Apple's next major market for iOS may be automotive
Automotive looking a lot like smartphones before the iPhone
While most of the attention of pundits has focused on an imagined, potential TV market, Apple has openly pursued parallel efforts in the automotive industry, which today is very similar to the smartphone market prior to the launch of iPhone, much more so than HDTVs currently are.
"Smart" automotive products, ranging from car audio, maps and navigation to voice-based search and information systems, are not new. But like smartphones in 2006, smart car systems are generally perceived as expensive luxury items, often don't always work exceptionally well, and generally provide lackluster user interfaces.
Another similarity to the 2006 smartphone market: the car navigation system market is dominated by Nokia (with a small position held by Microsoft's WinCE-based Auto PC platform), while sales of the actual systems are tightly controlled by car makers themselves, just like the mobile carriers once owned the distribution and branding of phones.
Apple's iPod integration
Apple's origins in working with car industry also parallel its steps toward smartphones and iPod home theater. Initially, the company only offered ways to integrate its iPod with other vendor's devices, as Apple did for both with iTunes and its Bluetooth iSync data integration for various mobile phone models and PDAs like the Palm Pilot.
Beyond offering simple analog output, Apple began offering a rudimentary serial data interface for iPod. While early iPod models included a wired remote that used a ring of additional contacts surrounding the headphone jack, the third generation model introduced a special four pin serial interface next to the headphone jack. It also added the 30-pin Dock Connector, which supplied USB in addition to the 4 pins of simple serial lines for iPod remote functions.
Apple experimented with evolving serial control systems that enabled connected devices (such as a car stereo) to send basic signals to an iPod to start and stop playback, and eventually enter a playback mode where an external system (a dock accessory or a vehicle) could search, navigate and display track information on playing tracks, launch voice recording and perform other features.
Simple external playback controls were initially called the iPod Accessory Protocol. As features evolved, Apple added support for shuffle playback, depicting artist and title information, navigating songs within a playlist, and even showing album art under a system called AiR (Advanced iPod Remote). Apple has kept connectivity with remote devices as confidential as possible within its "Made for iPad" licensing program.
iPod integration in automotive
Within just a few years, economies of scale related to the volume of Apple's iPod sales and interest in iPod integration helped support a move from cheap, simple serial remote control to full support for the more complex and expensive USB. A parallel increase in the sophistication of automotive design also resulted in a dramatic expansion of support for built-in USB (or at least optional upgrades).
In 2004, Apple launched a program with BMW to provide USB iPod integration in its BMW and Mini vehicles, followed by a 2005 announcement of partnerships with Mercedes-Benz, Volvo, Nissan, Alfa Romeo and Ferrari.
This integration ranged from using FM transmitters to play audio out through the car's radio to full USB integration with steering wheel controls and instrument cluster displays, which completely took over control of a connected iPod.
At the time, Apples senior vice president of Worldwide Product Marketing Philip Schiller stated, almost every car company in the world is working to integrate iPod into their cars in 2005. iPod customers want to take their entire music collection with them everywhere they go, including their car, so were excited to be able to work with so many leading automotive companies to provide customers with integrated solutions.
In 2007, Apple launched the new iPhone and iPod touch with support for similar iPod integration. It also began adding Bluetooth wireless connectivity, which allowed vehicles to control audio playback options without taking over control of the iPod (as USB iPod integration did), while also adding call integration. This year, Apple also added Bluetooth integration on its new iPod nano.