Auto Industry Shakeup, Part 1: Automakers Worried About Apple's Alleged Autonomous, Electric Car

March 5, 2015

Over the past couple of weeks, rumors about Apple's plan to develop an all-electric, autonomous car have taken the internet by storm. Apple hasn't confirmed the rumors, but it hasn't denied them, either, and that -- along with a lawsuit that strongly suggests Apple is, indeed, building an electric car -- is all the confirmation that many people need.

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While fanboys and fangirls are doing cartwheels at the thought of parking an Apple-branded ride in their driveways, Bloomberg reports that folks in the auto industry are far less enthusiastic. In fact, some are already looking over their shoulders.

Such worries were on full view at this week's Geneva Motor Show. When asked about the matter, Volkswagen CEO Martin Winterkorn tried to focus on the partnerships that VW is developing with Apple and Google through CarPlay and Android Auto. He put a brave face on it  -- "I think that we, as the Volkswagen company, can bring together the digital and mobile world" -- but he also had to understand that VW has lagged behind much of the auto industry in developing electric cars.

Now, Google has announced plans to sell its electric, autonomous vehicle by 2020, and Apple is reportedly working on the same schedule. Given the length of time it takes to develop and launch a new vehicle -- anywhere from five to seven years on average -- that puts VW even further behind the eight ball.

Elsewhere on the show floor in Geneva, Fiat Chrysler Automobiles CEO Sergio Marchionne talked of the disruptive power of upstart automakers like Tesla. He applauded the audacity of CEO Elon Musk, but also noted that FCA is one of the very companies that Tesla is undoing: "It’s a good thing, but when you are one of the guys whose life is being disrupted then you are not necessarily looking forward to the event."

But perhaps the best summary of the auto industry's feelings toward Apple and Google came from Stefan Bratzel, from the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany. He said, "The closer we get to autonomous driving, the weaker the connection becomes between the customer and the car. And Google and Apple aren’t burdened with old technology but can start fresh."

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What's most interesting about all this speculation and worry is that it only emerged in the past few weeks, when rumors of Apple's "Titan" research lab became public. Google has been testing autonomous cars for years -- years -- in plain view of everyone, and no one's really voiced concern. But suddenly it's Apple with the alleged autonomous car, and, "Whoa, Nellie".

That's because Apple has something that few automakers can claim: fierce brand loyalty.

Worse, some of that brand loyalty comes from the fact that Apple is massively proprietary. Get hooked on Apple products and services, and just like crack or Pringles, it's damn hard to quit them.

So, it's not just that automakers seem concerned about an Apple-branded vehicle -- though if recent history is any indication, such a car would be very easy on the eyes (if not always functional). It's also that Apple inspires loyalty in numerous ways, which could take a big bite out of other car companies' sales. 


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