Google, Amazon and Apple are in a war to control the extended home. The automobile is part of that equation.
Google, Amazon and Apple are in a three-way heavyweight fight for home supremacy. When it comes to the home – if Google and Amazon are Joe Louis and Muhammad Ali (two pound-for-pound greats) then Apple is Archie Moore (a great heavyweight but not a pound-for-pound great).
While Apple may comfortably lead Google and Amazon in the phones/wearables category, it materially lags in smart home devices in no small part due to Siri’s underperformance vs. Google and Alexa from a speed and accuracy standpoint (the two metrics that matter in the AI-powered voice assist world).
The automobile has long been an extension of the home and of our personalities. This appears to be changing with younger generations who are more comfortable with rideshare options (Uber, Lyft) as well as with subscription auto offerings such as Book by Cadillac and Porsche Passport. Given this dynamic, does Apple “need” to build an Apple-branded autonomous vehicle? We suggest “Yes”.
“Apple Car” – Apple’s First Large Ticket Consumer Device
Apple has seeded the global market with more than 1.4 billion active devices. Surely it can generate sufficient revenue from software services (Apple Health, Apple Music) layered on top of those devices to appease institutional investors. However, Apple at its core (no pun intended) is a Consumer Device company. That is Apple’s DNA. Therefore, to be true to its core Apple must enter the automotive OEM business.
There are different approaches to participating in the automotive industry. For example, Amazon, Apple and Google each have operations focused on automobile infotainment systems. On the passive investment side, Amazon has invested in autonomous startup Aurora; Apple has invested in Didi Chuxing and Lyft; Google too invested in Lyft.
To our knowledge of the “Big Three”, only Apple and Google (via its Waymo unit) are building autonomous vehicles. To be fair, in the case of Waymo they source automobile bodies from Chrysler.
Safety First
Safety is the name of the autonomous vehicle game. At this stage what matters most is accumulating vehicle miles traveled – this is how vehicle LiDAR systems learn. LiDAR systems are the laser-powered surveying technology that enable autonomous vehicles to see. We previously featured LiDAR company Luminar Technologies. Waymo leads the way with more than 10 million vehicle miles traveled. Apple lags at less than 100 thousand vehicle miles traveled. For perspective, Uber had logged more than 2 million autonomous vehicle miles traveled before one of its vehicles struck and killed a pedestrian in March 2018. We will first see autonomous vehicle OEMs roll out taxi services similar to Waymo’s. Next step will be for fleet owners & operators to offer short-term rental services. 15-20 years from now price points will reach a point where autonomous vehicles may be sold at retail. Apple will have an edge here as its customers are more affluent than the average consumer. Thus, it may enter the retail market early at a higher price point, perhaps in the $150,000-300,000 range. Apple Car could do much to strengthen Apple’s position as a premium brand. Recall that Apple flirted with acquiring British supercar OEM McLaren which isn’t to say that Apple has forever folded its automotive acquisition ambitions.
Waymo Phoenix taxi video:
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