“Reports about Apple preparing to enter the auto market surfaced last month, leading to frenzied speculation about whether it plans to sell its own car, partner with auto makers or try to grab more of the electronic and software content in vehicles amid growing consumer demand for better connectivity and the approach of autonomous cars,” Greg Keenan, Brian Milner and Omar El Akkad report for The Globe and Mail.
“Apple is keeping mum, but enough information has leaked out about its extensive research – including the code name Project Titan – to indicate that the tech giant is determined to win a bigger piece of a global market that generates $1.6-trillion (U.S.) in revenue a year from new car sales alone,” Keenan, Milner and El Akkad report. “Nothing has the potential to transform the auto industry quite like the entry of the world’s most valuable company into the market.”
“Apple’s cash pile of $179-billion is 20 times the annual capital spending of Ford Motor Co. Its profit is nearly four times higher than that of Toyota Motor Corp., even with the depreciated yen. And its global clout and market value in excess of $740-billion would qualify it for membership in the Group of 20 if it were to become a nation,” Keenan, Milner and El Akkad report. “Whatever form its vehicle plan eventually takes, it represents an existential threat to the auto club – some of whose members barely survived a brush with death a few short years ago… ‘The issue here is these guys are monsters,’ says veteran auto industry executive Tom LaSorda, former chief executive officer of Chrysler LLC. ‘They’re big, they’re effective, they have cash. I bet you this is being discussed in every boardroom. And if it’s not, they need to give the board a shakedown.'”
Much, much more in the full article here.
MacDailyNews Take: When Apple enters markets, it’s because they can bring something(s) so unique to the table that significant disruption is inevitable. We’ll see this next in the wristwatch market.
Related articles:
Germany’s Continental AG wants to partner on possible Apple Car – March 5, 2015
Many auto execs see Apple Car as serious competitor – March 3, 2015
Nissan CEO on Apple Car possibility: ‘It’s obviously good news’ – March 2, 2015
Apple legal filing adds ‘Vehicles’ to its list of company activities – March 2, 2015
Do not underestimate the Apple Car’s Potential – February 23, 2015
Apple’s ‘Project Titan’ could reshape the auto world – February 22, 2015
Apple Car: Forget ‘electric,’ think hydrogen fuel cells – February 20, 2015
Apple hiring auto engineers and designers – February 13, 2015
Apple and Volkswagen working on iCar? – August 29, 2007
RUMOR: Apple prepping vehicle navigation system – June 18, 2007
Business writer begs Apple CEO Steve Jobs to start a car company – November 02, 2006
The auto industry creates its own FUD because of a rumour about Apple’s ‘new car’ that has yet to be announced. Time for a long term LEAP put on the auto industry?
FUD about Apple because auto companies do INCREMENTAL improvements.
Existing auto companies fear a dedicated group seeking fundamental improvements all at once for the whole vehicle.
Tesla showed it could be done on far less capital than Apple has.
I don’t see them doing more than getting the maximum connectivity in the auto world. That’s where the money is b
You’re underestimating Apple.
While there is some money in systems like CarPlay, there is much more money in entire vehicle information systems. The major player is Blackberry’s QNX, which is really not terribly advanced. Some of that is due to the time it takes auto makers to develop systems, but some is due to the need to make sure systems work under a multitude of environmental factors, options packages, technology changes, etc.
The real question is what is Apple envisioning here? Apple’s monster success has been built off of the iPod, which people replaced frequently, and then hit the really big time with the iPhone, which people replace every 1-2 years. That will not happen with a car, but that may not be Apple’s end game.
Imagine if Apple could design a car control system which could be upgraded as simply as buying an new iCar controller and plugging it into the dash. New options could be added, and even minor upgrades could be done wirelessly (currently if you have a software update for your car, it has to be done through a dealership).
Apple would need to design the iCar control module to keep running for decades, and it would have to be durable enough to not require replacing (obviously parts can fail, but within generally acceptable parameters). There could be other ways to add functionality, such as Bluetooth/wired connectivity for new features like TouchID panels, HUD displays, etc. that would not require dealer installations (or could make dealer installations much easier and more potential sales for dealers of after-market parts, keeping in mind the service center is a dealership’s main profit center).
I think people who dismiss an Apple car are thinking in two boxes: Apple continuing a basic CarPlay-like infotainment system, and Apple building a full-blown car. Perhaps the truth is more in Apple producing massively different automotive control systems such that it never builds an Car, but essentially re-invents the car’s entire electrical system.
Apple may have “done the numbers” showing that cars are increasingly computers on wheels connecting a minimum of about 300 sensors and thus monitoring and controlling everything including collision avoidance. Hence, maybe Apple looks at becoming THE source for auto electronic system.
And which company knows the most about chip design, programming, sensors, displays and control systems?
But once you look further, there are other possibilities.
Can you re-imagine a bumper created by Apple that has an ‘air bag’ or similar to limit deceleration forces and damage both front and rear?
Can you re-imagine body panels done in materials that take less energy to produce and may not require paint? Paint is touchy and expensive.
A car with an electric motor on each wheel can provide the best control over wet and icy conditions and during loss of traction where the computer can adjust power independently to each wheel. In addition, the failure of one electric motor won’t stop the vehicle. The amount of space opened up for storage in an average size vehicle is significant as seen in the Tesla.
Apple sees opportunity in one of the largest cost item in the average family budget.
In case of collision they could deploy a protective force field:
http://abcnews.go.com/Technology/boeing-patents-star-wars-style-force-field-technology/story?id=29839654
And if they go electric maybe they will apply invisible solar panels on the surfaces.
>(currently if you have a software update for your car, it has to be done through a dealership)
Not if you have a Tesla.. (Which I don’t, btw.)
Bizlaw. I think there’s a huge amount of money in selling the a control module to every car maker. That’s what I meant by connectivity: A universal connectivity. As a stockholder, I like the idea of maximizing, profit. On the other hand as a petrol-head, I would dearly love to see a AAPL sports car. 🙂
This puts the Maps introduction and the collecting of driving data that iPhone was doing years before Maps in a new perspective. Apple must have crazy detailed info on most (all?) serious roads in the civilized world.
Imagine the processing they could do on optimizing the roads in your town. They could tell your local government how all the lights should be optimized, where more and fewer lanes are needed, what are the ideal speeds in certain areas, and more.
And their cars will know it all.
Literally the entire experiencing of driving — driver, road, regs, lanes, repairs, etc — could be disrupted here.
Interesting thoughts, NB.
Wait a minute, Tom lasorda was the LA Dodgers coach, right?
I think the auto industry is at a cross roads in a sense.
They know the existing model is not sustainable for the long haul and the technology that will drive future autos will likely be vastly different than what we currently have so the industry feels vulnerable to a degree.
Ooo! Scary!
Apple’s drive for world auto dominance
We don’t even know what Apple’s doing that’s relevant to cars! And the sheeple are all scared because someone yelled ‘WOLF!’
Here’s what’s really going on–> BattleBots to fight it out in the Mothership Arena!!!
Get it? “Apple’s Drive…” That’s a pun! Huh-huh. Here’s some more we’ll be getting to enjoy in the future! (feel free to add your own):
• Pave the way!
• In the fast lane!
• Passing the competition!
• Shift into overdrive!
• Hit a pot-hole!
• Runs over the competition!
• Pole position!
• Fuels profits!
• Puts the brakes on!
• High octane!
• Takes a back seat!
• Electrifies the industry!
• Buckles in for a fight!
• Steers the future!
• Firing on all cylinders!
As someone in the vehicle development and selling business, I think this article is the best that I’ve read on the subject of Apple’s interest in cars. Imagine a company with literally 100x the resources of Tesla, which itself has been pretty disruptive, focusing on the problem of personal transportation. Just as there were smartphones before iPhone, and tablets before iPad, Apple’s take on a “car” could be truly world-changing. Steve would be proud.
Definitely worth the read.
The legacy auto industry was forced into the electric car business fifteen years ago by the CARB. They responded with useful cars and held the IP for large format NiMH batteries to make the cars better. They had an emerging dedicated customer base. The future was theirs to have.
And they were resisting at every step. Their solution was to change the political landscape to have the zero emission requirement removed, sell the battery IP to Big Oil, effectively killing it, and turn their backs on customers by destroying the cars they wanted so badly.
What is emerging now is an auto industry-free automobile. Look at Tesla, great cars, an involved manufacturer and completely free of the most distasteful aspect of the legacy auto industry, dealerships. All that’s missing is volume and an affordable price point. Enter a low-cost lease plan (sort of like subsidized iPhones) and it’s game over.
I hope karma turns out to be a real bitch.
quiviran, your perspective is not unique, many of us are hoping for more fundamental improvements to the automobile. However, you are missing many key industry drivers. Such as:
1) the public’s fear of EV range limitations and charge times
2) number of electric recharge stations
3) safety and reliability of batteries, especially in extreme weather. see the YouTube of the Tesla going up in flames.
4) corporate welfare/corruption. American taxpayers still pay for ethanol subsidies, but Congress axed most incentives for any industries to innovate toward renewable energy. STupid and short-sighted since the path to renewables would create serious jobs AND long-term cost savings for everyone.
5) Large automakers have had EVs on the market on & off for over 100 years. they faired poorly in the marketplace because up-front cost is higher than equivalent cars using internal combustion engine. The buyer amortizes fuel payment with a petrol engine whereas he has to pay up front for an expensive battery pack. the meagre smattering of tax incentives in some states doesn’t always cover the cost difference, especially now with temporarily cheap petrol right now.
6) EVs do not come in important vehicle configurations. Not everyone wants/needs a convertible or a sedan.
7) software bugs scare people off. Nobody in the car industry, including Tesla, has answers to all possible critical failures or security issues that arise from taking reliable mechanical devices and replacing them with relatively more fragile electronics. Most people will shy away from unproven tech when making huge investments.
8) fashion. Automobiles are not sold based on sound consumer logic.
9) startup cost. The sad reality is that Tesla isn’t making any money. Most other major EV projects have been financial sinkholes too.
10) Apple will not likely be able to undercut the price of open-source or industry-standard equipment. That’s not what Apple does. Apple can’t operate in an industry that makes single-digit percentage profit margins. All Apple can do is attempt to make cars more iPhone friendly. Better late than never.
11) as bad as Apple Maps remains, it’s pretty obvious that EV innovators like Tesla will be sticking with Google Maps for the foreseeable future. Those of us who have done objective comparisons with Apple and other competing navigation options are not very excited about Apple Maps integrated on the dashboard. We’d rather have an iPad dock.
The facts regarding your item 3
http://www.teslamotors.com/blog/model-s-fire
Your other points are similarly shallow.