until Apple decided it's a time
  - scarface74 4y ago
    If it convinced people to buy high margin iPhones a lot. Not to mention with the push into services, what’s the lifetime value of an iPhone customer.
  - a4isms 4y ago
    The five pillars of revenue are: 1. Selling a thing. 2. Selling add-ons and upgrades to a thing. 3. Selling other things to people who bought one of your things. 4. Preventing people who are subscribing to your thing from switching to somebody else's thing. 5. Preventing your competition from commoditizing things and driving prices down. (There aren't really just five, there is no one "theory of everything," it's just a literary device.) CarPlay is obviously #1 "Selling a thing," manufacturers license it. But it could also be #4 "Preventing people who are subscribing to your thing from switching to somebody else's thing." If automobiles all have their own proprietary interfaces or worse, Android Auto, people who drive cars may end up buying phones that integrate nicely with their cars and ditching their iPhones. If my conjecture is correct, Apple is investing in CarPlay to protect the most profitable product the world has ever seen.
    - NaOH 4y ago
      >But [CarPlay] could also be #4 "Preventing people who are subscribing to your thing from switching to somebody else's thing." The more reasons an existing user has to value something they already use, the harder it becomes for the user to switch. With few points of stickiness, it's easy for a user to check if an alternative has, say, similarities to features A and B. But if it's ABCDEFGHIJK, the likelihood of that user leaving drops dramatically. It's a common point that Apple does well iterating on its products, but that iteration goes beyond performance and capabilities into areas of stickiness.
madeofpalk 4y ago
Apple refuses to fund development of their own apps and platforms, yet sinks a billion into Carplay?
- a4isms 4y ago
  Something, something, "put the armour where the holes aren't." If you are selling a lot of phones and tablets and laptops with your apps and platforms as they are, you don't want to invest billions in making them better just to make your existing customers stop complaining. They bought your product anyways, clearly whatever they're complaining about wasn't a deal-breaker. You only want to invest in your own apps and platforms in areas where improvements would drive meaningful business outcomes. So you need to look at features that would cause someone who would otherwise buy a Samsung phone to buy an iPhone. Or you need to find people who didn't but an iPhone or iPad or AppleTV or OS X laptop and figure out if there is something that can be added to the product to get people to switch. In the case of a dominant player like Apple, those are hard to find in the mainline product. Big new sources of revenue are most likely to come from entirely new product areas (thus their investment in phones, watches, tablets, and set-top boxes) or from going down-market and making commodity products. They're allergic to cutting margins to the bone, so we're left with trying to find new markets, and that is why they invest so much in an automobile skunkworks while being much more careful about investing in the products that are already successful.
MDWolinski 4y ago
Let's take a look at it. I'm sure Apple is getting paid in some way for CarPlay integration. Now if the next generation has higher level of integration that car manufacturers use it instead of their own built software, there's certainly money flowing to Apple. So, let's say that Honda starts integrating it into their vehicles. In 2020, 1.3mm vehicles. Of course, initially, not every car Honda sells will have CarPlay installed, but a few years out, let's assume every vehicle does. If Apple got 2% of the selling price of the vehicle. Across all Honda models, the starting MSRP averages out to about $32,091. So, on average, Apple would get $641 per vehicle sold. Over the course of a year (if every vehicle sold with it), just from Honda, Apple would get $833mm. Add in a few more larger manufacturers and it's not a bad investment.
- lotsofpulp 4y ago
  https://www.macworld.com/article/233855/carplay-faq.html https://www.macworld.com/article/233855/carplay-faq.html > Whether it costs money to get CarPlay support in your car is up to its manufacturer. While Apple doesn’t charge automakers a fee for the necessary software to integrate CarPlay, there are some costs associated with meeting the necessary hardware requirements. The only reason an automaker does not include CarPlay is to try and keep their product from becoming a commodity. It was disappointing to see Toyota be stubborn and refuse CarPlay for so many years.
  - dmitriid 4y ago
    That, and greed. Looking at how many features car manufacturers keep behind absolutely meaningless arbitrary levels and packages, it's just ... argh

I dunno, a billion dollars a year (for 8 years) for CarPlay skunkworks seems like a bit much even for Apple..

xxpor 4y ago

When you have that much cash on hand, is it really?

boringg 4y ago
I mean how much of a return can carplay generate on an initial investment of 8 billion and on-going OPEX even if selling to all the manufacturers (which it isn't). I think the point is that it was unlikely their intention to be building solely for carplay and an actual car was a bonus. However if they wind down the hardware play of an actual car this could be something that soften those sunk costs.
- 32995844 4y ago
  Imagine a world where the car manufacturers no longer deal with software development for the vehicle, but instead you have a licensing agreement with Apple where CarPlay is the interface. Similar to Volvo and Google and Android Automotive. A lot of car manufacturers are standardizing around Android in general (see Acura, Volvo, BMW). If Apple could get in with an A-series chip and a custom software stack, then that would probably be a decent amount of money through some hardware purchasing and software licensing. Look at how Cariad (the VAG stack) blew up schedules for upcoming Porsche and Audi models and early versions of it were laggy, missing features, OTA updates are slow/non-existant, etc. If Apple can get their foot in the door, it opens up new service opportunities for things like Apple Music alongside any licensing, which may be the bigger goal.
  - spockz 4y ago
    Given the thread on Volvo and polestar bemoaning all the issues with the new Android Auto versions, I’m not so eager to continue in that trend. Let the car companies do what they do best. Build an automotive grade car that does the car thing really well and leave the entertainment to the CarPlay. Getting hud and center driver console display driven by CarPlay would be awesome though.
    - bombcar 4y ago
      Looks like that might be coming in 2023 if the CarPlay site is any hint: https://www.apple.com/ios/carplay/ https://www.apple.com/ios/carplay/ >Next generation of CarPlay This next generation of CarPlay is the ultimate iPhone experience for the car. It provides content for all the driver’s screens including the instrument cluster, ensuring a cohesive design experience that is the very best of your car and your iPhone. Vehicle functions like radio and temperature controls are handled right from CarPlay. And personalization options ranging from widgets to selecting curated gauge cluster designs make it unique to the driver.
      - spockz 4y ago
        Apparently CarPlay itself has had the ability to drive multiple displays for ages. It is the car vendors that haven’t utilised it.
  - Iwan-Zotow 4y ago
    and how they would differentiate between themselves? what would be left? colour of the seats? no new features until Apple decided it's a time
- scarface74 4y ago
  If it convinced people to buy high margin iPhones a lot. Not to mention with the push into services, what’s the lifetime value of an iPhone customer.
- a4isms 4y ago
  The five pillars of revenue are: 1. Selling a thing. 2. Selling add-ons and upgrades to a thing. 3. Selling other things to people who bought one of your things. 4. Preventing people who are subscribing to your thing from switching to somebody else's thing. 5. Preventing your competition from commoditizing things and driving prices down. (There aren't really just five, there is no one "theory of everything," it's just a literary device.) CarPlay is obviously #1 "Selling a thing," manufacturers license it. But it could also be #4 "Preventing people who are subscribing to your thing from switching to somebody else's thing." If automobiles all have their own proprietary interfaces or worse, Android Auto, people who drive cars may end up buying phones that integrate nicely with their cars and ditching their iPhones. If my conjecture is correct, Apple is investing in CarPlay to protect the most profitable product the world has ever seen.
  - NaOH 4y ago
    >But [CarPlay] could also be #4 "Preventing people who are subscribing to your thing from switching to somebody else's thing." The more reasons an existing user has to value something they already use, the harder it becomes for the user to switch. With few points of stickiness, it's easy for a user to check if an alternative has, say, similarities to features A and B. But if it's ABCDEFGHIJK, the likelihood of that user leaving drops dramatically. It's a common point that Apple does well iterating on its products, but that iteration goes beyond performance and capabilities into areas of stickiness.

madeofpalk 4y ago

Apple refuses to fund development of their own apps and platforms, yet sinks a billion into Carplay?

a4isms 4y ago
Something, something, "put the armour where the holes aren't." If you are selling a lot of phones and tablets and laptops with your apps and platforms as they are, you don't want to invest billions in making them better just to make your existing customers stop complaining. They bought your product anyways, clearly whatever they're complaining about wasn't a deal-breaker. You only want to invest in your own apps and platforms in areas where improvements would drive meaningful business outcomes. So you need to look at features that would cause someone who would otherwise buy a Samsung phone to buy an iPhone. Or you need to find people who didn't but an iPhone or iPad or AppleTV or OS X laptop and figure out if there is something that can be added to the product to get people to switch. In the case of a dominant player like Apple, those are hard to find in the mainline product. Big new sources of revenue are most likely to come from entirely new product areas (thus their investment in phones, watches, tablets, and set-top boxes) or from going down-market and making commodity products. They're allergic to cutting margins to the bone, so we're left with trying to find new markets, and that is why they invest so much in an automobile skunkworks while being much more careful about investing in the products that are already successful.

MDWolinski 4y ago

Let's take a look at it. I'm sure Apple is getting paid in some way for CarPlay integration. Now if the next generation has higher level of integration that car manufacturers use it instead of their own built software, there's certainly money flowing to Apple. So, let's say that Honda starts integrating it into their vehicles. In 2020, 1.3mm vehicles. Of course, initially, not every car Honda sells will have CarPlay installed, but a few years out, let's assume every vehicle does. If Apple got 2% of the selling price of the vehicle. Across all Honda models, the starting MSRP averages out to about $32,091. So, on average, Apple would get $641 per vehicle sold. Over the course of a year (if every vehicle sold with it), just from Honda, Apple would get $833mm. Add in a few more larger manufacturers and it's not a bad investment.

lotsofpulp 4y ago
https://www.macworld.com/article/233855/carplay-faq.html https://www.macworld.com/article/233855/carplay-faq.html > Whether it costs money to get CarPlay support in your car is up to its manufacturer. While Apple doesn’t charge automakers a fee for the necessary software to integrate CarPlay, there are some costs associated with meeting the necessary hardware requirements. The only reason an automaker does not include CarPlay is to try and keep their product from becoming a commodity. It was disappointing to see Toyota be stubborn and refuse CarPlay for so many years.
- dmitriid 4y ago
  That, and greed. Looking at how many features car manufacturers keep behind absolutely meaningless arbitrary levels and packages, it's just ... argh