What it is: Tim Cook, Apple’s CEO, verified that Apple is working on a self-driving car.
In a recent interview with Bloomberg, Tim Cook confirmed that Apple is working on autonomous driving technology, otherwise known as self-driving cars. “We sort of see it as the mother of all AI projects,” Cook said. “It’s probably one of the most difficult AI projects actually to work on.”
Previous rumors suggested Apple was either backing away from self-driving cars and pursuing just the entertainment portion of a car system through CarPlay. However Tim cook’s recent comments indicate Apple is researching self-driving cars although they don’t have a definite time frame for when (if ever) this technology will reach the public.
While Apple may seem late to the self-driving car market, Apple was also late to the MP3 digital player market before they introduced the iPod, they were late to the smartphone market before they introduced the iPhone, and they were late to the tablet market before they introduced the iPad. Being first is only an advantage if you can maintain your lead. Just ask Blackberry, Nokia, and Microsoft what happens if you get complacent.
Initially, self-driving cars will likely appear in limited situations such as shuttles at airport terminals or as vehicles carrying objects in a warehouse. Putting self-driving cars on the road filled with human drivers will take time, especially as self-driving cars will need to react to snow, ice, accidents, police directing traffic, and other varying situations that aren’t as simple as driving along an empty road.
Yet the automotive industry is undergoing change in three areas:
- Self-driving technology
- Ride-sharing services
- Non-gasoline powered cars (electric or hydrogen fuel cells)
Just one of these technologies threatens the current automotive industry. Having three of them rapidly reaching acceptance at the same time means tremendous upheaval for the automotive industry. Right now, the Big Three auto makers make the bulk of their profits selling gas guzzlers, pickups and SUVs. Once ride-sharing services and self-driving cars start reducing car ownership, the business model of today’s Big Three auto makers goes down.
How can the Big Three auto makers transition from gasoline engines to electric or hydrogen fuel cells rapidly? That means they’ll likely run into the same dilemma that Kodak faced. Kodak initially made the bulk of their income from film processing and developing. When digital photography arrived, Kodak resisted it because there wasn’t as much profit in digital photography as there was in film.
When Kodak realized digital photography was the future, they changed too slowly. The profits from digital photography couldn’t offset the expense of running a film processing and developing business. The old business model expenses kept Kodak from profiting from digital photography. On the other hand, companies with no investment in film could easily transition to digital photography with no burden to the past whatsoever.
That means the Big Three auto makers will have to make a similar transition from car ownership and gas cars to ride-sharing services, self-driving cars, and non-gas powered vehicles. Think they can do that while still maintaining the expenses of their current business model? Maybe, but it’s not likely. That means today’s big car companies are likely going to go the way of Kodak, Blockbuster Video, and Radio Shack. They’re obsolete.
That means the future depends less on today’s entrenched car companies and more on tomorrow’s car companies like Tesla, Google, and Apple. Forget about Ford and General Motors. The future is not them any more than the future of retailing was Montgomery Wards and Sears.
The fact that Tim Cook verified that Apple is working on self-driving technology means this technology will eventually arrive someday. The big question is which company will be the big winner in the future? It’s clear that any company not working on self-driving cars can’t possibly succeed (where is Microsoft in the self-driving technology market?), but it’s also clear that today’s car leaders likely won’t transition fast enough to embrace the future.
That means Tesla, Google, Apple, or some other company has the best chance of embracing the future. It’s going to be big. The only question is who will profit from this major change in transportation?