Apple’s new CarPlay interface was originally designed to fend off Android, but now it’s Apple’s last hope to be a player in the automotive industry.

Bloomberg's Mark Gurman states that "When Apple Inc. started working on revamped CarPlay software about four years ago, it saw the system as a way to beat back Android’s growing expansion into vehicles. Now that Apple has shelved plans for its own car, CarPlay has arguably taken on even more importance to stay relevant in the auto industry.

The concept for the new CarPlay, known as Project IronHeart within Apple, was to take the system to the next level by fully integrating it into vehicles. It would take over more screens and a car’s instrument cluster, as well as features like the radio and air conditioning system. That’s a big change from the current CarPlay interface, which is more focused on letting you operate Apple services and doesn’t handle most of a car’s controls.

When Apple decided to revamp CarPlay, it was worried about Android. The Google operating system had started off in cars with a CarPlay-like feature called Android Auto. It lets users plug their phone in and get a smartphone-style interface for music, podcasts, voice control and maps.

But a few years after both Android Auto and CarPlay hit the market, Google took a major leap by introducing Android Automotive. Though this software doesn’t look radically different than Android Auto, it’s installed in the car itself. That means it’s an integrated system that can take over a vehicle’s screens and gauges without the need to connect a phone.

Over the past few years, this approach has swept the car world. Polestar, Porsche, BMW, Volkswagen, Ford, Lucid, Stellantis and General Motors now offer cars with the Android operating system built-in. After just seven years, Android Automotive is the market leader — with an estimated 35% of the car operating system market.

The new CarPlay is a response to that. Apple hopes it can win over users and automakers with a slicker interface and greater customization. There is one big difference, though: The new CarPlay still runs on the iPhone and isn’t a new OS embedded in the vehicle.

Now, Apple explored turning the new CarPlay into a full operating system that runs on cars directly. But the approach would have worked best with Apple-designed chips and other proprietary technologies, like displays. It wasn’t seen as practical to install that in cars.

So Apple moved ahead instead with the new CarPlay, which was announced in June 2022 and launches this year. So far, only Porsche and Aston Martin have announced formal support. One reason for the slow rollout is that Apple’s design team has to work with carmakers to create a bespoke interface and style for each model. Even without a fully integrated approach, the new CarPlay still needs to be customized.

This limited rollout also has focused on very high-end cars. In fact, the only model confirmed to be getting the new CarPlay is the Aston Martin DB12, which costs roughly $245,000 and up. (Porsche hasn’t said which model is getting the feature.) That doesn’t give the impression that the new CarPlay is about to take over the auto industry."

On top of that, Gurman is told that "Apple has no plan in place to make money from the new software. As with the current version of CarPlay, the company isn’t looking to charge users for it — or force car manufacturers to pay to install it.

But the cancellation of Apple’s car may provide an opportunity to rethink this policy. The company has to figure out how to rev up CarPlay’s expansion and turn it into a moneymaker, or it risks ceding the entire auto industry to rivals.

Apple has a few options here:

To start, it could begin charging automakers to support CarPlay. Both Apple and the carmakers know there are diehards who won’t consider buying a vehicle if it doesn’t offer the feature.

The company could keep the old CarPlay around as a free feature and then sell the new one as an upgraded version. Let’s call it CarPlay+. It would be a similar strategy to the paid tiers of things like Apple TV and News.

Apple could then drop the approach of making a customized design for each carmaker. Instead, it could provide a slew of templates in the operating system and let users customize the look of CarPlay on their own. The new CarPlay already offers some customization. Leaning further into that could let Apple save the time and trouble of making the bespoke versions.

The clock is ticking. If Apple doesn’t quickly get more automakers to adopt the new CarPlay, it will certainly lose ground to Android. And if the company doesn’t start making money from the software, it will never turn the auto category into a lucrative market.

It’s not like Apple has a fallback plan. The new CarPlay was once seen as the first step toward an eventual Apple vehicle. Now it’s all the company has left.

Mark Gurman's Power On Newsletter goes on to talk about Apple suppliers gearing up for the biggest AirPods launch to date and that the U.S. Department of Justice is preparing to sue Apple and more.

Intel’s Software-Defined Vehicle Delivers Efficiency and Performance

While Google is leading Apple in the auto industry, Intel just entered this sector this week in a big way. Their website states "Using Intel’s market-leading silicon-enforced virtualization capabilities, Intel Automotive offers the industry the most performant and efficient approach to architecting a software-defined vehicle (SDV) – one that delivers 99% efficiency and zero latency. Consumer expectations for high quality and personalized experiences demand this performant compute platform with space for multiple software workloads."

It further notes that "Virtualization is the key to unlocking the next-gen experiences that consumers crave. With it, drivers and passengers will experience a much more responsive vehicle. Think higher frame-rate performance during game play, the beauty of 3D map applications instead of 2D, real-time 3D visualizations across multiple displays within the vehicle, or enhanced safety with real-time AI inferencing."

For more, check out Intel's full press release relating to their plan for the software-defined vehicle. On paper, it would seem that Intel's move to enter this sector could be another headache for Apple's next-gen CarPlay team.