WSJ: How Apple becomes a mobility company

“This is the big industry mystery, if a famous fruit company is entering the game.” -- McKinsey's  Johannes Deichmann

From Christopher Mim's "Apple and the End of the Car as We Know It" ($) in Saturday's Wall Street Journal:

Apple could build an operating system for a whole vehicle, and run it on its own silicon. But the company seeks to vertically integrate whenever possible, to control every aspect of the user experience. So the question is: Would a car maker let Apple treat it as the company once treated AT&T, when it first rolled out its iPhone? Or the music labels, when it launched iTunes? At a stroke, it turned the tables and took control of massive markets and significant portions of our lives...

If there is any tech company on earth with the resources to go it alone, building a new auto maker from the ground up, it’s Apple. But there is no indication this is the company’s aim. If Tesla is the model here, it’s unclear why Apple’s executives would want to endure the tortuous process of building the manufacturing, testing and service capacities this path would require.

If providing the brains for other auto makers’ vehicles is unlikely, and competing directly with Tesla and every other electric vehicle startup unsavory, that still leaves another option for Apple. As the automotive industry inches toward self-driving taxi services, Apple’s persistence in both acquiring and developing software and hardware for electric, autonomous vehicles could signal its long-term ambitions. Could an Apple mobility company, instead of an Apple car, make the most sense?...

Toyota chief Akio Toyoda said in March that Apple should prepare itself for a 40-year commitment if it offers cars to consumers. This makes sense, especially if the goal turns out to be not merely to create a car, but to replace a significant portion of the world’s 1.4 billion cars with a completely autonomous, emissions-free, radically transformed transportation system. In other words, a trillion-dollar revolution—and Apple’s already pulled off one of those.

My take: An Apple-branded taxi fleet makes a lot of sense. But as Mims put it...

It’s quite possible that Apple will end up spending billions on attempts to develop an electric car without ever releasing a product. Or maybe it offers a product or service that fizzles. It’s possible that transportation is so different in scope and complexity from personal and mobile computing that the only way to succeed is through the kind of grand-scale collaboration Apple isn’t known for.

13 Comments

  1. Gregg Thurman said:
    I’m sorry, but the automobile is just another product. With enough resources ANYBODY can figure it out, just look at Tesla. The only difference between Tesla and Apple is resources. Apple has them (personnel and capital) and Tesla didn’t. That’s why it took Tesla so long to achieve scale.

    When Tesla began production (Tesla Roadster) they produced 1500 cars. Apple is methodical. I can see Apple commencing production only when it’s capable of producing 100,000 cars (in first year) that it wants to put its name on.

    Because of Apple’s cache, and super loyal, well heeled, installed base of users, I do not see it taking 40 years for Apple to be a driving force in the industry.

    1
    May 22, 2021
  2. Jerry Doyle said:
    I hold deep conviction that Apple has no interest in becoming a “mobility” company. Apple is a tech company producing the world’s greatest products for making our lives & users’ experience premium. Apple has no interest in being the taxi company for the masses competing in a “public” transportation “pricing market.” Apple is going to produce a premium EV car for the market that will scale in price and offering commensurate with its superior tech traditional offerings.

    The Apple experience is superlative. When it comes to transportation the masses still prefer an “individualized” personal car experience. Apple has no interest in becoming the Yellow cab or the Greyhound of transportation.

    My take: An Apple-branded taxi fleet makes no sense. The owner of an Apple car will need to have discretionary monies and will be an individual who desires to live in Apple’s blissful wall-garden of zen.

    1
    May 22, 2021
  3. If they do design a car Hon Hai, Pegatron and other vendor partners will build it, not Apple. Foxconn & Magna already know how to build subassemblies, parts and are tooling new EV plants right now.
    I have no doubt prototypes of key Apple AEV tech are on the road now, California and AZ require manufacturers report autonomous miles driven for research.
    iPhones are already carried in 100 million+ vehicles every day providing a platform for GPS, music, video, tourism, shopping and gaming apps, along with a reliable way to dial or text 911. That’s quite a foot in the door & quite satisfactory for me at this stage.

    3
    May 22, 2021
  4. Peter Kropf said:
    Mobility company?

    There’s more than taxis inside “Mobility”; Folding scooters, ebikes, ecycles…

    The most interested customers would be found within metro areas.

    Uber and others owned 1st gen metro mobility; Apple could own 2nd gen mobility. There’s a secondary reward for doing semi-autonomous driving first within metro areas:

    Perfecting FULL Lvl 5 autonomy at low and medium metro speeds (with tens of millions of miles daily) and using that AI to ‘take it on the road’ outside and between cities.

    5
    May 22, 2021
    • Roger Schutte said:
      Peter, I would upvote/star your post ten times if I could! The micro-mobility market is huge and Apple could do a lot in it.

      4
      May 22, 2021
  5. John Blackburn said:
    Apple’s mobility model, if it ever sees the light of day, might reasonably emulate the train rather than the car, with travel restricted to sanctioned routes along which AI offered safe and robust automated movement. These routes could be marked with U1 chips for clear navigation to establish a navigable grid within the larger road network, allowing vehicles such as a purpose-built taxi (from Apple or not) to traverse them—but more importantly, also any personal vehicles supporting “Apple Car” protocols, which might signal to the driver upon approaching the grid, “hey, there’s an Apple Grid available, want to let it take over for a while?”

    Those purpose-built taxis could take many forms, from the traditional hack to a simple flat barge for bulk transport. With the smarts integrated into the network and the vehicle controller talking to the network, the vehicles themselves would be freed to adapt to the varied needs of travel in metropolitan life initially, then later more rural routes could be built out organically over time as the advantages offered made the financial benefits clear.

    Seems like the pieces are all there, and Apple wouldn’t need to build a vehicle itself.

    0
    May 22, 2021
  6. Apple invested at least $18.75 billion in R&D in 2020. R&D was $1.78 billion in 2010.
    General Electric, the largest aircraft engine manufacturer, spent $3.8 billion on R&D in 2020. Tesla, $1.49 billion in 2020. I have no doubt there are some fascinating new products hidden in Apple’s nearly $19 billion in expenditures last year alone. Cupertino could be coming up with a replacement for the gas turbine, 3nm SoC and easily have money left over for AEV development costs like an advanced Lidar sensor!! Magna market capitalization is ~$29 billion, <2 years of Apple R&D. They already know how to build electric cars.
    (Credits to Statista.com for having all those 2020 numbers in one place.)

    2
    May 22, 2021
    • John Konopka said:
      It’s almost like Apple is the new Bell Labs.

      Mobility is a moving target (no pun intended). If Apple is getting into this business they are looking at what the world will be like in 5, 10, 20 years and they are designing for that.

      Not only will mobility be different, imagine how different the M10 or M20 SOC will be from what we have now. Imagine 100x speed at some fraction of today’s cost. I’m just making up numbers but clearly development will not stop.

      3
      May 22, 2021
  7. Michael Goldfeder said:
    I’m still of the opinion that there’s a connection to this autonomous vehicle in conjunction with their $1 billion investment made in 2016 with “Didi Chuxing.

    With 1.6 billion people to move around daily, apart from those in the rural areas, this might actually be where an autonomous Apple vehicle is rolled out in several years.

    3
    May 22, 2021
  8. Steven Philips said:
    I think most of us are still seeing this from a USA transportation perspective. I’ve noted the same thing as Michael several times – and I’m sticking to it! 🙂 It’s a big world out there. Outside of the US.

    1
    May 22, 2021
    • David Drinkwater said:
      I’m a little late to this conversation, but e-mobility in China and India, with their huge populations and horrible pollution problems are great opportunities for Apple.

      The downside to those opportunities is that the average wallet is a bit thinner in China and India than elsewhere. (Note, I said “average” wallet. There are so many more wallets in China and India than there are in the USA that there is an ample sufficiency of above average wallets to move the needle.)

      0
      May 24, 2021
      • Bart Yee said:
        @David While I agree with your perspective on potential numbers, an Apple potentially autonomous transportation / e-mobility system (or any) would have tremendous obstacles with high traffic density, poorly disciplined drivers, motorcyclists, moped operators and even pedestrians in most urban areas of China, India, Russia, Eastern Europe, let alone potential free-for-all driving habits in Italy, some parts of UK, and SE Asia, and IMO, most of Central and Southern America. The other issues are lack of traffic enforcement, lane, stoplight or passing discipline, plus aggressive driving habits for perceived slights. Imagine how drivers there would feel about an autonomous car with no driver perceived as cutting them off even with a legal and safe maneuver?

        0
        May 25, 2021

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