Auto Tech

BMW's Apple CarPlay annual fee is next-level gouging

Commentary: Putting a paywall in front of a free service is a terrifying glimpse of what a world without net neutrality could look like.

Andrew Hoyle/Roadshow
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A pricey up-front fee to enable a service freely available elsewhere is a bit hard to swallow in the real world. However, in the heady, premium-package-rich realm of German luxury cars, such price gouging is the norm. Prefer dark silver to light silver? That'll be $1,500 extra. Alcantara inserts instead of leather? $750 at least. USB ports you can actually do something with? Better call your accountant.

If there's a positive to this system, and I'm admittedly stretching here, it's that you can get a car configured exactly to your needs, a car uniquely constructed to your exact specification. I imagine that's a very nice feeling indeed, though I confess I've never had the wherewithal to enjoy such a luxury myself.  

While GM and other manufacturers happily include Apple's CarPlay service for free even on their most attainable models, BMW and plenty of others have levied upgrade fees to enable CarPlay, or bundled the service inside pricey packages of widgets you may or may not want. That, sadly, is par for this margin-rich golf course, but when we learned this week that BMW would change from a single, up-front fee to an annual fee, in my mind that changed everything.

Instead of a one-time, $300 fee, starting on 2019 models BMW will charge $80 annually for the privilege of accessing Apple's otherwise totally free CarPlay service. You do get the first year free, much like your friendly neighborhood dealer of another sort, but after that it's pay up or have your Lightning cable metaphorically snipped.

On the surface this is pretty offensive, and it seemed like something must be driving this. The official word from BMW is that this is a change that will save many (perhaps most) BMW owners money. Indeed, the vehicle segments where BMW plays are notorious for short-term leases, and those owning the car for only a few years will save money over that one-time $300. But still, the notion of paying annually for something that's free rubbed me the wrong way. And, based on the feedback we saw from the article, it rubbed a lot of you the wrong way, too.

And then I read that Matt Bubbers, an automotive journalist for the Globe & Mail, was given a curious statement by a representative from BMW Canada. He was told that Apple will be changing its fee structure such that manufacturers would need to pay on a per-car, per-annum basis to keep CarPlay running. That statement has since been retracted and a BMW Canada representative told me that Mr. Bubbers was given "inaccurate information." However, in the confused hours in between initial statement and subsequent retraction, I was left wondering: just what does Apple charge for CarPlay, and indeed what does Google charge for Android Auto?

The answer, as I'd find out, is basically nothing -- though it is a little more complicated than that.

In speaking with multiple sources at various manufacturers who offer cars with Apple CarPlay and/or Android Auto, I was quickly able to confirm that such fees, at least right now, do not exist. CarPlay and Android Auto, which are free for we consumers to use, are also provided for free for manufacturers to embed into their cars.

An Apple representative confirmed to me that there are no fees to automotive OEMs to enter Apple's Made for iPhone (MFi) program, nor any sort of ongoing royalty payments or additional fees related to CarPlay. 

These services aren't entirely free, as manufacturers must implement the hardware to run the functionality. And there are other potential costs for manufacturers. There's surely additional testing and development required to implement the thin-client interface that serves up Apple CarPlay, plus the potential for software updates down the road. However, the beauty of CarPlay and Android Auto is that they run almost entirely on your phones, and so the cars shouldn't really need updates.

So we're back to square one: BMW is effectively putting a paywall in front of a service that is provided to you and to me for free. As I pondered this I couldn't help but start seeing the parallel to the tenuous state of net neutrality in the USA. Imagine if your internet provider started charging $5 a month to enable YouTube and you're not far off from what BMW is doing here.

This is of course net neutrality in an abstract sense: Automobiles, even the most pedestrian, are private, commercial products. As such, manufacturers are free to charge whatever they like for whatever features they like. That's just like how Electronic Arts is free to charge whatever it wants for DLC and other enhancements to its latest games, and we've all seen how well that's gone lately

Update, Weds, Jan 24: The text of this piece was updated to include information from an Apple representative clarifying that automotive OEMs do not pay any fees whatsoever for either the MFi program nor for the use of CarPlay.