Against the Apple Car. Anatomy of an integrated (and profitable) future for Big Tech

Hardware, software, ecosystem, luxury of life. In Apple’s actions, we can read the desire to play on its strengths and take advantage of the electric car revolution, in order to expand in the sector. Another part of the holistic offer: fully integrated services for the user, subscriptions and thus fixed income that makes investors happy

Not even launching a car, Apple’s factories are packed with top-caliber designers, engineers and administrators. According to Bloomberg the Californian company has just hired Luigi Taraborrellia manager with twenty years of experience in Lamborghini, the latest in a series of appointments from the sector the automotive industry. For the newspaper’s sources, it is a clear signal: The apple house is intensifying work with its self-driving car.

Rumors of this hypothetical Apple car have been around for nearly a decade, but so far they’ve only produced a few registered patents and news of setbacks, afterthoughts, changes of (and in) direction. The department exists, employees are growing, and the company uses existing cars on California roads to test its driving systems, but secrecy surrounding “Project Titan” remains tight.

Observers and analysts share the almost total certainty that the work is developing on two fronts, hardware and software: an electric car and a system equipped with artificial intelligence (AI) capable of driving it. Two fields where there is currently ruthless competition, where the car manufacturer Long-term players start with an advantage, and a number of newcomers (battery suppliers, startups, tech companies) fight to support or replace them in the transition to electricity. This is also why, at least so far, Apple’s moves have been more lateral.

In June, the company unveiled a preview of the future of CarPlay (the service with which its phones communicate with systems infotainment of cars): in the coming years, Apple wants to replace the car software by connecting to the vehicle’s sensors and using the screens as extensions of its operating system to manage information and functionality, air conditioning and navigation. ONE Apple user experience packaged in a customizable interface to adhere to the automaker’s aesthetic. All the while the industry is in a strong digitization phase.

Source: Apple

“While the switch from one screen to another may seem like a small step for Apple, it is a giant leap in the technological and commercial engagement between the iPhone maker and the world’s automakers,” wrote the analysts from Reuters back then. The company actually wants to replace the software from car manufacturer and use their phones as the “brains” of the vehicle. The move suggests an expansion of their capabilities, which could border on autonomous driving, which could then become a service to be sold to other companies.

Of course, the car industry has reserves. Paying attention to how the iPhone destroyed the masters of the time (Nokia, BlackBerry…), it car manufacturer they are reluctant to put control of their customers in Apple’s hands. On the other hand, they know their systems infotainment they are a weak point and they risk losing customers (especially young people) who demand more digitization and integration à la Tesla. There is already some common ground: Like Apple, rivals Google and Amazon have also struck deals with some manufacturers to provide next-generation software services.

For the company of Tim Cookmeanwhile, this development guarantees an expansion of its integrated services – the so-called walled garden, or fenced garden, which is one of the strengths of its products. Apple wants to ensure continuity and simplicity for the paying customer every time they transact with a device, and they don’t see why it should be any different with the car. But the software is only half the story of Project Titan; six rumours true, the company could launch a real car as early as 2025 or later.

Here, Apple can take advantage of another strength, namely its relationships with tech suppliers (including Foxconn, which unsurprisingly has expanded from electronics tothe automotive industry, and it is actually already a partner of Stellantis). But for the company to break into the market, its product must be revolutionary enough to trigger an “iPhone moment” for the four-wheel industry. Hence the speculation about fully autonomous driving, about cars radically redesigned around the passenger user experience, about elements of augmented reality. If cars are evolving, you can be sure that the Apple company wants to be the epicenter of change.

But even if it didn’t go that far, the expansion in the sector the automotive industry it means for Apple the same opportunities it is looking for in other areas, from finance to wearable technology (hence fashion): more services to combine in its increasingly luxurious offerings, therefore more subscriptions and more constant cash flows. Subsequently greater satisfaction for investors and market value able to exceed the record (touched and then abandoned) of three trillion dollars. Antitrust allows.

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