• GM dealers are concerned about the company's plans to discontinue Apple CarPlay and Android Auto compatibility as early as 2024.
A few months ago, General Motors dropped a bombshell when it announced that, as of 2024, it will stop offering compatibility with the Apple CarPlay and Android Auto applications.
Instead, new GM vehicles will come with an integrated system from Google offering a host of apps, including Spotify and Google Maps, of course. The system will debut with the 2024 Chevrolet Blazer EV 2024.
It's a risky bet. No sooner had the announcement been made that voices of protest arose. Two months later, some of that concern is coming from dealers. To sell vehicles, you need as many arguments as possible. With the loss of these applications, it becomes harder to convince buyers.
Several surveys have shown that the majority of motorists like using an app like Apple CarPlay or Android Auto when driving.
At the 2022 WWDC (Apple Worldwide Developers Conference), Apple declared that CarPlay was offered with 98 percent of new vehicles sold, and that 79 percent of buyers wanted their next vehicle to be compatible with CarPlay. Meanwhile, Consumer Reports magazine found in a recent survey that 57 percent of respondents were “very satisfied” with CarPlay, compared with 50 percent for the manufacturer's integrated system.
Against this backdrop, GM dealers are understandably very concerned. Several told the Detroit Free Press that they fear new buyers will turn to competitors who continue to offer CarPlay compatibility.
“CarPlay’s not broken. Why fix it?”, a knowledgeable source close to several GM dealers told the newspaper. "The risk of failure is very high.”
Earlier this year, GM CFO Paul Jacobson told Yahoo Finance that “If we're going to take that feature out of our vehicles, we need to respond with a program and a customer package that is equally as compelling, if not more compelling. We think with the partnership we have with Google, and ultimately with the vehicle data we have, we can create an experience that customers are going to love.”
Karl Brauer, a veteran analyst with iseecars.com, understands why GM has made the decision to abandon CarPlay, but believes it could prove costly. He believes the decision is motivated by greed; the new system will bring additional revenues through monthly subscriptions. In his view, if GM really believes Google's system will be superior to Apple's, why not continue to offer both. If Google's is superior, people will simply adopt it.
Analysts agree that GM is looking to amass its own data to better understand consumer habits, but also to increase profit margins. Last spring, the company said it wanted to achieve 20 percent margins on “new activities” by 2030. This obviously entails finding new revenue sources, including subscriptions to services that would be offered with the new multimedia interface.
During a recent visit to Detroit, a company representative told us that several services will be offered free of charge for a given period (three years), but that after that, it will be up to owners to subscribe to the services they want.
Tesla offers subscription-based services, Ford is looking to do the same, and we've seen BMW introduce subscription-based options, such as heated seats.
At Ford, however, CEO Jim Farley said he wouldn't get rid of the Apple CarPlay app, pointing out that 70 percent of Ford customers in the U.S. are also Apple customers. Why stop offering them a service they love? "It doesn't seem very customer-centric, and Apple does a really good job.”
The final word goes to Brauer of iseecars.com. He explains that when consumers don't immediately see the value of a subscription, or of having to pay for something that used to be free, the image of the fee-charging company takes a beating.
In this respect, GM is playing for big stakes, as are all the other companies that are going to use a similar strategy.