Why Tesla and CarPlay Matter to Everyone

Tesla, along with Apple's recently announced CarPlay, are positioned to have a major influence for everyone planning to be driving a car in the foreseeable future. This is independent of whether or not you're driving a Tesla or a car equipped with CarPlay.

Stuck in the (Technology) Dark Ages

The auto industry has managed to remain uniquely positioned with respect to technology. Low to middle-end cars are the worst offenders, but in this class cost almost always comes first. Higher end cars are still behind, but not as far. You could argue that Ford has had their voice control service for a while now, other companies are on a similar trajectory, but the offerings are entirely underwhelming at best.

Here are a few key reasons the auto industry is able to have inferior technology and charge such a premium for it; these are inferences I'm making, not based on inside knowledge.

  1. Cost is king when people shop for new cars.
  2. The tech we're used to isn't designed for as rugged of conditions. Your iPad's operating temperature certainly doesn't cover -15 degrees, but your car's touch screen does. Vibration isn't likely as much of a concern.
  3. Design cycles are long for cars, there's a reason cars debut so long before they're ready to buy. The tech available in that car will lag what is thought to be current because it was designed a couple of years (?) beforehand.
  4. There is a vested interest by auto makers to prevent major software feature upgrades. These comforts, when outdated, can become driving forces behind another purchase.
  5. Proprietary barriers exist. Supporting only Apple or only Android is highly limiting and until now there was no official protocol to support. If they chose to support an unofficial protocol, there is no guarantee it would continue to work, which would result in very angry customers.

Driving Change

So where do Tesla and CarPlay come in? I think CarPlay is fairly obvious. It is the first major step at taking the brain of the technology out of the car and putting it into the phone. Phones are a lot easier to upgrade. As long as compatibility to the CarPlay protocol is maintained, this is a vast improvement over the current situation. The most obvious issue is that CarPlay is Apple/iOS only, and likely always will be. I suspect cars will eventually need to ship supporting CarPlay, Google's solution, and maybe even Microsoft's to remain competitive.

Inside Man

Tesla has the potential to disrupt from the other side, the inside. They're the first actual shot at being a successful and forward-looking auto maker. They have high tech at their very core, it is what they are built on. Tesla has embraced the smartphone revolution in a very serious way giving you a tremendous amount of control over your vehicle from within their app.

Progress in this industry will only come if it is successful enough that auto makers can't produce cars without competitive technology. The CarPlay features are low-cost to implement with the potential for high return. Tesla is sweeping the industry with their incredible design, tremendous safety, and aggressive adoption of new technology. I'm not declaring these two products as the long-term "winners," but I do firmly believe they'll serve as excellent propellant to move this industry out of the dark ages.

On Rumors of Apple Buying Telsa

There has been no shortage of speculation since news broke that Apple's M&A representative spoke with Elon Musk about acquiring the increasingly famous auto maker. Josh Ong has made a great case for why it might make sense, so I won't duplicate that.

The whole issue has some red flags that stand out to me as pretty major reasons an acquisition wouldn't happen.

  1. The auto industry is a low margin industry, especially on the low end. Tesla is not yet competing in the lower end market, so their margins are likely much closer to Apple's than Hyundai's, but Tesla has plans to expand into the $30,000 arena where there is simply no way to have Apple-like margins.
  2. The whole situation seems Google-y. Apple's wheelhouse is making beautiful and simple computing devices. An entry into the auto industry, despite Jobs' reported desire to do so, is un-Apple-like. With that being said, the auto industry is so slow to adopt new technology that it would be quite easy to disrupt.
  3. Setting aside the magnitude of the purchase being vastly beyond anything Apple has purchased before, the fact that they couldn't make this purchase quietly is worth mentioning. Apple tries to keep those as quiet as they can, this one would be making headlines around the world.