Posts Tagged ‘apple’

Faraday Future – a new Tesla competitor?

faradayfuture.com

faradayfuture.com

There was some media buzz during last weeks regarding a mysterious new billion-dollar EV company, operating out of a former Nissan site in California. The company called “Faraday Future” (FF) has assembled a strong leadership team consisting of former Tesla and BMW guys plus a couple of hundred other employees, and seems to be planning to launch a new EV vehicle around 2017.

First reports have indicated the possibility of Faraday Future being a dummy company for Apple’s EV project, given the lack of an known CEO and the seemingly extremely fast and high funding of the new company. A closer look at the incorporating documents has revealed, though, that FF’s chief executive is a partner of Jia Yuenting, founder of LeTV. Thus, Faraday Future is more likely to be the potential future home of LeTV’s SSE (Super Electric Eco-System) car project. This project is not just about the “old-economy” style “moving a car out to the dealer” type of business, but will try to treat the car more like a smart phone. Subscriptions, apps, car-sharing and other service revenue streams seem to be an integral part of the envisioned LeTV EV car project.

Privacy and data protection as a competitive advantage?

Porsche’s 911 sport cars are incredible driving machines. And the automaker’s upcoming 2017 model is no exception. High-end sports car like this one usually not only offer great driving performance, but also spoil its owners with latest connectivity and entertainment technology.
Interestingly, according to a Motor Trend Article, Porsche decided to not integrate Google’s Android Auto into its latest car, and only offers Apple’s Car Play in their head unit instead. There is not really a technological reason behind this decision, but Porsche decided based on privacy and data protection concerns.

 

As part of the agreement an automaker would have to enter with Google, Porsche said certain pieces of data must be collected and transmitted back to Mountain View, California. Stuff like vehicle speed, throttle position, coolant and oil temp, engine revs—basically Google wants a complete OBD2 dump whenever someone activates Android Auto. Not kosher, says Porsche.
13 Cool Facts About the 2017 Porsche 911

 

Although Google disputes this statement, it did not provide a full list of collected data to further clarify the situation. It might be that Porsche made its decision to a time “when Google initially approached automakers concerning Android Auto, it requested a deeper data set than what is currently required”.

Nonetheless, Apple might be on the right track here in regards to privacy and data protection. Ultimately, Apple earns the majority of its revenues and profits with products and not with your data, providing a fundamental difference to the Google strategy.

 

Our business model is very straightforward: We sell great products. We don’t build a profile based on your email content or web browsing habits to sell to advertisers. We don’t “monetize” the information you store on your iPhone or in iCloud. And we don’t read your email or your messages to get information to market to you. Our software and services are designed to make our devices better. Plain and simple.
Tim Cook – CEO Apple

 

Apple Car Play

Apple Car Play – theverge.com/2015/9/4/9258013/apple-car-play-review

 

The Tech Industry’s Interest in Cars is increasing

Google Self Driving Car - google.com

Google Self Driving Car – google.com

 

Tech Industry players, such as Apple, Google, Samsung, Baidu, or Alibaba, are increasingly looking for potential future growth opportunities in the automotive industry. The activities are manifold, ranging from providing data services to even building a (self-driving) car.

 

Increase in patents from tech companies in automotive area - forbes.com

Increase in patents from tech companies in automotive area – forbes.com

Forbes magazine had a close look on the innovation / patent side of this development. Interestingly, if looking at the number of new patents in the automotive area that are filed by tech companies, we can observe two things. Firstly, the number of new patents did not really take off until 2013. Secondly, the overall number is still low compared to the thousands of patents from car manufacturers and suppliers which are filed every year. The increase in patents since 2013 shows quite well the increasing interest in the automotive market, though.

The biggest contributors to the increasing number of patents were Samsung and Google, followed by Microsoft and Apple.

 

But in terms of who has the biggest war chest in patents so far, Samsung far exceeds all its competitors. For automobile-related patents filed in the past 10 years, Samsung leads with 510, Google GOOGL -1.70% with 308,Microsoft MSFT -0.98% with 222, and finally Apple AAPL -0.47% with 83, according to patent numbers pulled by SmartUp Legal.
Samsung Amasses Largest Patent War Chest Among Tech Giants For Cars Of The Future – forbes.com

 

Samsung obviously contributes with a lot of patents from its batteries division, however we can see as well patents for HMI components such as a transparent Head-Up-Display, which would make Samsung compete with Tier-1 suppliers such as Continental. On Google’s and Apple’s side Forbes notes down the main interest in digital data processing and navigation, as well as autonomous driving (Google) and User Interface / Interaction (Apple).

 

 

Never underestimate a potential new competitor

Apple Watch

Apple Watch

There is usually not much that connects a Seattle-based IT company (Microsoft) with a Swiss-based watchmaker (Swatch). Unless you look a bit closer on what former and current chief executives of the two companies think about competitors and innovation.

First, enter Steve Ballmer, former CEO of Microsoft. In 2007, shortly after the launch of the first iPhone, Steve Ballmer made a legendary statement to USA Today about the new innovative iPhone coming from Apple, and was even literally laughing at the iPhone in another video statement.

 

“There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I’d prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get.”
Steve Ballmer – CEO Microsoft – 2007

 

Smartphone OS Market Shares - IDC.com

Smartphone OS Market Shares – IDC.com

Yep. Sounds about right… The 2% or 3% are going to be for Microsoft’s Windows Phone, though. What has happened over the next years – Microsoft buying Nokia assets, Microsoft writing off Nokia assets – is history.

How does the Swiss watchmaker come into play now?
Enter Nick Hayek Jr, CEO of watchmaking corporation Swatch. Nick has been in a quite comfortable situation so far, heading a diversified watch company with products and brands from entry-level to luxury, and around 9.5 bn USD sales with a 15% profit margin in 2014. Nick wants to occupy your wrist with his watch products. And as a good CEO – of course – he is always on the lookout to survey the market and the competitive situation. What do you do if you have suddenly a twenty-times (~180 bn USD) bigger company than Swatch that is launching a watch product? A product that directly competes for the same space on customers’ wrists t as your own products?

Well, it seems that Mr Hayek is not particularly impressed by Apple’s Watch that launched this year – and “only” sold a couple of million units so far. For Mr Hayek, the new competitor product is only an “interesting toy”:

 

“The Apple watch is an interesting toy, but not a revolution. These devices, which all eat so much power that they last no longer than 24 hours without needing to be plugged in. In addition, the user immediately loses control of their data. I personally don’t want my blood pressure and blood sugar values stored in the cloud, or on servers in Silicon Valley.”
Nick Hayek Jr – CEO Swatch Group – 2015

 

Let’s hope that the toy will not suddenly appeal to a large group of adult customers.

And while Nick Hayek Jr. is still laughing about the new competitor toy in his backyard, let us quickly remind ourselves that threats of new competitors entering our individual industries are more prevailing than ever. We are facing not only just increased pressure from known players in our current industry, but also from companies from other industries, which are looking at our market as potential future growth opportunity.

In the Automotive industry, for example, car OEMs might suddenly be challenged not only just by new entrants such as Tesla, but also potentially from “IT / Consumer” companies like Apple or Google. And on the supplier side, companies should have a close look at high-tech companies like Huawei that have the potential to enter the market very quickly and thoroughly. A “non-automotive-grade-quality-no-automotive-experience” company, product, or innovation, could potentially very quickly bring the the perfect storm even into an established Automotive industry.

This examples can be found for basically any industry, and it will be an crucial competitive advantage for strategic leaders to sense, plan, and act accordingly. Don’t laugh at your potential competitors, but try to learn from them instead.

 

When will we see the first Apple Car on the road?

The Guardian had an interesting article, indicating that Apple’s (autonomous) car might be closer to start of production than expected. They try to tie this down on base of Apple’s interest in a former Naval base that could be used as secret testing ground for an Apple car.

 

Apple is building a self-driving car in Silicon Valley, and is scouting for secure locations in the San Francisco Bay area to test it, the Guardian has learned. Documents show the oft-rumoured Apple car project appears to be further along than many suspected.

In May, engineers from Apple’s secretive Special Project group met with officials from GoMentum Station, a 2,100-acre former naval base near San Francisco that is being turned into a high-security testing ground for autonomous vehicles.
The Guardian

 

Combine that with Apple designer Marc Newson’s “design pet-peeve”, the automotive industry, and you can imagine even more that Apple has already the design and marketing for the soon-to-be-available car worked out:

 

My design pet-peeve is: the automotive industry. There were moments when cars somehow encapsulated everything that was good about progress. But right now we’re at the bottom of a trough.
WSJ interview with Marc Newson

 

However, while it is obvious that Apple is having a close look at the automotive industry, this does not mean that we will see an Apple Car on the street very soon. Designing a good looking car is one thing, getting manufacturing and technology right is another. As reported, Tim Cook and several executives met with BMW recently, and they still will have to figure out how to build an actual working vehicle.

Apple’s plan to have a separate testing facility does make sense in this context, so that they can start now to test functions and systems, figuring out the manufacturing process (or identifying which existing car OEM they simply would like to partner/buy instead), and preparing everything what is needed from regulatory and government perspective as well. Having a good looking car that is able to perform well in a crash test for example, might be a bit more difficult than getting a phone approved. Thus, having Apple investing now in testing grounds and further expertise might indicate a possible real car not already in 2016, but a couple of years down the road instead.

IBM and Apple – from Rivals to Partners

Who would have thought some years ago that the that employees and managers on both Apple’s and IBM’s side ever understand each other, or even worked together on a significant scale. From extensive app collaboration announced in 2014, to a newly announced service offering that should help corporate clients to roll-out Apple hardware in their companies, it has really come a long since Steve Jobs flipped the bird at IBM in 1983.

For their new corporate program IBM even sent their VP ‘Workplace as a Service’ – Fletcher Previn – to Apple for training and ‘immersion’. Previn was able to witness how Apple is “able to manage large numbers of people with far fewer resources than you would see in a traditional PC environment”, and “was amazed by the smooth experience Apple had built for its own people”.

This is a very open statement from an IBM guy, especially considered that IBM should have exactly that know how and skill set for corporate clients even more than Apple does. Apple gets more and more traction in the corporate environment, though, and it is a smart move for IBM to learn from companies like Apple how to stay agile and nimble in the changing environment.

 

Steve Jobs flips finger at IBM

Steve Jobs flips the bird at IBM

The Future of Driving is Non-Driving

Autonomous driving is a hot topic and will re-define our Automotive industry. The industry projections in regards to numbers are still early, though.

 

The Boston Consulting Group estimates driverless cars could make up 10% of global vehicle sales by 2035, worth about 12 million cars per year, while the market for driver-assistance systems could be $42 billion by 2025.
Get Your Portfolio Ready For The Future Of Nondriving – Forbes.com

 

And of course we shouldn’t forget the massive effect more autonomous driving could have on accident rates and the subsequent economic impact.

 

While these remain, a more compelling factor is driving innovation. Road accidents are the eighth leading cause of death globally, with 95% of road accidents caused by human error. Xavier Mosquet, who leads BCG’s Global Automotive Practice, puts the total cost to society of road incidents in the U.S. at $948 billion per year, or 6% of GDP. That includes the direct cost of damage to vehicles and acute health treatment as well as the lingering cost of disabilities. Environmentalists are excited about the impact driverless taxis could have on air quality and congestion in cities.
Get Your Portfolio Ready For The Future Of Nondriving – Forbes.com

 

In addition we are looking at potential new entrants of tech companies into the automotive space. It is not just about the market for components. Companies like Apple or Google might eventually try to build their own car, if they can find an profitable angle to that industry.

 

The market is gigantic: According to Morgan Stanley, annual new-vehicle sales total $1.6 trillion, versus $400 billion for smartphones and $266 billion for PCs.
Get Your Portfolio Ready For The Future Of Nondriving – Forbes.com

 

Everything combined we might look at the most fundamental shift in the Automotive industry ever. New technologies, skill sets, and an open mind for innovation will be necessary and crucial.

Apple reportedly met with BMW and is / was interested in the BMW i3 car body – UPDATE

BMW i3

BMW i3 – bmwgroup.com

 

There are many speculations in regards to technology champions such as Apple and Google and their potential interest in entering the automotive market. Entering the market not simply as technology provider for things such as Carplay or android Auto, but as a full-blown OE with their own “iCar”.

The German business journal manager magazin reported on an alleged visit of Apple CEO Tim Cook and some of his top management to BMW’s production plant in Leipzig, Germany. At this plant BMW is producing their electric vehicle BMW i3. According to the magazine, the talks between Apple and BMW have not led to a specific follow-up project though, and both parties aligned to stay in regular contact.

Der US-Konzern, bislang vor allem mit Computern und Mobiltelefonen erfolgreich, bereitet seit einiger Zeit Entwicklung und Bau eines iCars vor. Das Auto würde genau wie der i3 ein Elektroauto. Apple-Chef Tim Cook besichtigte deshalb während eines Besuchs bei BMW gemeinsam mit anderen Topmanagern die i3-Produktion in Leipzig.

manager magazin

 

UPDATE: Some more extensive coverage brought by Reuters, indicating that the talks ended due to different strategic considerations. “Apple appears to want to explore developing a passenger car on its own” vs. BMW “being cautious about sharing its manufacturing know-how because it wants to avoid becoming a mere supplier to a software or internet giant”.

 

“Two worlds are colliding here. Our world, focused on hardware and our experience in making complex products, and the world of information technology which is intruding more and more into our life.”

Apple, BMW in courtship with an eye on car collaboration

Beijing police shut down massive iPhone counterfeiting operation

Police in Beijing have busted a factory that produced more than 41,000 fake iPhones worth as much as 120 million yuan ($19 million), including some that reached the United States, and have arrested nine suspects in the counterfeiting operation.
(…)

Police seized 1,400 handsets and large quantities of accessories during the May 14 raid. In the United States, the newest Apple Inc handsets can fetch $649, or more, depending on the model.

Reuters

There still seems to be a market for willing (or scammed) customers to buy a fake iPhone. I had the chance to look at one of those devices here in Shanghai. The look and feel of the hardware is almost indistinguishable from a genuine iPhone. The quality of the components – such as screen or camera – is a huge difference though. On the software side they use an android OS with an iOS skin. Once again, the interface is almost a pixel perfect copy. They even make their own android version of iOS system apps like Photos or Music. The illusion breaks, though, the moment for example the android keyboard pops up, or an android system message appears.

For an inexperienced buyer without prior iPhone / iOS knowledge it looks pretty convincing, though, and I am not surprised to see people falling for the scam.

The Importance of China for Apple

Apple® today announced financial results for its fiscal 2015 third quarter ended June 27, 2015. The Company posted quarterly revenue of $49.6 billion and quarterly net profit of $10.7 billion, or $1.85 per diluted share. These results compare to revenue of $37.4 billion and net profit of $7.7 billion, or $1.28 per diluted share, in the year-ago quarter. Gross margin was 39.7 percent compared to 39.4 percent in the year-ago quarter. International sales accounted for 64 percent of the quarter’s revenue.

Apple

Apple Q3 2015

Looking at the detail numbers the importance of China gets more and more obvious: An overall YoY growth of 33% for Apple, fueled by a 112% growth coming from China. At Apple, China has already surpassed Europe as second largest market after the US. And with a very high chance, it might not stop at being Number 2.