April 13, 2015    4 minute read

The Apple Car’s Potential

   April 13, 2015    4 minute read

The Apple Car’s Potential

In the last few weeks, a number of rumours have spread regarding “Project Titan”, which others may have heard of as the Apple Car. According to the rumours, the iCar would consist in an electric car, provided with an autonomous drive system and innovative technologies, which would enable a whole new level of user-device interaction. It has been speculated that Apple have bought a warehouse in Sunnyvale, near Cupertino, in order to gather engineers and new technologies to form a vehicle prototype. A123, a former leading company in the production of batteries, accused Apple of having secretly recruited its engineers, and additionally being responsible for its bankruptcy.

Apple has previously co-operated with companies including BMW, Alfa Romeo and Toyota for CarPlay, a dashboard that seamlessly interacts with iPhones. Furthermore, Apple has always shown its appreciation for the BMW i3, nor has it denied a potential collaboration with the German automotive company in the near future. A remarkable premise consists in the partnership between Swatch and Mercedes for the “Swatchmobile” in the 1990s, lead to the commercialisation of the Smart ForTwo and later the Smart Roadster and of the Smart ForFour. Considering the success collected by electric cars like Tesla Model S, Opel Ampera and Nissan Leaf, this could represent a new, interesting frontier of investment in high-tech innovation.

Nevertheless, the average time needed by a company to develop and commercialise a car oscillates between 6 and 8 years, so an alternative, effective strategy for Apple would perhaps consist of an acquisition or joint venture. Surprisingly, the market capitalisation of Apple overtakes that of Toyota, BMW, Audi, Seat and Skoda combined. It is then evident that Apple could serenely acquire an incumbent manufacturer.

 

Throughout the years, Apple has carried out numerous acquisitions, strengthening its vertical integration and market placement. The most important acquisitions that have taken place in Apple’s history refer to NeXT (1996, $429 million), Emagic (2002, $30 million), P.A. Semi (2008, $280 million), Fingerworks (2008), Intrinsity (2010, $121 million) and Siri (2010, $200 million). Considering Apples journey thus far, it would be not so unexpected to see Apple acquire some automotive entities to catalyse the growth of the company in the new space.

From the point of view of competitors, Apple’s appearance in this market could represent an incentive to continue to develop and innovate, whilst also simultaneously becoming a threat to the industry as a whole.

During the international car show in Geneva, some managers were quizzed about their feelings towards the possibility of having to compete with Apple in the automotive market. Gabriele Allevi, CEO of Bosch Italy, sees this hypothetical event as an opportunity for his company. In fact, the iCar not only would need windscreen wipers and other mechanical components, but also could potentially need sophisticated parts like sensors, accelerometers and video cameras.

Ulrich Hackenberg, member of the management of Audi’s Technological Development Team, thinks that any car provided with all-round autonomous drive would not have a considerable success, due to people’s desire to enjoy the driving: therefore electronic devices should assist the driver, and not simply substitute him. Sergio Marchionne, CEO of FCA, honestly recognises Apple’s marketing power and its astonishing capitalisation, but also trusts in a prompt reaction by the competitors, FCA Group first.

Recently, many technology enthusiasts have tried to predict what the final end product of a possible Apple Car will look like. Whether the rumours are real or not, Apple’s future investments and innovation choices will bring charming changes in the way people live, engage with their devices and with each-other, making Apple a very interesting company for the future.

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