It didn't attract as much attention as Apple (NASDAQ:AAPL) Pay or the the iPhone 6, but Apple's solution for in-car connectivity -- CarPlay -- finally made its mass-market debut earlier this month, rolling out to owners of some of Pioneer's aftermarket head units.
With CarPlay, an iPhone can hijack a user's dashboard, making it easier to access apps, listen to music, and make phone calls. Though it may not show up in Apple's earnings directly, CarPlay could serve a vital function -- extending Apple's iPhone ecosystem to the automobile. This can only drive further adoption of its service and keep its customers loyal. It could also put pressure on the likes of Garmin (NASDAQ:GRMN), Pandora (NYSE:P), and SiriusXM (NASDAQ:SIRI).
Apple still has some work to do
Unlike Apple's other products, which characteristically receive glowing reviews, CarPlay has not been universally praised. That's not to say that it's been labeled a train wreck, but many of the tech pundits that have had a chance to use CarPlay have come away wanting more.
9to5Mac noted that while CarPlay has "a lot of promise," it's "not without its hiccups just yet." In his review, Zac Hall found fault with CarPlay's reliance on Apple Maps, its lack of third party apps, and its method for navigating an iTunes library.
Digital Trends went further, arguing that CarPlay felt like it was unfinished product. "I can't help but feel like I should expect a little more from Apple. Isn't Google supposed to be the one that released half-baked products?"
It is a first generation product, one that the company isn't placing much emphasis on -- at least for now. During Apple's recent earnings call, for example, management never once mentioned CarPlay.
CarPlay adoption won't happen overnight
But that may be the logical approach: CarPlay isn't likely to see mass market adoption for some time. iPhone owners could, if they're so inclined, upgrade their car's radio to one of Pioneer's CarPlay-equipped products tomorrow, but it's unlikely that many will: CarPlay is only available on Pioneer's higher-end models, which run upwards of $500-$1000, not including installation. More broadly, the aftermarket radio business has been in decline for years, with ever more complex dashboard units discouraging upgrades.
Rather, CarPlay adoption seems likely to happen gradually, as consumers purchase new cars that sport the feature. Most of the largest car companies are on board, though Ferrari is the only one to begin delivering CarPlay-equipped autos.
Apple takes on Garmin, Pandora and SiriusXM
But despite CarPlay's problems and sluggish rollout, it poses a legitimate threat to many established players.
Apple Maps may not be the best GPS app on the market, but it's deeply ingrained in CarPlay. Once CarPlay is activated, a quick tap brings it up, providing turn-by-turn navigation and digital mapping. Garmin bears have argued for years that the iPhone makes the company's GPS units irrelevant, and even Garmin's management admits that the future of its GPS business is far from bright, but CarPlay elevates it to the next level.
CarPlay also focuses heavily on music, allowing iPhone owners to easily send songs from their phone to their car's speakers. This includes iTunes mp3s, but also Apple's Pandora competitor iTunes Radio, podcasts, and -- eventually -- Apple's on-demand streaming music service, Beats Music.
Admittedly, SiriusXM still has a few advantages over CarPlay -- it has exclusive content and doesn't require a data connection to function -- and Pandora, though not included in CarPlay, is still in many other car radio solutions. But so far as customers use these services for their in-car entertainment, CarPlay stands as a competitive threat.
Ultimately, if Apple is going to takeover the car, it will need to improve its software, and ensure that it performs to the high standards its customers have come to expect. Nevertheless, CarPlay's launch is an important first step.
Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Apple, Google (A shares), Google (C shares), and Pandora Media. The Motley Fool owns shares of Apple, Google (A shares), Google (C shares), Pandora Media, and Sirius XM Radio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.