Net neutrality for cars: BMW's Apple CarPlay subscription could open Pandora's box Page 2

January 26, 2018

BMW's wireless Apple CarPlay integration

BMW drivers may not notice much of a difference, though. As Bird points out, BMW has a significantly higher lease rate than mainstream brands.

“The majority of their customers shouldn’t even notice” the difference between a $300 initial charge and $80 a year over the three- or four-year lease, Bird said.

And it’s not Apple levying the charge for the CarPlay software and the Made for iPhone hardware compatibility program, which the software giant provides for free to automakers to install in their vehicles. For Apple, it’s a perk that might sell more iPhones. For carmakers, it’s a feature that might sell more cars. Any per-unit cost is typically baked into an upgraded infotainment screen, rather than as a line-item option.

Apple does gain access to a stream of user information, big data it can use to sell other services and to fuel its own product development.

Automakers do the same for app integration for services like Pandora and Spotify, which feature a paywall for more advanced functions.

That’s in marked contrast to, say, a SiriusXM satellite radio subscription. Automakers install antennas and then customers can activate a trial subscription subsidized by SiriusXM. After that point, it’s up to SiriusXM to retain vehicle owners. Even with the proliferation of streaming music apps, SiriusXM counts about 30 million active subscribers.

For BMW, it could be the beginning of a new way to make money off its cars worldwide, while it lets Apple siphon user data from its cars. Then again, it could simply be a way for some BMW shoppers to cross the brand off their list.

“BMW would have to make the experience premium in some way [to charge for a CarPlay subscription],” Haas said. “Maybe a tie-in with Apple, like discounts on their products.”

Next year, his commute might be in a different car.

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