Car Commerce Tracker: Apple Joins The Fray

Everyone’s talking about it. Apple looks to have joined the race to develop self-driving technology.

Though, as is typical with Apple projects, details are vague at best. Lest we forget the quintessential uttering by CEO Tim Cook at a company shareholder meeting last month: “future stuff [we] can’t talk about.”

At the time, “future stuff” was widely thought to be a reference to augmented reality technology. While that could still be the case, Apple’s AR tech seems more like a near-term reality than something further down the road. (Pun 100 percent intended.)

Here’s what we do know on the car front.

On Friday of last week, Apple secured a self-driving road test permit from the California DMV. The new permit will reportedly allow Apple to test the technology in three Lexus RX 450h models, a luxury hybrid SUV.

The permit is the first direct indication of movement in the tech giant’s play to create autonomous vehicle technology. Apple has been tight-lipped about its rumored car-based project, code-named “Project Titan,” since reports of its existence began to surface in 2015.

Last October, Cook told investors, “We are always looking at new things, and the car space, in general, is an area that it’s clear that there are a lot of technologies that will either become available or will be able to revolutionize the car experience.”

It’s a bit more specific, though not by much.

The self-driving tech space isn’t seeing any shortage of contenders. Apple now joins 29 other automotive and tech companies who have received test permits in California for self-driving technology.

So, is Apple developing an electric car like Tesla CEO Elon Musk said back in the beginning of 2016? With self-driving technology to boot?

We wouldn’t rule it out completely. Apple does like to handle both hardware and software. It’s the company’s whole schtick. But with the amount of time it takes to design a vehicle (even one that needs a human to drive it), the low margins and high regulation, a fully realized Apple Car is likely a long-term goal, if it even is a goal at all.

It seems more likely that Apple is working on the self-driving software, sensor technology and dashboard services (e.g. music, messaging and payments) side. The company already has CarPlay capabilities, for instance, in a number of new vehicle models across manufacturers. One could imagine the next step would be to implant greater connectivity and self-driving technology into those existing partnerships.

It’s the tech company’s move in the vehicle space: creating the brains of the self-driving operation while leaving the vehicle body hardware to the incumbent car manufacturers.

Though perhaps car manufacturers aren’t looking to have tech companies sell them what they can make themselves. Ford, GM and a number of others are in the self-driving game as well — some are even leading the pack. A cooperative software integration to connect with smartphones is one thing, self-driving systems another. Potentially.

What’s especially interesting on Apple’s end as it enters the self-driving space is its pre-existing relationship with Chinese rideshare company Didi Chuxing.

Didi set up an AI lab in California last month, signaling yet another self-driving technology play in the works. Both Apple and Tesla have invested in Didi Chuxing, with the former going so far as to throw down $1 billion in May of last year.

While Tesla has been the most forward about its self-driving ambitions, it’s possible all three of these companies could be working on autonomous car tech simultaneously. Apple and Tesla both have the direct capacity to collaborate with Didi Chuxing, leveraging the rideshare’s existing network to bring their future autonomous car tech to the nation of 1.3 billion.

Add to the mix that, at the end of last month, China’s internet giant Tencent bought up a 5 percent stake in Tesla to the tune of $1.8 million.

What all of these connections suggest (aside from tech’s tendency to get incestuous) is that while the focus on the self-driving tech development push has largely been U.S.-centric, the reality on the buying end will be multinational. Two nations in particular are wont to take the lion’s share of sales.

China is the world’s largest vehicle market, after all, followed by the U.S. Preexisting partnerships that span borders could come in handy when it’s time to ship self-driving cars overseas (and get access to road mapping data).

As to whether things get more competitive or collaborative on the part of the self-driving players, that will likely depend on who gets their tech up and running first. If it’s a tech company, partnerships will almost certainly dot the early playing field as the software searches for vehicles to live in.

If it’s an incumbent automotive manufacturer, let the games begin.