Will Apple's over-the-air business model work in cars?

Will Apple’s over-the-air business model work in cars?

Stellantis CEO Carlos Tavares replied that the company could overcome this through the strength of its 14 brands and via its cost discipline, but it remains a good point: will we ever need to pay extra for digital services given someone, somewhere will probably give them out for free?

Right now services are few and far between. VW Group brands, for example, will charge to benefit from data sharing between your car and your app after a certain period when it’s given for free, but the cost is likely to outweigh the benefit for most.

Premium brands such as BMW and Mercedes have got smarter in offering digital downloads to upgrade your car after the event: for example, BMW will charge you to upgrade your cruise control to adaptive cruise control. Or if you don’t have Apple CarPlay you can add it for £265.

Competitors, however, will offer these features for free (or at least bundle it into the cost of the car). “The question is where does the line fall between what is attractive and free and therefore is a really important part of getting a consumer to choose your car, versus what people will pay for to achieve a good stream of regular income,” KPMG’s Peberdy says.

Customers might baulk at paying to access for something that they see as already being fitted to the car, but that is changing. Software upgrades delivered over the air can radically improve the functionality of hardware fitted to cars, for example the camera systems or an electric car’s battery.

The hot-potch of controllers for different functions in current cars is being swapped for smarter central brains that can deliver services faster. Renault is switching to a dual-chip system from 2026 powered by U.S. chipmaker Qualcomm that will power technologies such as the digital cockpit, 5G connectivity, over the air updates and Level 2+ driver assistance.

The service or feature being offered might not even be conceived at the time of purchase, let alone embedded in your car waiting for you to unlock it. Thierry Cammal, the head of Renault Group’s Software Factory told journalists in a briefing in January that Qualcomm’s ‘Digital Chassis’ technology will allow it to develop services in “3-6 months”, rather than the three years it takes now. Rather than it being downloaded into the car it stays in the cloud and you access via super-fast 5G modems.