#AppleCar #Apple - “Detroit vs. Everybody” is a popular T-shirt in the hometown of General Motors and Ford these days.
Yet it might as well read “Silicon Valley vs. Motor City” as the San
Francisco Bay Area emerges as a center for transportation innovation.
That was brought home last week, when people familiar with the matter
said Apple is developing an electric vehicle and using several hundred
people on the secretive project.
“It’s the hot spot of development, and that has in a big way spilled
into the autos space,” said Jeff Schuster, senior vice president for
forecasting at LMC Automotive. “These are the new suppliers, these are
the new auto companies.”
Silicon Valley companies are getting into transportation, from cars
to drones to space ships — and pioneering new business models in the
industry besides. Google is investing in self-driving cars, drones and
satellites. Facebook, too, has been working on drones.
Elon Musk — who spends time in both Silicon Valley and Los Angeles —
is building Space Exploration Technologies, which is designing and
manufacturing rockets and spacecraft. Musk’s other high-profile venture,
Tesla, is shaking up the electric-vehicle market. He also has an idea
for superfast pods — called a HyperLoop — to run between cities like San
Francisco to Los Angeles.
Meanwhile, Uber Technologies, the mobile car-booking company based in
San Francisco, is changing the way people move around major cities and
has a valuation of $40 billion, more than double the market value of
Fiat Chrysler Automobiles.
Startups include RelayRides, which enables users to rent out their cars, and Flywheel, a taxi-hailing app.
Driving the Silicon Valley companies’ interest in transportation is
how much the industry might be ripe for disruption and new technology.
Plus, companies like Apple, which has a $178 billion cash hoard, can
afford capital-intensive projects.
“If you look at our lives, cars are still an area that haven’t
fundamentally changed in 100 years,” said Gene Munster, an analyst with
Piper Jaffray. “When technology people think about opportunities, they
think about what we use every day that hasn’t changed over time.”
Traditional automakers, of course, aren’t ignoring technology. Many
are working on driverless cars and have opened Silicon Valley offices.
“We’re getting into the software-defined vehicle phase,” said Thilo
Koslowski, vice president and automotive-practice leader at Gartner.
“All of a sudden it’s not just up to the traditional car manufacturers
anymore. It’s up to those companies that have a lot of expertise in
innovation capabilities on the IT side.”
The revelation last week that Apple is working on an electric vehicle
came as a surprise in Detroit. Engineers are marveling over Musk
recently telling Bloomberg Businessweek that Apple was offering $250,000
signing bonuses in an effort to poach Tesla workers.
Apple’s car project is being headed by Steve Zadesky, vice president
of iPhone product design, a person with knowledge of the matter has
said. But Apple often tests ideas that don’t get released, the person
added.
The project is code-named Titan and the vehicle design resembles a
minivan, The Wall Street Journal reported on Friday. Some Apple
executives have flown to Austria to meet with contract manufacturers of
high-end cars, the report said. Apple technology may lend itself to an electric car. Apple has long
researched battery technology for its iPhones, iPads and Macs.
Mickey Drexler, an Apple board member and head of J Crew Group, has
said that Apple co-founder Steve Jobs had wanted to build a car.