Apple’s obsession to produce self-driving cars is very much alive and kicking. BBC News reported this morning that Apple has filed documents with US Transport regulators. In its letter to the transportation authorities Apple said that it was “excited about the potential of automated systems in many areas including transportation.”
According to the BBC news report today, Apple added that there were “significant societal benefits of automated vehicles” to be realised.
This is the first time Apple has publicly acknowledged that it is working towards a platform for autonomous cars.
BBC’s report added that:
A company spokesman for Apple said that the letter to the National Highway Traffic Safety Administration (NHTSA) was prompted by its “heavy investment in machine learning and autonomous systems” and that it wanted to help define best practices in the industry.
The five-page letter, written by Apple’s director of product integrity Steve Kenner, urges the regulator to not introduce too many rules on the testing of self-driving cars, saying that “established manufacturers and new entrants should be treated equally.”
These reports come at a time when the established electric car maker TESLA has been struggling to maintain its love with its shareholders. TESLA’s stock has been struggling at the $182 price level and has fallen from its 52 week high value of $250.
Analysts are waiting to see how the Model 3 deliveries shake out from TESLA. A hedge fund manager claimed this week that Model 3 would put TESLA out of business.
In the case of Apple, it could potentially capitalize on its strong balance sheet and cash position to line up the investments that it needs to deliver an autonomous car platform. Cash burn and risk of additional debt has been a problem for TESLA and Apple does not have this issue. if the government allows companies to bring in the cash that they have outside the country at a lower tax rate, it could provide Apple the cushion that would be required for this massive size capital investment.
The current political uncertainty along with the aspiration to make US a manufacturing hub could also influence how Apple takes steps to manufacture an electric car. Would it manufacture locally or still source it from factories outside US.
Instead of an autonomous car, Apple could produce a platform that could be a value added service for car manufacturers such as Ford. This would be more in line with its competitor Samsung’s strategy. Samsung recently acquired Harman International for $8bn and is positioning Viv Voice first technology for cars.
The bigger question is if Apple does decide to produce autonomous cars, which segment of the market is it going to target. Will it target the high end luxury segment and compete with Model S or would it instead position an Apple Car for the mass market.
There are many questions that remain unanswered at this time. Perhaps we will hear more from Tim cook when Apple reports its earnings for the next quarter.
How do you as a current shareholder or an Apple customer feel about Apple’s intention of pushing forward with an autonomous vehicle?