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BMW CarPlay charge hints at expanding revenue grab

Would you be happy to pay for CarPlay and other apps if your last car gave them to you for free?
Stephen Corby
Contributing Journalist
CarsGuide

2 May 2019 • 4 min read

Perhaps the only thing more incredible than BMW Australia charging its customers a subscription fee of up to $179 a year to use Apple CarPlay in its vehicles - a feature that comes free in everything from Hyundais to Ferraris - is that they haven't even come up with a good excuse for doing so.

And scarily, it sounds like just the tip of the iceberg in terms of premium brands beginning to charge annual subscription fees for technology in an attempt to open up a new, digital-revenue stream.

Access to CarPlay - which allows you to mirror the functions of your iPhone on the touchscreen of your car, and also reads SMS messages and lets you dictate replies - will come free for the first year with a new BMW.

After that, however, if you want to keep the functionality you'll no doubt be quite attached to by then, you have to sign up for a subscription, which costs $179 for one year, $479 for three years or $639 for a "life-time" deal.

When asked what exactly this money was for, various BMW spokespeople struggled to come up with an answer, but there was a lot of talk about how "people change their phones so regularly these days", and the suggestion that if you switched from an Apple phone to an Android one you might not want CarPlay any more.

To which the assembled media - attending this week's launch of the glorious-looking new Z4 and the gob-smacking new M850i xDrive Coupe and Convertible - replied that yes, that's true, but how come every single other car company gives you that option for free?

Even sub-$20,000 commuter cars typically offer CarPlay at no extra cost, while Ferrari - a company not afraid of charging its customers substantial sums for optional extras - was one of the first to include the tech, for nothing.

Vikram Pawah, the CEO of BMW Group Australia, also struggled to explain the rationale for the subscription, suggesting that "customers want the latest and the best, that's what people expect us to deliver", and that by paying the fee, BMW owners would always have the most up-to-date version of CarPlay available.

The software is, however, updated by Apple, not BMW, which merely allows the system to run, wirelessly, using its screens, so was the subscription fee going to Apple, then? Er, no.

"The argument is that you have to charge (for CarPlay) so that people who don't want to use it, don't get charged for it,"Mr Pawah added.

Which would be fine, except that no one else does charge a subscription fee for it.

He also hinted that this was merely the beginning of a new digital-revenue stream for BMW, because the "market is going to evolve, from the traditional car that you use, to a car that has technology and services that you use," and are thus willing to pay for.

"We're going to be a company that offers premium mobility and technology solutions to our customers; we don't just call ourselves a car company any more," he continued.

"There's so much tech coming into cars that the business model is going to change over time. We're trying to work out what is the direction that the customers want us to go."

The new Z4 and 8 Series cars also offer the ability to open, start and lock your car using an app on your NFC-chip-equipped phone (only Samsung phones at this stage).

Once again, this functionality is free for the the first year of the car's life, but if you want to keep using it you'll have to pay $129 a year for the BMW Connected App, which will also allow you to share the ability to leave the car key at home and use the car via a phone with up to five people having access.

Clearly, BMW is betting that its customers will be happy to add yet more subscription bills to the ones we all pay already - for our phones, our internet access, our television services - and hoping that it can earn a nice little side line out of it.

Would you be happy to pay for CarPlay and other apps if your last car gave them to you for free? Tell us what you think in the comment section below.

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