Analyst: Apple’s CarPlay Includes ‘Key’ Artificial Intelligence Technology

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Source: Apple.com

Wells Fargo analyst Maynard Um sees a lot of potential in Apple’s (NASDAQ:AAPL) CarPlay in-vehicle device integration system — but not enough to justify an upgrade. In January, Um downgraded the iPhone maker from an “Outperform” rating to a “Market Perform” rating based on gross margin pressure concerns, limited market cap opportunity in existing product segments, and a shifting balance of power in the smartphone market. Although he declined to upgrade Apple in his latest note to investors, the Wells Fargo analyst pointed out that Apple’s recently announced CarPlay has positive long-term implications for the company as a whole.

“While the technology should help to further ‘lock-in’ existing consumers to the ecosystem and could convert non-iOS users, we believe the more significant announcement is in the details — namely Apple’s artificial-intelligence-like or contextual awareness technology, which we view as the potential future key to its ecosystem differentiation versus other vendors,” wrote Um in a note to investors on Monday. Many industry watchers have noted Apple’s ability to retain its users better than other companies due to its premium ecosystem that allows products, content, and services to seamlessly work together.

Apple announced at the Geneva Motor Show on Monday that its CarPlay system will be rolled out in new vehicles from Ferrari, Mercedes-Benz, and Volvo. As noted by Apple, “CarPlay makes driving directions more intuitive by working with Maps to anticipate destinations based on recent trips via contacts, emails or texts, and provides routing instructions, traffic conditions, and ETA.” Um believes that this “contextual awareness technology” could make Apple’s future products even more appealing to consumers.

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