Apple is getting into the business of making self-driving cars, according to Reuters: “Apple Inc is moving forward with self-driving car technology and is targeting 2024 to produce a passenger vehicle that could include its own breakthrough battery technology, people familiar with the matter told Reuters.” That is good news for design conscious people.
Apple is working to produce a self-driving vehicle with “breakthrough battery technology” by 2024, Reuters reported, citing anonymous sources. The iPhone maker, which declined to comment on the report, is designing a personal vehicle for the mass market. It includes plans for a “radically” cheaper battery, as well as lidar sensors, which aid self-driving cars in getting a three-dimensional road view. Shares of lidar makers surged on the news. (LinkedIn)
But I am not sure that would be great news for the fashionista brand called Apple which has built a business on selling exclusive hardware on proprietary software. Yes, Apple has commanded heavy margins in most of its products. Doing that in cars may be challenging.
Yet, I do concede that Apple could bring the playbook of Tesla into its cars – make ownership of cars to follow the same business model as software.
If that happens, expect subscriptions for support and new updates. More so, when you sell your car, the new buyer will have to re-license the set of software. In other words, Apple could make its cars follow the same model we are used to when we buy computers and the associated software.
Yet, this is all rumour. I will bet that Apple will not have any car in any garage. Rather, Apple will build components and technologies which it will license to car companies. If that happens, Apple stays at the edge of the smiling curve, instead of moving to the center.
But who knows? Apple can make customers fans, and from that extract more value in the business of automobiles as it has done when it got into smartphones. After all, innovators create a new basis of competition and in the process stimulate new markets. But unless it does that, the Apple iCar may have a brake problem which will affect its sales at the hefty margin that would make Apple happy.
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