Computer industry statistics get more telling every day. Did you know that the annual smartphone market ($400 billion) overwhelms the market for new personal computers ($266 billion)? Now consider why another market, the automotive one, attracts a company like Apple. The auto industry in new car sales alone makes four times the smartphone category.
When you’re the world’s most valuable company, you can sniff around in a lot of different corners, and at the moment Apple’s cash holdings ($179 billion) are 20 times the annual capital spending of Ford Motor. Lately we’ve been talking about smart watches, but if I’m an Apple exec, I’m thinking a watch is pretty much niche stuff. How you expand a company this big is through entering the world’s largest markets, and automobiles are at the top of the list.
Let’s think for a moment about why this could be a slam dunk for Apple. Imagine that current experiments in autonomous cars continue to pay off, and that we are headed for a future when cars largely do the driving for you. Many analysts think we are headed in this direction, and that means plenty of down time for the person who used to be controlling the car. This has to be what Apple is thinking about: How to keep ahead of the software curve when it comes to a future market for autonomous cars. Actually producing cars may not happen.
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Consider Delphi, a maker of automotive components that is focused like a laser on the kind of software (with accompanying sensors and other implementation) that an autonomous car will demand. The company is sending an autonomous car on a cross-country trip to tune up a sensor system that includes everything from GPS to radar. Its autonomous test models have been making their way between Los Angeles and San Francisco for some time now. A human will be aboard the cross-country trip, though it may not be necessary to touch the wheel.
Mercedes-Benz is exploring this turf with a research vehicle that drove German roads from Mannheim to Pforzheim by itself, through highways and urban congestion, a couple of years ago. The company is also, through a concept car called the F 015, trying to figure out how driverless cars change vehicle design, with safety seen as a game-changing upgrade as we move from humans to automated travel. Google, in turn, is working hard on an autonomous car that has proved functional but lacks the design cachet of anything by Mercedes.
Another key factor in the auto industry, especially as we look forward just a few years, is the improving quality of the electric car, which seems to go hand-in-glove with current autonomous vehicle thinking. Tesla’s Elon Musk recently announced a software upgrade to the Tesla line, all electric, that will ensure you don’t run out of power before you can find the next charging station. Musk also dropped the fact that a summer upgrade will offer an “autopilot” mode which, though short on details, seems to offer full vehicle autonomy.
We should expect limitations on the Tesla software – it’s hard to see it being extended to urban settings before a thorough vetting on highways, where the issues are much less complex. It’s easy enough today to buy a car that has some form of self-parking technology. It now appears that a variety of autonomous options will be coming to showrooms near you within the next few years. It will be fascinating to see whether one of these is an Apple.
I imagine all of this will be broken in gradually as people begin to accustom themselves to the idea, and early adopters will doubtless still have complete freedom to drive as we have been driving, steering wheel and all. But if autonomous cars continue to prove themselves safe (and we’ve learned a lot from Google’s experiments that point in that direction), then what’s ahead for this industry may just be a serious and long overdue reduction in accident rates. The range of innovation ahead as this trend accelerates is going to be game changing.
Paul A. Gilster is the author of several books on technology. Reach him at email@example.com.