Positioning for future mobility

What’s up with Apple, Nissan, GM, Honda, Tesla, Google and more

In this last month, Apple hired an artificial intelligence expert from Nvidia. Nvidia is a chipmaker that is best known for its graphics products used for computer games, but has recently been pushing into the world of autonomous vehicles. The new hire, Jonathan Cohen, was the director of deep learning for Nvidia. Moreover, in a recent interview, Apple’s CEO, Tim Cook, talked about “massive change” coming to the auto industry. While Apple is still not divulging anything about its interest in vehicular space, the news are increasingly indicating that Apple is interested in a driverless electric mobility solution.

Nissan will be debuting its self-driving electric vehicle concept car at the Tokyo Motor Show.

While Google’s representatives have publicly stated that their fully driverless vehicles will be ready in 2020, Larry Burns, former GM Chief Technology Officer now consulting on Google’s driverless car project, said that the technology could be ready as a early as 2018.

Tesla’s Elon Musk has is also talking about full autonomy within three years. The timelines appear to be shortening. Tesla has launched its Autopilot using a software update. The State of California categorizes Tesla’s new tools as NHTSA Level 2 technology, which according to a DMV spokesperson means “helping drivers make better decisions”.  To discourage drivers from relying too heavily on its technology, “Tesla’s Autopilot is supposed to beep after about 10 seconds of hands-free driving to nudge drivers to grab the wheel again, and after being ignored it can sound louder warnings and turn the radio off”.  However, as has been witnessed by several videos posted on YouTube, not all Tesla drivers are heeding the advice of being in control of their vehicle.  And, therein, lies much of the problem with some of the autonomous upgrades to be released over the next few years. These systems due in the next few years are designed to take the grind out of the daily commute. But safety experts are concerned it will tempt some drivers to be distracted or check their phones. Insurers beware!

Delphi and Quanergy are teaming up to develop a low-cost (less than $1,000 US) LIDAR.

GM is declaring itself a leader in the autonomous vehicle technology space. Cadillac’s Super Cruise, the feature that launches next year, will allow drivers to remove their hands from the steering wheel and their feet from the pedals. CEO Barra disclosed that the company is working on a “creative” method for keeping the driver engaged in what the car’s doing in autonomous mode. No details provided.

Honda has announced it will put a “self-drive car on the road by 2020”. However, given the position of most automakers, it is likely that this vehicle will not be fully autonomous. In fact, Honda and General Motors are reportedly working together to develop driverless vehicle technology.

Also this last month, a task force, Securing American’s Future Energy (SAFE), was created to advocate for autonomous vehicles.  Members of the new task force include Larry Burns, advisor to Google, and Lynn Liddle, Executive Vice President at Domino’s Pizza.

Peugeot Citroen has begun trials of their driverless vehicle technology.

Positioning for competing in the new mobility ecosystem

Big moves in the mapping industry and Apple on the move.

Understanding the importance of maps to autonomous vehicle mobility, Uber acquired Bing Maps technology.

Audi, BMW and Daimler purchased Nokia’s mapping division, Here, for $3.1 billion US. This was a strategic acquisition as the auto manufacturers compete with Google and other tech giants for the mapping technology key to the commercialization of driverless vehicles. The auto manufacturers’ plan is to pool real-time data (example: information on icy roads). They insist Here will be run as an open platform to the benefit of all Here‘s customers.

Other reasons why the purchase of Here was important to the German automakers:

  • The auto OEMs can receive the licensing fees from major companies such as Amazon, Bing, Yahoo, Flickr, SAP, and Oracle that already rely on the Here mapping platform.
  • The deal will allow automakers to take control of user location data and monetize it through local advertising.
  • Mapping is essential to vehicle automation and it makes a whole lot of sense that automotive companies will want to have control of that information.
  • Shutting out Google and other mapping giants.

Delphi announced acquisitions (including automated-driving technology producer Ottomatika and Quanergy Systems, a company that develops light detection and ranging scanners enabling cars to locate objects and generate digital maps) enabling the company to better compete in the autonomous vehicle space.

TomTom and Bosch will be collaborating on the development of highly accurate maps for autonomous vehicles.

Recognizing the value of data and that future mobility will be controlled by data, car manufacturers are limiting the data they share with technology partners like Apple and Google.

In the last few weeks, we have witnessed more signs that Apple might be getting into the auto business. The tech giant has hired two individuals: Doug Betts (formerly Chrysler’s quality chief & SVP) and Paul Furgale (Swiss autonomous vehicle and robotics expert). Apple also hired a senior engineer Jamie Carlson from Tesla Motors, as part of Apple‘s effort to build a team of experts in automated driving. At least six others with experience developing self-driving technology and systems have joined Apple, according to their LinkedIn profiles.

Further potential evidence: Apple boosted its R&D budget by $1.5 billion. In addition, Apple representative visit to a BMW factory have fuelled rumours of a possible partnership between the two companies. Further, The Guardian claims to have accessed documents indicating that Apple engineers from the company’s “secretive Special Project group met with officials from GoMentum Station, a 2,100-acre former naval base near San Francisco that is being turned into a high-security testing ground for autonomous vehicles”. While no confirmation has been provided by Apple, the signs are indicating that the company is in fact working on the development of an electric, self-driving vehicle.

Microsoft has reportedly agreed to invest in Uber as part of a funding round that values the ride-hailing company at about $US51 billion.

Delphi Automotive bought Ottomatika, a Carnegie Mellon University spin-off that supplied software used to pilot the self-driving Audi across the US earlier this year.

The world’s largest automotive company by revenue is redefining its strategy regarding manufacturing and distribution of automobiles. Toyota believes the future of mobility for urbanites lies in covering distances between transit and destination (home / work). It therefore wants to rebrand itself as a public transport provider, not merely a vehicle manufacturer.

Hoping to grab a piece of the driverless car investment pie, Australia is gearing for autonomous vehicle trials. We learned that Audi could be preparing to test autonomous cars in this country. Meanwhile, in the UK, the government has released rules to get self-driving vehicles onto public roads.

In the US, a variety of stakeholders from numerous industries (including auto manufacturing, insurance and telecommunications) have come together to develop a “fake” city in Michigan for the testing of connected and driverless vehicle technology. Michigan is only one of the states looking to attract automakers and tech companies to undertake testing of driverless vehicles. Virginia, Florida, Nevada, Texas and California are but some of the states all vying for a piece of the R&D pie.

In the last month, it was revealed that Google set up Google Auto in 2011. The company is a licensed auto manufacturer. The company’s self-driving vehicle technology is being tested in Texas. Google sees several benefits to doing this, including testing in a new environment with new challenges, being exposed to viewpoints beyond those of Silicon Valley and a relaxed regulatory environment with no reporting requirements.

The CEO of SNCF, the French railway company that runs the high-speed TGV has stated that he wants the company to offer door-to-door mobility services: “We can’t just provide trains; we have to consider those last few miles people want to travel as well. So we want to offer bikes, electric cars, car sharing, carpooling, light rail systems.”

Also from France, Ségolène Royal, the Minister for Ecology, confirmed driverless vehicles would soon be tested on France’s roads and highways.

Photo: Here

Will Apple revolutionize mobility?

The rumour is deafening. Despite Apple’s notorious shroud of secrecy, journalists, automotive manufacturers and financial specialists are speculating on what increasingly appears to be Apple’s foray into the world of mobility.

The rumour is deafening. Despite Apple’s notorious shroud of secrecy, journalists, automotive manufacturers and financial specialists are speculating on what increasingly appears to be Apple’s foray into the world of mobility.

What we have read and heard?

A few weeks ago, the curiosity of journalists, bloggers and analysts was peaked by “mysterious” Apple vans that were spotted in San Francisco and New York.

Then, more news surfaced about Apple being in talks with automotive suppliers and that the organization is working on an electric self-driving vehicle.

Apparently, Apple has been on a hiring spree and Steve Zadesky, a 16-year Apple veteran who was instrumental in the development of the original iPod and iPhone, is leading Apple’s automotive research lab, Project Titan, located in Silicon Valley outside the company’s Cupertino campus.  According to Business Insider, Zadesky “has been given permission to assemble an 1,000 person team to work on Apple’s car”.  Moreover, we learn that Zadesky “has been making trips to Austria” in relation to the project. Several writers have connected these visits with Magna Steyr, a century-old but little-known Austrian brand-independent engineering and manufacturing partner for OEMs, which has produced more than a million vehicles for BMW – including the BMW X3, MINI Countryman and MINI Paceman – and also produces the Mercedes G-Class at its plant in Graz”.

And, just in case there was still doubt in the minds of some, the company has officially expanded its corporate description in several countries and Apple is now an official manufacturer of: “Apparatus for locomotion by land, air or water; electronic hardware components for motor vehicles, rail cars and locomotives, ships and aircraft; Anti-theft devices; Theft alarms for vehicles; Bicycles; Golf carts; Wheelchairs; Air pumps; Motorcycles; Aftermarket parts (after-market parts) and accessories for the aforesaid goods”.

Will it be a car?

Apple’s hiring of battery experts has led many to believe that Apple is developing an electric vehicle. A Financial Times article stated that Tim Cook   “has  made  it  clear  that  the automotive industry is an area in which he feels Apple can make a greater impact”. According to this same article, at a recent Goldman Sachs technology conference, Cook said “CarPlay was one of three new technology platforms Apple launched last year that are key to [Apple’s] future, alongside HealthKit and HomeKit”.

With CarPlay, Apple is already involved in the automotive space but the recent attention paid by the heads of some of the world’s leading automotive manufacturing companies at the recent Geneva auto show, would lead us to believe that Project Titan is about more than infotainment.

Given that driverless is where Silicon Valley and most auto manufacturers are headed, it would be safe to assume that Apple also sees the writing on the mobility wall. A source familiar with the matter told Reuters that Apple is “studying the potential for a self-driving” vehicle.

But is Apple designing a driverless electric vehicle to sell to the masses? We think not. Here’s why:

  • Traditional auto manufacturing generates significantly slimmer margins than what Apple and its shareholders are used to (Apple’s gross margin for the fiscal year ending September 2014 was 40%). Even if the driverless electric vehicle is priced at a premium, it may prove difficult to achieve the same level of profitability as Apple has experienced with its current product line. Think Tesla.
  • The success and rapid adoption of ride sharing and car sharing are demonstrating that urbanites thirst for a new mobility offering that allows them to avoid car ownership (remember, personal vehicle utilization is only 4%). And, as urbanization continues to grow, so will this trend.
  • iPhone sales generate the lion’s share of Apple’s profit. The large majority of the iPhones in use today have been placed in the hands of consumers through contracts with telecommunica-tions providers that allow them to access the high-margin product through a term contract with monthly payments that bundle telecom services and the product. That’s a model that has made Apple billions!
  • Now, imagine gaining access to mobility on demand, Apple style, where an Apple electric driverless vehicle picks you up when you need one and delivers you to your destination.  A term contract provides membership to the service as well as a maximum number of km of travel in an Apple mobile environment, whether that be solo, in an Apple pool with a couple of other users or in a larger bus-like vehicle. Free WiFi within a user environment designed by Jony Ive, which means that it would be seamless even for a five-year old. You plug in as soon as you get into the vehicle that the creative geniuses at Apple have designed and you work, relax or simply enjoy the carelessness of getting to where you want to go without any of the hassles associated with car ownership.Apple-on-demand

While some will be able to afford to own such Apple-mobiles, the large majority will use them as a service, paying a monthly fee that will bundle all their transportation needs and possibly more …much like paying a monthly fee to gain access to the iPhone and the telecom services that accompany it.

Can / Should Apple do it?

Apple is the world’s most valuable company. With a market capitalization of $750 billion, Apple is worth more than Daimler, Volkswagen, Renault, Peugeot, Fiat Chrysler, Ford and General Motors put together. Despite its success, the company needs to continue to generate profits and shareholder value, potentially branching out to new industries. The transportation industry is ripe for change …change that Apple can benefit from.

Consider the following:

  • The company is reported to have $178 billion in cash – an amount that would allow it to establish itself in the new mobility industry.  Apple is already attracting top experts in the field with $250,000 signing bonuses and significant compensation increases.
  • Tesla has certainly proven that a newcomer to this high-barrier-to-entry industry can create superior vehicles that leave most salivating.
  • With CarPlay, Apple is already in the automotive space. So, in the short term, the company may continue to improve its CarPlay offering and develop infotainment solutions. Infotainment can spread to other areas within the vehicle: Human Machine Interface (HMI), ergonomics and controls, etc. Leave it to Apple to make a user experience feel seamless and easy.Apple_car-play
  • As electronics and code become an increasingly important part of the vehicle, particularly with fully driverless technology (it is estimated that software will represent over 60% of the value of the driverless vehicle), Apple’s strength in designing electronics that provide a new and unique user experience would provide the company with a strong competitive advantage. As Morgan Stanley’s analysts explain, “Apple has the brand and the design talent to take on the best in the traditional auto industry and it can rely on the existing automotive supply chain for non-critical components”.

If we are to believe what has been discussed over the last few weeks, by 2020, we should see the fruits of Apple’s labours.

Hold on to your seats because Apple will be disrupting mobility.

 

Photo : Andrey Bayda / Shutterstock.com

 

What will the Apple vehicle be?

Over the last few days, we have seen and heard countless articles, blog postings and discussions regarding Apple’s entry into the mobility space.

Over the last few days, we have seen and heard countless articles, blog postings and discussions regarding Apple’s entry into the mobility space. There are certainly more questions than there are answers but one thing is certain: if Apple, a company renowned for its secrecy, did not want the world to find about its activities and interest in this space, we would still be in the dark. It all started a couple of weeks ago when “mysterious” Apple vans were spotted in San Francisco and New York.

Then, more news surfaced about Apple being in talks with automotive suppliers and that the organization is working on an electric self-driving vehicle. Apparently, Apple has been on a hiring spree and that Steve Zadesky, a 16-year Apple veteran who has instrumental in the development of the original iPod and iPhone, is leading Apple’s automotive research lab located in Silicon Valley outside the company’s Cupertino campus.

Apple already has its foot in the automotive industry with CarPlay but the development of a vehicle by this innovator with $178 billion in cash is something that has pleased many of those who know that if anyone can create an entirely new vision of mobility, it’s Apple. And, according to news reports from this week, we will not have to wait long as it appears that targeted vehicle production is 2020.

 

Photo : Claycord