Mobile Forward

Toyota Inks Deal for Telenav In-Car Navigation, Drives Away From Google and Apple

Mark Bergen, for Recode:

Earlier this year, Toyota spelled out what many car companies were thinking: It would rather have its own software inside its cars than software from Apple and Google. On Thursday, it took another step to box out the mobile giants.

The Japanese carmaker signed a deal with two auto tech companies, Telenav and UIEvolution, to equip some 2016 models with a dashboard navigation system linked to mobile phones. It works with both iOS and Android. But, according to the software partners, the system doesn’t wrest control from Toyota, a rising concern in the auto industry as Apple and Google promote their connected dashboards. […]

[ Part of the desire for software control comes from] the very real concern from carmakers that surrendering control of in-car experiences to mobile companies would render them useless. […]

Ford CEO Mark Fields articulated this concern in an interview with Re/code in April: “At the end of the day we don’t want to end up as the handset business.”

I sincerely hope auto makers’ ability to create high-quality software matches their desire for control. Soon.

Apple Reportedly Negotiating to Use BMW i3 as Basis for its Own Electric Car

Jordan Kahn, for 9to5Mac:

Apple and BMW have engaged in negotiations over Apple’s interest in using BMW’s i3 electric cars as a basis for its own electric car project, according to a new report from German publication. […]

Apple executives recently met with BMW in Leipzig, Germany to visit the carmaker’s i3 production line. Apple is allegedly interested in the carbon fiber body of the i3, according to the report.

If this is correct, let’s consider the possible extent of this relationship. The two relevant terms above are basis and carbon fiber body. For a moment, let’s consider what basis implies, rather than be limited by the mention of the carbon fiber body.

Basis could refer to one or more of the following:

  • Chassis / wheelbase
  • Carbon fiber frame
  • Carbon fiber body
  • Powertrain
  • Steering / braking
  • Suspension/stability elements
  • Technology or process related to the above*

So, basis covers a range of technology areas. The actual Apple-BMW relationship may be much more focused, because of the potential rivalry between an Apple Car(s) and BMW cars. The arrangement might indeed be limited to the carbon fiber body technology or process*. There’s really no way to tell at this point.

We can probably exclude, however, elements like the cabin interior, batteries, most electronics, sensors, computers, transmitters/receivers, user interfaces, and most software. These are areas for which Apple likely has a unique vision (e.g., the interior and related interfaces) or unique technology (e.g., the car operating system or its batteries, perhaps).

If BMW and Apple reach an agreement, the likely benefit to Apple would be:

  • Engineered and tested high performance components.
  • Indirect access to an automotive manufacturing base.
  • Indirect access to an automotive supply chain.

Even within the context of a specific area (e.g., carbon fiber technology or process*) it’s not clear if BMW would simply be a supplier/competitor (like Samsung), or if BMW and Apple will co-develop any future technologies in the area. It would be reasonable to assume that the competitor aspect precludes any co-development. That’s just playing the odds; reality may differ.

More interesting than scope and benefit of such an Apple-BMW deal is the question of “why”: Why would Apple work with BMW? If the rumor is correct, then Apple’s objectives may be to:

  1. Re-use parts or sub-systems in areas where it can’t add value today.
  2. Maximize the odds that the car will be ready by Apple’s target launch date, rumored to be 2020.
  3. Reduce development costs. (I’m including manufacturing set-up and supply-chain configuration in this.)
  4. Accomplish the above with a partner that delivers high quality components.

It’s likely that Apple would compensate BMW by licensing the process* or technologies it uses. And, potentially, Apple may provide capital for related tooling and manufacturing capacity, if BMW-related facilities are involved.

As we consider the mix of Apple’s own capabilities, along with capabilities it sources from current suppliers, and new capabilities that it will need to buy or license, it’s worth asking: what is the minimum viable product that Apple would consider launching? Meaning, what jobs or problems does Apple want to address with its car, and what level of performance does it want to reach in the first version? … If or when it launches a car.

At this point, we don’t know what we don’t know. It’s likely that other developments will surprise us in the future. But this is exciting to think about, quite honestly. If you have other thoughts, I’d love to hear them.

______

*Added this to clarify that Apple would not necessarily use “as-is” elements from BMW. Got the idea to clarify that after a spot-on Tweet by Horace Dediu, who runs and writes Asymco.com and works at the Clayton Christensen Institute.

Car Prototyping Moves from Workshop to Digital Simulation

Andy Sharman, for the Financial Times:

Digital prototyping could also help bring down the industry’s glacial development times as carmakers try to keep up with new rivals from Silicon Valley, such as Tesla, Google and, potentially, Apple. Rapid prototyping, used by tech companies, helps them bring products to market much faster than the four years it typically takes a car to get off the ground.

“The Apples and Googles […] have a completely different approach to how to develop a product,” says Daniel Hirsch, a manufacturing expert from PA Consulting.

The phrases “bring down […] glacial development times” and “completely different approach” caught my attention.

The Future of the Electric Car Depends on Battery Breakthroughs

Noah Smith, for BloombergView:

The one thing that might make a big difference is if electric cars get really long ranges and can be driven all day at highway speeds without stopping. In that case, electric cars won’t even need charging stations and can bypass the hurdle of creating the network effect. At that point, the network effect between gas-powered cars and filling stations would start to work against gasoline, just as Ralston predicts.

So as I see it, the near-term future of the electric car depends crucially on battery breakthroughs that allow very long ranges. As to how close we are to those breakthroughs […] you would have to ask a technologist.

Yes. So from a car-maker standpoint, a key requirement to electric car success will be battery know-how. And car know-how. Tesla has both. Google is working to get both.

Apple? Well, you might have heard people cite Apple as one of the biggest camera sellers in the world, and it’s true, of course. What they don’t often cite, though, is that Apple is also one of the biggest battery sellers in the world. As a device maker, it’s very interested in long battery life. And as a device maker that ships hundreds of millions of batteries, it’s very interested in cost savings. Both of those drive Apple’s investment in battery R&D. Additionally, Apple has hired engineers from at least one electric car battery maker. So, back to battery know-how and car know-how. Apple likely has the former, and signs of the latter appear day by day.

Of course, beyond car know-how and battery know-how, other capabilities will be important, too. More on that at another time.

The Importance of Security and Privacy in the Future of the Car

Nick Statt, for CNET:

“These [US Senate report] findings reveal that there is a clear lack of appropriate security measures to protect drivers against hackers who may be able to take control of a vehicle or against those who may wish to collect and use personal driver information,” the report reads. […]

Hackers no longer need a direct connection to the vehicle [because] malware from Bluetooth-connected smartphones and security holes in onboard software, like OnStar, provide numerous avenues to take control remotely. Because examples of hacks happening to everyday drivers remain largely undocumented […] automakers are not taking them seriously. […]

[Also], automakers are constantly gathering information about drivers, including locations traveled to and how long the car remains parked. Companies then store that data with little protection, sometimes even in third-party data centers whose own security may not have proper safeguards. The report said automakers rarely inform consumers about the information they’ve collected.

Sounds like an opportunity to think different.

Rumored Apple Auto Project is Now Rumored to be Siphoning Staff from Other Divisions

Shaun Nichols, for The Register (below). Take it with a grain of salt. Still interesting to consider, though.

Apple is investing significant resources into a car-related project, so much so that it’s been reassigning employees from other divisions, insiders claim.

Sources familiar with the matter told [The Register] that Apple has shifted so much staff towards its auto division that senior managers in other divisions are complaining about the loss of talent from their teams.

Remember, sometimes sources aren’t that great – see here.

Apple: Five Reasons to Build a Car, Says Bernstein, But No Certainty They Will

Ray Tiernan, at Baron’s Tech Trader Daily, summarizes a new research note by Tony Sacconaghi at Bernstein. Sacconaghi gives five reasons for why Apple might build a car:

  • It’s a trillion-dollar market;
  • The company’s never shied from entering new markets;
  • Tesla (TSLA) has already done a lot with very little capital;
  • Apple’s always gotten a large share of profit even where others have low margins;
  • Apple may be able to leverage rising auto production capability in China.

Sacconaghi goes on to say, however, that:

We are more optimistic about the possibility of a car than we were initially, but underscore that a lot can change and the timeframe is certainly not imminent.

All five reasons are somewhat valid, but also somewhat “business-y”, in the sort of way that Ballmer-era Microsoft pursued profit without a fundamental understanding of the products that would delight consumers. What’s lost is the notion that Apple doesn’t pursue “a market”. It builds a product if it thinks it can make it meaningfully better and satisfy a lot of people. The way Saconnaghi expresses it, it might as well be a numbers-based targeting exercise. (Many companies can “target”, few can execute.)

So on points like the “trillion-dollar market” aspect: I’d think of it as “A car is a high-value item for many, many people. It performs several important jobs for them, often daily. It also has has an affinity for a wide range of devices and services”, rather than expressing it in dollar terms… Internet routers might be a “trillion dollar business”, but that’s not (quite) as relevant here. On the “jobs” aspect I mentioned, I’m very grateful to Horace Dediu for his terrific thinking on this, and his in-depth, car-specific podcast on the topic (here).

On the “never shied away… new markets” aspect: Again, only if Apple believes they can move the product forward, meaningfully.

I’ll provide my perspective on this soon. If you didn’t catch one of my posts yesterday, I’m heads-down with research on basic market and competitor data (not car-specific).

Finally, if you didn’t expect that cars would be a relevant topic for this site (Mobile Forward)… I’m happy to exceed your expectations! “Mobile” covers a lot.

Mobile Forward

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