Why Apple’s self-driving car plans are very important for the Company’s future?
Apple’s “top secret” plans to build autonomous cars are officially not a secret anymore. Tim Cook has not only confirmed that Apple is working on driverless vehicles but he also said autonomous cars are “the mother of all” artificial intelligence projects: “We’re focusing on autonomous systems. It’s a core technology that we view as very important. We sort of see it as the mother of all AI projects. It’s probably one of the most difficult AI projects actually to work on.”
Apple already has the permits from the California DMV to test self-driving vehicles on public roads and it is rumored that the Company is testing its AI with several Lexus SUVs on the public roads since 2014.
The main interest of the Company is not building cars but to widen its IOS ecosystem into space of self-driving car technology. Apple tried to build partnerships with German car makers BMW and Daimler but the Company has failed: “….. previous talks with BMW and Daimler allegedly broke down over data protection and control. It seems Apple has decided that developing their own autonomous system is preferable to partnering.” James Hodgson from ABI Research.
Why are autonomous systems so important?
Selling the Artificial Intelligence:
As mentioned by Tim Cook, AI is the core of the self-driving car technology, not only to enable the car to self-drive but also the safety and passenger’s experience will depend on the technology of the AI.
As we know, the car industry is very competitive with meager profit margins. AI can be a radical game changer for the whole car industry. High probably, AI will be an important competitive advantage and the autonomous system of the self-driving car will be the most profitable part of the business. Today, the cutting edge AI is a very strong economic moat which is hard to replicate by new comers.
AI is a self-learning system and to develop itself, AI needs to be fed with data. Without data, AI is useless. The more we use AI, for example: while driving, the more AI gets better. Self-driving cars can tremendously improve the technology of the artificial intelligence. And also, Apple needs our usage of its AI in our life and in average, we spend more than half hour per day in our car.
Apple is a pioneer in AI technology and therefore, has several advantages to bring AI to car industry but to remain as a pioneer, the Company cannot be just a bystander while its competitors, i. g. Alphabet, become the major player in this business.
Expanding the IOS ecosystem:
Imagine: while you are driving your car, you can listen to the music you purchased via iTunes, or you can send an email by speaking with Apple’s Siri or your home is connected to the same IOS and you can control your home heating via Siri before you come home. Integrating the self-driving cars to the IOS ecosystem can improve the driver experience and Apple is an expert to make user-friendly products with high-quality design. IOS ecosystem would take more place in our lives and make us more dependent on Apple’s products and ecosystem.
Apple’s revenue from Appstore and iTunes is growing at double digit rates. Expanding IOS ecosystem in the car industry has tremendous potential to generate more revenue not only for Apple but also for App developers too.
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