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GM is expecting $20-25 billion in annual subscription revenue by 2030. Dropping CarPlay and Android Auto will definitely lose them many sales. They are betting

GM is expecting $20-25 billion in annual subscription revenue by 2030. Dropping CarPlay and Android Auto will definitely lose them many sales. They are betting the lost sales will be less than the new subscription revenue.

deleted 4y ago
[deleted]
function_seven 4y ago
Yeah I think they’re fever dreaming at those recurring revenue projections. Ditching the phone integrations will have them selecting for buyers who don’t care about the Infotainment Experience (ugh), either because they just want the basics, or they can’t afford to be picky or whatever. Then they imagine that these buyers—who didn’t care enough about the big screen in the dash to include it in their buying decision—will pay hundreds of dollars each year to rent an off-brand version of those same features. Someone over there has fond memories of OnStar, and is desperate to relive their glory days.
- bigmattystyles 4y ago
  You say fever dream, I say business consultant getting paid big bucks to present and run focus groups for an idea that doesn’t pass the smell test. Seriously though, car company made infotainment systems are the biggest reason they shouldn’t be trusted with more life or death software like self driving. They’re all atrocious.
crote 4y ago
I genuinely wonder how they justify that figure. They could maybe justify a subscription if they offered a significant service, but they are by definition going to deliver a worse experience than CarPlay/Android Auto - simply due to it not being your own smartphone. Why would anyone buy an expensive car which is designed to last a decade while it has essential pre-installed features locked behind a subscription? If they want recurring revenue that badly, they should just lease it out.
- bombcar 4y ago
  They're going to turn what are currently add-ons/upgrades/options into subscriptions just like BWM or whoever it was did. No more $3k package to add heated seats, just upgrade OnStar to OnStarPrime+ for $49.95/mo!
- criddell 4y ago
  They mention subscription revenue but they don’t mention monetization of the data they collect. That’s probably at least half of it.
- vanilla_nut 4y ago
  The figure is utterly ridiculous. They truly expect to generate a revenue stream 2x the size of Spotify or AirPods? Apple as a whole only makes 21B a year from all services, and they run everything from cloud storage, to synchronization, to an App Store with a wild profit margin from fees. Of course, all American auto makers have wildly unrealistic plans for electric vehicle adoption in the next 5 years, too -- i think one of them is predicting $600B of revenue from EVs before 2030, when they currently only make a few million a year. Their finance departments must have some good drugs in the water coolers.
  - LeifCarrotson 4y ago
    What's more ludicrous is that they expect to generate a revenue stream 1/6th the size of their entire automotive enterprise. You'll pay $300/mo for a car payment, and $40/mo for OnStar Audio, and $10/mo will be earned from selling your data and showing ads on your nav system.
  - metaphor 4y ago
    > Apple as a whole only makes 21B a year from all services, and they run everything from cloud storage, to synchronization, to an App Store with a wild profit margin from fees. Correct on "wild profit margin", but your numbers are wrong according to FY22 10-K filing[1]: Services Revenue = $78.129B Services Cost of Sales = $22.075B Services Gross Margin = 71.7% ($56.054B) [1] https://www.sec.gov/Archives/edgar/data/320193/000032019322000108/aapl-20220924.htm#ief5efb7a728d4285b6b4af1e880101bc_79 https://www.sec.gov/Archives/edgar/data/320193/0000320193220...
AceJohnny2 4y ago
"expecting" We'll see how that pans out.
kotaKat 4y ago
GM is /forcing/ the revenue. GM previously attempted to force an additional upfront 3 year OnStar purchase on top of the vehicle purchase on some Buick/GMC/Cadillacs. They walked it mostly back, but they still rolled that stupid-ass idea out. https://www.thedrive.com/news/gm-makes-1500-onstar-subscription-mandatory-on-gmc-buick-cadillac-models https://www.thedrive.com/news/gm-makes-1500-onstar-subscript...
hamburglar 4y ago
This sounds a little like designing their cars to only work with a proprietary formulation of gasoline and “expecting” to automatically capture all the revenue that third party gas stations are making right now. Consumers aren’t stupid enough to think they should be paying subscription fees to GM for infotainment features when they have other, often free, options.
hedora 4y ago
No, you must be mistaken! Their spokesperson says all their cars come with 8 years of free service! Unless they’re lying to their customers revenue won’t stop ramping until 2032 or so. Presumably the SEC filings and investor facing statements they are making are in error instead. /s
asdfman123 4y ago
I’ve got an idea for GM cars: lock passengers inside after every trip unless they pay $5. Instant revenue. I can’t believe they haven’t considered this.

deleted 4y ago

[deleted]

function_seven 4y ago

Yeah I think they’re fever dreaming at those recurring revenue projections. Ditching the phone integrations will have them selecting for buyers who don’t care about the Infotainment Experience (ugh), either because they just want the basics, or they can’t afford to be picky or whatever. Then they imagine that these buyers—who didn’t care enough about the big screen in the dash to include it in their buying decision—will pay hundreds of dollars each year to rent an off-brand version of those same features. Someone over there has fond memories of OnStar, and is desperate to relive their glory days.

bigmattystyles 4y ago
You say fever dream, I say business consultant getting paid big bucks to present and run focus groups for an idea that doesn’t pass the smell test. Seriously though, car company made infotainment systems are the biggest reason they shouldn’t be trusted with more life or death software like self driving. They’re all atrocious.

crote 4y ago

I genuinely wonder how they justify that figure. They could maybe justify a subscription if they offered a significant service, but they are by definition going to deliver a worse experience than CarPlay/Android Auto - simply due to it not being your own smartphone. Why would anyone buy an expensive car which is designed to last a decade while it has essential pre-installed features locked behind a subscription? If they want recurring revenue that badly, they should just lease it out.

bombcar 4y ago
They're going to turn what are currently add-ons/upgrades/options into subscriptions just like BWM or whoever it was did. No more $3k package to add heated seats, just upgrade OnStar to OnStarPrime+ for $49.95/mo!
criddell 4y ago
They mention subscription revenue but they don’t mention monetization of the data they collect. That’s probably at least half of it.
vanilla_nut 4y ago
The figure is utterly ridiculous. They truly expect to generate a revenue stream 2x the size of Spotify or AirPods? Apple as a whole only makes 21B a year from all services, and they run everything from cloud storage, to synchronization, to an App Store with a wild profit margin from fees. Of course, all American auto makers have wildly unrealistic plans for electric vehicle adoption in the next 5 years, too -- i think one of them is predicting $600B of revenue from EVs before 2030, when they currently only make a few million a year. Their finance departments must have some good drugs in the water coolers.
- LeifCarrotson 4y ago
  What's more ludicrous is that they expect to generate a revenue stream 1/6th the size of their entire automotive enterprise. You'll pay $300/mo for a car payment, and $40/mo for OnStar Audio, and $10/mo will be earned from selling your data and showing ads on your nav system.
- metaphor 4y ago
  > Apple as a whole only makes 21B a year from all services, and they run everything from cloud storage, to synchronization, to an App Store with a wild profit margin from fees. Correct on "wild profit margin", but your numbers are wrong according to FY22 10-K filing[1]: Services Revenue = $78.129B Services Cost of Sales = $22.075B Services Gross Margin = 71.7% ($56.054B) [1] https://www.sec.gov/Archives/edgar/data/320193/000032019322000108/aapl-20220924.htm#ief5efb7a728d4285b6b4af1e880101bc_79 https://www.sec.gov/Archives/edgar/data/320193/0000320193220...

AceJohnny2 4y ago

"expecting" We'll see how that pans out.

kotaKat 4y ago

GM is /forcing/ the revenue. GM previously attempted to force an additional upfront 3 year OnStar purchase on top of the vehicle purchase on some Buick/GMC/Cadillacs. They walked it mostly back, but they still rolled that stupid-ass idea out. https://www.thedrive.com/news/gm-makes-1500-onstar-subscription-mandatory-on-gmc-buick-cadillac-models https://www.thedrive.com/news/gm-makes-1500-onstar-subscript...

hamburglar 4y ago

This sounds a little like designing their cars to only work with a proprietary formulation of gasoline and “expecting” to automatically capture all the revenue that third party gas stations are making right now. Consumers aren’t stupid enough to think they should be paying subscription fees to GM for infotainment features when they have other, often free, options.

hedora 4y ago

No, you must be mistaken! Their spokesperson says all their cars come with 8 years of free service! Unless they’re lying to their customers revenue won’t stop ramping until 2032 or so. Presumably the SEC filings and investor facing statements they are making are in error instead. /s

asdfman123 4y ago

I’ve got an idea for GM cars: lock passengers inside after every trip unless they pay $5. Instant revenue. I can’t believe they haven’t considered this.