- GM
- AAPL
- F
General Motors (GM) will reinstall Apple’s (AAPL) CarPlay and Android Auto in its vehicles after initially planning to remove the software from new cars.
Yahoo Finance Senior Autos Reporter Pras Subramanian explains the consumer reaction that led to this decision.
GM seems to be walking back its decision to phase out Apple CarPlay and Android Auto. Yahoo Finance’s Pras Subramanian has been tracking this story. All right, Pras, so explain this GM story for me. Apple and Android are out.
Now they’re back in. What changed?
So, this week, uh GM announced a new infotainment system, a new setup, uh, looks very nice, high-res, the dual screen setup there. Uh what people want.
But what they kind of snuck in there was, oh, here you can still you can now project Apple Carplay and Android Auto.
What is unsaid was they had actually taken it out. They had been slowly taking it out of their systems. And what I think is happening here is customers rebelled. Uh, and GM sort of needed to kind of get back in there.
You know, we’ve been seeing JD Power survey after JD Power survey talking about how the number one frustration with people with new cars was the infotainment system. So if people love Carplay and they’re they’re getting frustrated by these things, maybe you should give that back to them.
Well and was it was it just a sentiment thing or no, customers we really saw this. They were voting with their wallets.
I I have to imagine a big part of it was customer behavior, you know. So a couple years ago I I wrote about this and, you know, dealers at the time were telling the free press, Detroit free press, they’re warning about the fact that customers are going to walk away if they don’t have CarPlay. In fact, they cited some a stat that said 79% of new car buyers would only consider a vehicle that offered CarPlay.
Uh, and get this, 98% of cars have Carplay. So you’re telling me you’re going to take all that out. It’s one one of the things that people like. So I think that’s sort of what was already happening and they needed to really address that.
Why can I just say, why did GM want to take car play out in the first place? what was the there must have been a strategy here. What was it?
So the the outward reason was they thought it was too clunky to have to keep going back from CarPlay to the car’s uh individual system to kind of look at different features the car had, you know, native features, right?
But it really was about sort of we’ll get get into this. It’s it’s data and subscription money, basically. So that’s that’s why.
So if I’m a GM investor and I’m watching this now, how do I make sense of this? What’s the impact financially or strategically?
you know, cars are it’s a very highly competitive market marketplace. You know, when you bought a car, you looked at several different models, different brands. People do that all the time.
But if you’re an investor and the car company, what’s what’s appealing to you? High margin stuff like software, services, subscriptions.
This is what GM was wanting to do, right? They want, they knew their investors wanted to see that easy money.
But what’s happening is, you know, selling a car is the important part. Then you get to layer on a subscription. So, I think what happened was selling the car became a challenge.
So let’s end there. I mean, what is sort of like beyond GM, in your opinion, what’s the broader message for for auto makers?
I think, you know, from the infotainment point of view, you know, you want simplicity, you want ease of use, you and you want car play. People want, they like their their their their cell phones, their mobile phones, they want to have that functionality there uh in the car. But, you know,
uh Ford CEO Jim Farley was talking about how, quote, 70% of of our Ford customers are Apple customers, right? And why would I want to pick this fight if I don’t have to?
He’s talking about Josh Lipton. That’s what he’s talking about.
So, so that’s what I think is sort of what’s what what he that sort of encapsulates it.
You have a layup here, don’t take it away.
Wise words, Pras. Thank you, buddy. Appreciate it.
