FOR A FREE, PRINTABLE VERSION, CLICK HERE.
BMW Drives Controversy Over Pricing Tactic
Apple has created a new, state of the art system that reduces driver distractions. Apple CarPlay connects drivers to their iPhone and allows them to engage with many aspects of their phone through voice commands in their vehicles. The system allows users to access navigation, play music, make calls, and send and receive messages. All automakers, except BMW, provide the system with their vehicles for no additional cost. CarPlay is standard equipment on the Chevy Equinox, Honda Civic, and Hyundai Sonata. In contrast, BMW decided to offer CarPlay complimentary for one year, after which a subscription fee of $80 per year is charged.
The pricing tactic has become somewhat controversial as no other competitor charges for the service. In addition, Apple does not charge automakers to offer CarPlay. The BMW models that will offer CarPlay start at just over $40,000 and go as high as more than $100,000. BMW states that the fee is to keep the technology current as changes occur. However, one cannot overlook the potential revenue BMW will receive, considering the company sells more than 232,000 cars in North America, which is only 15 percent of its global sales. In one year, BMW would generate approximately $18.5 million dollars from Apple CarPlay subscriptions in the United States. Critics of the decision are encouraging BMW owners to complain about this pricing strategy. The features and safety implications of CarPlay are highly beneficial to all drivers, so there should be no impediments to its use. This pricing tactic should be an issue with all drivers and their passengers because of highway safety expectations to make safety technology available to protect all motorists. Distracted driving is a significant cause of motor vehicle accidents.
© Daniels Fund 2019. All rights reserved.