When should Apple fail?

A tech giant and its continued failure to build a car

What is Apple doing wrong that simply no automaker is willing to provide a wheeled pedestal for a highly automated electric vehicle? A search for clues.

Apple launches a car. This sentence has been written so many times that one is inclined to believe it. But the computer giant from Cupertino has not yet confirmed the Titan project, which was rumored by many insiders. At the request of the NZZ, Apple does not want to comment on the subject.

In any case, the fact is that Apple has been employing experts since 2014 to build a car that is as fully automated as possible. You couldn't hide this in Silicon Valley. Not even the fact that Apple developer Doug Field, who had worked for the electric car pioneer Tesla for a while, returned to Cupertino in 2018 to oversee the vehicle project.

His first act in 2019 was to lay off 190 chassis experts to instead focus on a car's superstructure with other vehicle operating system professionals. From this it can be concluded that Apple does not believe in being able to produce its own vehicle platform for an electric car with partially automated functions. This would include the chassis and drive components such as electric motors and batteries. The development phase is too protracted.

So - at least that is what analysts who are particularly familiar with Apple claim - the manufacturer of the Macintosh and the iPhone is looking for partners in the auto industry. Rumor has it that names like BMW, Nissan, Stellantis and that of the startup Canoo, which was founded in 2018 by former BMW and Opel managers, were mentioned.

The South Korean auto company Hyundai recently confirmed that talks were being held to build a joint vehicle. The Korean newspaper "Dong-a Ilbo" wrote that Apple plans to invest 3.6 billion dollars in the Hyundai sister brand Kia. The analyst Ming-Chi Kuo of TF Securities - he is considered one of the most reliable Apple experts - claims to have learned from suppliers to the computer giant that the Apple car will use the new Hyundai electric car platform E-GMP.

Apparently Kuo knows more. He recently said on “MacRumors”: “Apple's close cooperation with existing manufacturers such as the Hyundai Group, General Motors and Peugeot Citroën PSA will significantly shorten the development time at Apple. They have extensive experience in the development, manufacture and homologation of vehicles. We believe that Apple will use these resources to focus on developing hardware and software for autonomous driving. "

Kuo also sees the areas of semiconductors, battery technology, outer skin and space utilization as Apple's strengths in such a project. In addition, there are new types of user interfaces and the integration of Apple's existing ecosystem.

Koreans get out

That all sounds very plausible. But Hyundai withdrew from the talks in early February without giving reasons. To experience this would be the really exciting thing. If you ask the car manufacturers, they remain silent. "We do not provide any information about plans from other companies," it says throughout. Apple itself even negates the existence of a car project. That was expectable.

If you take a closer look at the undertaking, there are probably at least two reasons why the group of car manufacturers for a perfect Apple iCar is getting smaller and smaller: For example, there is Apple's premise that the iCar - or whatever the vehicle should be called - to build in North America. This leaked through at Kia, as well as the expected request from Apple to keep hardware and software from its own production under its own sovereignty.

The last gold treasure

This plausible consideration lays the groundwork for one of the most important reasons automakers are finding it so difficult to partner with Apple. Not only hardware and software from Cupertino would be inaccessible, but also the user data generated with it.

Data accumulates in cars from the first kilometer of their use. Be it GPS data, which can be used to collect geographic data, or the driver's personal preferences when it comes to infotainment or when using the app. When it comes to the data, connoisseurs speak of the “last treasure of gold” still to be found. There are no limits to the marketing of favorite music, food, reading or shopping portals. The personal data remains the property of the user, but he generally agrees to the anonymized disclosure to the car manufacturer.

The big data octopuses increasingly include computer giants. Google, for example, has already developed an operating system for automobiles with which a great deal of user data can be accessed. Certain manufacturers have already recognized the danger and are working on their own operating systems, but corporations such as Volvo / Polestar, Ford and Stellantis are already allied with Google. In this respect, the race to raise the gold treasure is still taking place without Apple. Another reason why a vehicle should be one of the great desires in Cupertino.

A second important reason lies in the design of a partnership between an electric car platform supplier and Apple. As Stefan Bratzel, Head of the Center of Automotive Management (CAM) in Bergisch Gladbach, suspects, the difficulty in finding possible partners is due to Apple's self-image: “If Apple does something, it's an Apple product from start to finish »Says Bratzel. “This is what Apple demands. Everyone who works there are, so to speak, second and third tier suppliers. And that is in stark contrast to the way automakers define themselves based on history. Car manufacturers enter into horizontal partnerships with other manufacturers, but not with Apple. "

Fear of demotion

This can also be seen in the latest episode with Kia. From within the Hyundai group it was learned that the Korean group feared a collaboration with the strongest brand in the world. A Kia logo would hardly have found its place on the front of the Apple car. Apple's reputation is growing, Kia is just the supplier nobody is talking about. The same can be heard from Nissan, where, according to the "Financial Times", there was a falling out with Apple over the branding of the joint electric car.

But who else could be considered to build an Apple car? Two possibilities emerge. Magna, as a manufacturer of entire vehicles, for example for Jaguar Land Rover and others, would be a suitable supplier who does not want to be in the foreground with its own brand. “A supplier like Magna with the entire vehicle expertise, which is also strong in the USA and Canada, could go there,” says Bratzel.

Anja Schulze, head of the Swiss Center for Automotive Research (Swiss Car) at the University of Zurich, agrees. "All other car manufacturers have their network of suppliers that has developed over the last almost hundred years, and have thus created a position of power for themselves," she says. «And now suddenly there is a career changer. The automakers do not want a power shift. With Magna, on the other hand, that wouldn't be a problem. "

According to Bratzel, a second variant would be “a weak manufacturer who is happy to receive orders. That could be a Chinese. " It was recently noticed that the Chinese Apple supplier Foxconn is already working with the car companies Geely and Byton for the production of components.

In any case, car companies that have already agreed with Google on the use of Android Automotive as the operating system are out of the question for the partnership with Apple. For Ford, Volvo, Renault and Stellantis, Apple is not a possible partner.