Automakers Should Have Serious Concerns About “Apple Car” Instead Of Tesla

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While Tesla has shocked the auto industry with almost 400,000 paid reservations for the upcoming Model 3, Apple is spending billions on R & D and has multi-billions more to burn freely on a car or whatever form of service the name “Apple Car” becomes. Tesla will always get credit for being the company that inspired long-range, all-electric vehicles and state of the art software innovations. But, the company has no money and will not make money for a long time.

Apple has $153 billion cash on hand. This is enough to hire all the right people, build vehicle factories, battery factories, or even buy Tesla or any number of other automakers or transportation companies. The top 14 automakers worldwide combined have less money than Apple. For those that don’t see Apple following through with building a car, Apple Car or iCar may be an all encompassing name for Apple mobility and transportation services.

Katy Huberty, tech analyst at Morgan Stanley, took notice of Apple’s recent huge R & D spending spike. She concluded that Apple will own 16% of the global shared mobility market by 2030. This would generate another $400 million a year for Apple to toss around. This is all because Apple has spent $4.7 billion extra in the past three years, with no monumental product release to match it.  In comparison, Apple spent $1 billion in advance of the iPhone and iPad and $2 billion proceeding the iWatch.

Much talk has been geared toward Apple building its own car, or doing so with a partner. However, Apple doesn’t make its own phones or other products. Outsourcing a car wouldn’t be much different. The Apple Car brand name could appear on anything Apple builds, outsources, or acquires that is transportation related.

Apple’s recent $1 billion investment in China’s Didi Chuxing (the country’s largest ride-sharing company) sets up competition with Google as well. Google is invested in Uber, Didi’s top competitor. Google and Apple are both working to take over the world of tech and to disrupt the market in doing so. A world of less ownership and more subscription-based services seems to be the primary goal.

Not only are analysts and fanboys taking notice, but major automakers are making great strides to get ahead and trump the situation. General Motors recently invested $500 million in ride-sharing company Lyft as well as acquiring autonomous car start-up Cruise Automation. Toyota is now investing in Uber and Volkswagen in Gett. These are just a few examples of the myriad of automaker’s movement toward shared and autonomous.

Apple is obviously working on something substantial. There are too many facts and rumors pointing to it. The company has been extremely successful with marketing and financial management. Whether Apple Car is an actual car built solely by Apple, a joint effort with other companies, or simply a multi-faceted transportation service provided by Apple, it is not to be taken lightly by the competition.

Source: Forbes

1 Comment on Automakers Should Have Serious Concerns About “Apple Car” Instead Of Tesla

  1. DASH attendees have been buzzing about this for the past two conferences, as details about these platforms have come to the surface. The conditions that motivated both of these tech mega-companies to develop automotive ecosystems are very clear to those of us who follow this space closely.

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