Apple is a very, very powerful brand. It is also a very, very big company with a market capitalisation of over $700bn ($740bn when I just checked – and that’s the biggest valuation ever of any publicly listed company). Apple and Google are, it is plain to see, two very modern advanced tech companies who are head-to-head in the personal connectivity space. The cell phone though, is more than just a handy gadget or device. It’s a lifestyle thing and these two companies are busy exploring further opportunities to embed themselves in our lifestyles with killer apps of one sort or another. Health and transportation seem to be the latest focusses for lifestyle opportunities.
The time spent in an automobile is certainly one obvious area for personal connectivity battles to play out and represents an important opportunity for both of them. It’s not simply a matter of the car’s connectivity operating system to consider. These two companies, remember, are seeking to grow. They have vast R&D resources and will be looking at how things like transport and personal mobility are changing and how they address the evolving space. How are people going to be moving around in the future? Google has put some considerable resource into advanced autonomous vehicle technologies and even developed some interesting prototypes.
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Would Apple explore the transport space further? Of course it will, if only to be clear on the scope of possible future opportunities and what makes good business sense to put further resource into and what is best avoided. A bunch of people will be tasked to look into a strategy for the transportation space. How can Apple grow and best address that space in the future to maximise profit in a way that reinforces the whole brand proposition to the consumer? Just how would a company like Apple go about grabbing value in the evolving automotive or transportation space? I suspect there is a lot more to consider than simply the connectivity operating systems in future cars.
So, reports that an ‘Apple car’ is being looked at are not surprising. Apple is a company that is not stranger to sub-contracting manufacturing either, so that’s an interesting thought. But I’d be cautious about the speculation and some of the reporting and rumours. I’d guess a lot of research and thought will go into what Apple might do and how it might address transportation in its strategy for growth. If the ‘Apple generation’ don’t like to own things (they like to stream music, are less interested in owning cars, more into sustainable transport and so on) then Apple might be interested in considering the evolving market for integrated transport solutions – which might include car sharing rather than owning.
I suspect there is a team of people working on all options, including the feasibility of making an Apple-branded car. Ultimately though, maybe Apple will lend its brand to a new car sharing (or integrated transport) solution with an automaker partnered in a joint venture to produce a special car for that (remember the Swatch car idea that became Daimler’s Smart – an interesting history and case study). Whatever strategic path Apple eventually goes down in addressing the transportation space, I’d expect it to contain some innovation and ‘cutting edge’ appeal. From the vantage point of Cupertino the automotive industry must look dauntingly huge, and yet pretty old-fashioned and low-margin. Tesla shows what an agile new company can do.
There’s a huge opportunity ahead and a part of our everyday life that a brand like Apple can’t ignore. It’s a strategically very important question for the company’s long-term growth. Expect more media reports and rumours to leak out. I would caution though, that there is likely to be an exhaustive exploration of all options before any hard decisions are taken on a preferred strategy. If the Apple car is as far down the track as some reports have suggested, we’d have probably heard more by now.
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