Reports from Bloomberg suggest that Apple has decided to terminate its secret advanced car project, which though never officially acknowledged, was widely believed to be working on an electric and self-driving car. In a field which has seen recent turmoil, including the temporary halt of Cruise operations, and the cancellation of Ford’s Argo project act Aptiv’s drop of support for Motional (which still has the support of Hyundai) it’s certainly not good news for the pace of deployment of self-driving. Apple, while not usually a first mover, is a leading contender for being the top technology company in the world, and everybody was interested in, and afraid of what they might do.
These recent pull-backs have changed the tone of the industry. There is no longer any sense of “hurry” and while a few years ago companies entered the space for fear that they might be one of the few to be left behind—to their possible doom—more companies are evaluating whether they need to be actively working on the space.
Auto OEMs were never particularly eager. While they don’t deny that change will come to their industry, they don’t want it to be particularly fast, and would rather they manage it at their own non-disruptive pace. High-tech companies and startups were much more eager to enter a new a lucrative industry and get a chance to take it over, and do it their way. In a few cases, like Cruise, Argo and Motional, traditional auto companies bought startups and let them run as mostly independent companies in the hope of not falling for the big traditional company traps.
With Apple’s departure, the space is ceded mostly to Waymo, though Amazon/Zoox hopes to enter soon and Tesla remains a long-shot. And of course the Chinese companies, who are running services in several Chinese cities but won’t be able to run one in the USA except through a partner. MobilEye is yet to deploy anything but holds a dominant role as supplier to traditional auto companies who want to enter the space by using a supplier.
While nobody knew what to make of Apple, because it’s plans were always close to the vest, the trend it continues will make many companies feel they now have more breathing room. They won’t be the only one left out. Building a robotaxi is extremely difficult and requires lots of billions of dollars and a long time horizon, something many players were not really ready for, particularly during economic ups and downs. The unwelcome political climate in San Francisco, while always expected, has also scared players away.
The desire to slow down, though, is a boon for those who don’t. While they fear they might be wasting their money because it will take longer than expected, those who do push through will now get the field to themselves for a while. That’s good news for them. It’s even good news for Tesla, which has taken a longshot bet at an alternate technology approach. Many people feel that while Tesla’s approach is risky and probably takes a lot longer to deliver—and reports from Tesla’s latest “mostly neural nets” rewrite are not heartening—it may well succeed at some undefined moment in the future. If and when that happens, Tesla will be very well positioned, and with fewer competitors ahead of it.
It’s also a win for the Chinese companies. Right now, they are focused on the Chinese market, but in time they will want to play in western markets, even though the political situation will probably bar that for some time. That means they will want partners, and the more companies that do not have their own plan, the more potential partners there are. Apple could even be one, acquiring a software stack, and contracting with a Chinese manufacturer to make the cars, as it does for most of its products. Apple presumably saw the road to their own project working as too long, but if there is a working stack of software and sensors they can just buy with cash, it could be a different story.
In the widely praised book The Innovator’s Dilemma, the story of the disruption of industries is told many times. In these events, incumbent leaders rarely survive into the new industry. This happens not because they are incompetent and unable to see the change, or even unable to develop new technology, but because they don’t or can’t steer the ship. They decide the new technology isn’t really a threat, and they can always adapt to it later. And then they are gone, because that’s usually (though not always) the wrong prediction. Adapting to self-driving isn’t something that can be done overnight, and those who plan on doing so make that plan at their peril.
