Get the Lowest Prices anywhere on Macs, iPads and Apple Watches: Apple Price Guides updated March 23rd


Apple's next major market for iOS may be automotive

Car integration to wholesale replacement

In 2010, Apple added "iPod Out" as a feature of iOS 4, enabling second generation or later iOS devices to present Apple's classic iPod interface on a vehicle's display (as opposed to leaving the playback controls up to car manufacturers).

Again, BMW was an early partner of the feature, which hoped to replace the non-standard, often oddball interface presented by various car makers with the recognizable, consistent interface of the classic iPod.

Eyes Free

By that point however, the success of the iPhone and iPod touch were replacing more basic iPods, so presenting the simple "classic iPod" as the only interface for vehicle playback ended up a short-lived objective. BMW subsequently launched even closer integration with iOS via its "BMW apps," a way for third parties to create car apps that could interact with features of iOS apps, including Facebook and Twitter, as well as iOS apps that connected Apple's devices with the car, something various car makers have done.

While BMW worked to integrate its iDrive car entertainment and navigation system with Apple's iPod and iOS devices, Apple delivered the iPad as its own big screen device capable of running more sophisticated apps in 2010. In parallel, Apple had been working on its own in-house mapping and navigation system in partnership with TomTom's Tele Atlas maps, as well as Siri, its voice assistant service released in 2011.

Rather than just offering iPod integration with a vehicle's entertainment system, Apple was now suddenly in a position to offer a vehicle's entire entertainment system with the release of Siri-integrated Maps in iOS 6 this summer.

Existing players in auto navigation systems

Apple is now set to begin muscling into a space Nokia has dominated since its acquisition of mapping company Navteq in 2007. Last year, Nokia further integrated and consolidated Navteq's formerly independent subsidiary operations into Nokia Location & Commerce.

But while Nokia's Navteq has signed up partnerships with a wide variety of car makers to license its Navteq maps for their navigation systems, Nokia's primary business in mobile phones began actively collapsing with the rapid shift toward smartphones, a factor Apple's iPhone had accelerated.

By 2011, Nokia was in such bad shape that the company announced a partnership with Microsoft to begin delivering Windows Phone devices. However, the failure of Windows Phone over the past two years has contributed to billion dollar losses at Nokia and the company's rapidly diminishing control over markets it once decisively held, leaving its mapping offerings very vulnerable just as Apple threatens to enter the market.

Microsoft's own Auto PC product (originally based on Windows CE and recently ported to the standard embedded version of Windows) has seen minimal adoption outside of a partnership with Ford branded as "Sync." Microsoft's automotive system provides phone and music integration with voice-based navigation and directions.

Eyes Free Siri

Alongside the introduction of iOS 6 at this summer's Worldwide Developers Conference, Apple also announced a new initiative it named "Eyes Free," ostensibly a way for car makers to further integrate iOS into their vehicles. The company listed familiar partners: BMW, General Motors, Land Rover, Jaguar, Audi, Toyota, Mercedes-Benz, Honda and Chrysler.

Eyes Free

Eyes Free was demonstrated by Scott Forstall as a standard steering wheel button that invoked Siri running on an integrated iOS device, enabling drivers to perform voice assistant functions without even looking at a screen.

Eyes Free

BMW's own in-house iDrive system, like similar systems developed by other car makers, presents navigation and entertainment options that are driven with a hand-operated dial control and shown on a vehicle's built-in screen. While it offers some voice-based system navigation, it relies upon simple phrases that must be issued in specific ways.

Apple's Siri, in contrast, is designed to respond to natural language questions and can adapt to questions or directives worded in various ways.

Eyes Free

One issue for Siri is that it requires sophisticated noise reduction and audio processing to understand the speaker; on an iOS device, this is enhanced by multiple mics. In a car, road noise and a much greater distance between the driver and the device are a problem, but the Eyes Free program reportedly solves the problem (Apple isn't publicly articulating what this involves).

The company's Siri web page only says it is "working with car manufacturers to integrate Siri into select voice control systems," and notes, "to minimize distractions even more, your iOS device’s screen won’t light up. With the Eyes Free feature, ask Siri to call people, select and play music, hear and compose text messages, use Maps and get directions, read your notifications, find calendar information, add reminders, and more."

If Apple can convince as many vehicle makers to adopt Eyes Free as it has signed up to provide iPod integration, this will give the company a way to replace expensive vehicle entertainment and navigation systems with an alternative they're already familiar with: their iOS device.

If BMW and other major car makers hadn't already signed up for Eyes Free, it might be hard to understand why they'd be willing to risk the cannibalization of their own in-house vehicle entertainment systems, which typically include an iPod-like hard drive for music storage, an iPad like display, and maps with search and navigation. At the same time, car makers might be willing to delegate platform and software development to Apple because that's what their customers have been demanding.

Eyes Free is very simple: it essentially puts a Home button on a vehicle's steering wheel, so users can interact with iOS's Siri the same way they already can with their iPhone or iPad. The rest of the package includes basic Bluetooth integration for audio playback and phone calls. Realistically, car makers could still include the hardware they're already selling, but users would just interact with Siri most of the time rather than using the car's own hand-based menu navigation.

Eyes Free turns a blind eye to ads

Once users grow accustomed to using Siri for everything, however, the display screen and mapping systems sold by Nokia and Microsoft to car makers might go down the same path as modular car stereo systems, the market for which virtually collapsed as Apple's iPod became the preferred way to play music and podcasts.

This suggests Apple may expand the features of its iOS devices to make them more complete replacements for car entertainment systems (such as adding support for FM radio, for example, something that is already available in most 3G-capable iOS devices, but lying dormant in the devices' baseband chip). At the same time, it helps explain Apple's strategy for both Siri and Maps.

While observers are fixated with dramatizing a showdown between Google's free maps and Apple's new Maps service in iOS 6, it appears that Apple's real target isn't Google but rather Nokia's licensing fees for Navteq vehicle navigation systems. By enhancing Siri's capabilities, particularly in search, maps routing and voice-based calendar, tasks and messaging, Apple will be able to sell more differentiated hardware, and license those capabilities to car makers as an integration feature for car buyers.

Google, in contrast, will have a harder time duplicating Apple's Siri features (despite having a lead in maps and voice-based services) because it relies on advertising, something that's hard to monetize when users want distraction free, audible information.

Google's Android Maps+Navigation already relies on popup ads, but those don't offer advertisers the same value that paid search positioning offers on the web. It also seems unlikely drivers would want to listen to paid ads while navigating around town.

Apple's Eyes Free initiative is expected to begin rolling out in new cars early next year. It remains to be seen if Apple can duplicate its success with simple iPod car integration in the field of voice based, highly sophisticated iOS integration.