How does Apple Car threaten Tesla and the global automakers?


Leaving the shadow of a purely automaker, Tesla was dubbed the “Apple of the auto industry” for the vast amount of technology in electric cars.

The global self-driving car industry is valued at $ 8,000 billion. Photo: AFP

Compete and lead

But the move Apple negotiated with Hyundai-Kia’s automotive alliance South Korea on the development of Apple-branded electric cars, putting Tesla and many other automakers around the world under great pressure. Analysts say that once Apple embarks on making electric cars and even autonomous cars, the impact on the global auto industry is complex.

Apple is known as a private technology corporation with very little information about the development of its own car brand “Apple Car”. In the past, when the “giant” US technology entered new fields such as phones, smart watches, music, streaming content, etc., there was considerable pressure on the “big guys”. in the same industry, forcing them to adjust products and interfaces to suit tastes and consumer trends. For “Apple Car”, the pressure on the “big” auto industry may not be different.

Michael Ramsey, Vice President of Automotive and Smart Mobility at Gartner Global Research and Consulting, said: “There’s no doubt that Apple’s entry into the auto industry puts pressure on. businesses in the rest of the industry, forcing them to enhance the user experience “. According to the expert, all of Apple’s ecosystem “can be seamlessly integrated into the Apple Car”, something no other company other than Google can do.

“This also means that competition in the industry will increase. This is the bottom line,” said Stephanie Brinley, auto market analyst at IHS Markit Financial Information Company. “And this is also a competition that attracts a lot of capital if they (Apple – BTV) decide to do this (electric car – BTV)”, Mrs. Brinley said.

According to Bloomberg, the talks between Hyundai-Kia and Apple have “halted”, but the impact of Apple developing electric cars on the auto industry is still enormous, regardless of the company. shaking hands with Apple to produce this vehicle.

Earlier, CNBC, citing well-informed sources, said that the Apple electric car is expected to be produced by 2024 at a Kia plant in Georgia, USA, although the implementation plan may eventually be delayed. The source also added that the two sides have yet to reach an agreement on electric vehicle development, but stressed that Apple may decide to partner with another car manufacturer or choose the Hyundai-Kia alliance.

Penetrating the auto industry, Apple has a huge advantage in already having partnerships with car manufacturers around the world by offering Apple CarPlay – an application that essentially “magnifies” the iPhone. car infotainment screen.

However, making and marketing a car, even with the Hyundai-Kia alliance, is in fact not as easy as penetrating other consumer goods segments. Cars are capital-intensive with a long operating life, while safety regulations are stricter and profit margins are much lower than those in consumer electronics.

“It won’t be easy for Apple to enter the auto industry. This is a very complex field and it won’t be easy just because it’s Apple,” said Ms. Brinley.

Self-driving cars are still too difficult

In order for profits to reach the level that Apple normally achieves in the consumer electronics segment, the first car Apple is expected to “launch” will be a self-driving car. That is, the design of that car is not for human control, but it is operated by a computer with sensor system and radar to observe the surrounding environment and handle the situation in time.

Autonomous vehicles have become promising over the years, but except for fleets of cars equipped with autonomous technology, developed by Waymo Corporation of Alphabet Inc. (USA) – parent company of Google, those pursuing this segment like General Motors, Uber, and Lyft all missed or completely abandoned their target because of too many difficulties.

As for Apple, the “Apple Car” project is also known as “Project Titan” and was developed many years ago. In 2017, this American technology company was licensed to test autonomous cars in California, but only stopped at adding Apple technology to pre-made models of other manufacturers, such as Lexus crossover model.

Human-driven driving is actually not too complicated, but human factors like pedestrians, cyclists, drivers, plus other “dynamic” factors in the environment. Like animals… unpredictable. Therefore, it is extremely difficult to program software to help vehicles respond safely in all situations, making developing autonomous vehicles a big challenge.

Mr. Sam Abuelsamid, an analyst at Navigant Management Consulting Company, Illinois (USA) said: “The most basic driving skills like walking straight on the road or cornering are not too difficult and that is not The things that get people in trouble. Trouble only happens when you get into unusual situations, rare cases are rare. ” According to this expert, Apple has the financial resources and expertise to develop such a system, but this is still a difficult project.

Mr. Sam Abuelsamid predicted, oh The original Apple car may not be for immediate consumers, but for service businesses such as delivery and ride-hailing in certain markets. These are also areas that many businesses developing autonomous vehicles are targeting.

“It will not be a popular product, but a high-end, Apple-specific product because the consistency at Apple is that in any product, they aim to create important value and billion. high profit margins, “said Mr. Abuelsamid. However, “the auto industry has long been a low-margin business,” he said.

Market potential of trillion USD

But that’s about the traditional car industry, and the profitable potential of the autonomous car segment for delivery and ride-hailing is huge, because autonomous vehicles cut the most costly part of the car. Car manufacturers – the category of physical driving, which means allowing automakers to increase profits. Last year, Cruise, a subsidiary that develops self-propelled cars with a majority stake in General Motors, valued the self-propelled car industry at $ 8,000 billion.

And Ms. Katy Huberty, CEO of technology research and data division of Morgan Stanley International Financial Group, forecasts that the global automobile and mobile market even surpasses $ 10,000 billion. “Total demand for products (TAM) of smartphones is about 500 billion USD per year, while Apple is accounting for one third of the market share. And the mobile market has a size of 10,000 billion USD, so Apple will only need to win 2% market share will be equivalent to the size of the iPhone business, “Katy Huberty said in a report published last month.

The plan is still unknown exactly about development of Apple’s automotive, except the possibility of partnering with the Hyundai-Kia automotive alliance to produce its own car. Apple’s traditional business model is to sell end products to consumers, but the technology group’s movements over time show that they are turning the wheel to develop services to reduce dependence on business. sales numbers as before.

“Looking at Apple’s ability to make cars, I’ve always been a huge fan,” commented Michael Ramsey, vice president of Gartner, a global research and consulting firm. “I love that idea (Apple car development – BTV). I see if cars become consumer electronics, the way smartphones and other devices are now powered by batteries.” and updated by software, then Apple should be in the industry, “he said Ramsey said.

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