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What Apple Inc.'s CarPlay Tells Us About the Rumored iWatch


Apple is likely to remain focused on devices and services that integrate well with the iPhone.

When Apple (NASDAQ:AAPL) unveiled its car-entertainment system several weeks ago, we were provided with a glimpse into the company's future. It wasn't dazzling. I argued that CarPlay is the right product for Apple, and potentially a big deal, but it also falls short of what some Apple enthusiasts had hoped for.

Like the rumored Apple television and the iWatch we've been hearing about since 2011, the product formerly known as "iOS In the Car" was seen as an opportunity for Apple to innovate and disrupt. It was Apple's chance to blow everyone's mind and repeat the world-eating success of the iPhone.

Instead, CarPlay turned out to be a conservative offering that plays well to Apple's strengths, while taking no unnecessary risks. It reinforces, rather than one-ups the iPhone. Media and the market both reacted to the announcement with a shrug. Apple's share price spent March 3 meandering, and the New York Times labeled CarPlay "almost a step in the right direction."

Tough crowd. Steve Jobs famously said that, "a lot of times, people don't know what they want until you show it to them." That may be true, but it's still a bitter pill to swallow at a time when people want moonshots -- delivery drones and automated cars. Most consumers are still waiting for Apple to "think different."

For better or worse, the company is likely to take a similar approach to future products. Evidence continues to suggest that Apple has its eyes on electronic wrist-wear, and CEO Tim Cook insists that Apple TV is more than a hobby. Rather than "next big things," however, Cupertino is likely to focus on devices and services that integrate well with the iPhone, and add a little height to the walls around its garden.

This stands in contrast to Google (NASDAQ:GOOG), whose ambitions are broader (and more in keeping with the times). The search giant will soon release an Android-based software-development kit for wearable devices. Other efforts are intended to get Android into automobiles and onto TVs, as well as turn Google's streaming device, Chromecast, into an open-software platform. Expect to see apps for your fridge, apps for your car, apps (and Google) everywhere.

The success of this approach will depend upon consumers' willingness to treat cars, watches, and entertainment appliances like smartphones and replace them every few years -- all so they can duplicate a functionality that smartphones already give them. There's no question that Google would benefit from this redundancy, expanding its frontiers and gaining access to new data. Hardware manufacturers would love a faster refresh cycle. However, that consumer variable -- will people pay for this? -- could throw the whole equation.

Apple's vision is iPhone-centric, and for good reason. A tightly controlled operating system and powerful hardware like the A7 system-on-a-chip -- packaged with the iPhones 5c and 5s -- make Apple's handset a more versatile tool than the general run of smartphones. One example: For years, iPhone owners have had the ability to stream video to their Apple TVs. Called AirPlay, this feature bears more than a nominal similarity to CarPlay; they're pretty much the same concept.

Google tried to implement a similar feature in Android 4.2, called Miracast. Eighteen months later, the update has yet to reach 30% of users, and many Droid smartphones lack the hardware to make use of the technology. Chromecast was a consolation prize, and an attempt to stave off Apple in the living room.

This turned out to be unnecessary; AirPlay has not been well-marketed, and Apple never partnered with television manufacturers -- as it has now done with automakers -- to get the technology factory-installed. Consumers may have wanted the feature, but Apple made little attempt to deliver it. This lost opportunity can be seen in the fact that Miracast, despite its late arrival and some growing pains, is now standard on many newer TVs.

CarPlay looks like the effort that AirPlay should have been. Apple's goal is the same: sell smartphones. Smart cars and smart set-top boxes are only a means to that end. Any wearable device is also likely to play a supporting role. I'm not sure why anyone would want an overwrought pedometer in the first place, but better integration at least opens the door for other uses of wearable devices, like hands-free payment -- another potential opportunity.

An Apple-branded television is a long shot. Such a device would compete with the iPhone and iPad rather than complement them. If anything, Apple's footprint in the living room should get smaller; there's no reason the iPhone can't integrate as easily with a Samsung (OTCMKTS:SSNLF) TV as it now does with the Volvo XC90. CarPlay provides a blueprint for this, and a way to make televisions smart without giving them two-year expiration dates.

Still, it's hard to get excited about new uses for an old product like the iPhone. Not when Tesla (NASDAQ:TSLA) is building the world's biggest battery factory and Google is solving death. With so much hyperbole flying about and so many firms chasing new trends -- even unproved ones like wearable tech -- a sensible approach is bound to fall flat. Apple may be doing the right thing, but recognition will be a long time coming.

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