Wednesday 15 September 2021

Re-discovering Apple Cars, No Progress in Seven Years

 The core question: Who will make it? What to make? How to make it?

Apple Car -- Steve Jobs's last wish, Apple's long cherished wish!

On September 7, Apple's car project leader, former Tesla executives, Doug Field (Doug Field) suddenly resigned and moved to Ford. Field himself explained that he joined Ford in the hope of getting an opportunity to "make a difference." His successor is Kevin Lynch, the former head of Apple Watch and Health.

In 2008, Jobs had planned to develop its own car brand iCar. In 2014, Apple launched a high-profile automotive project and named it "Project Titan." To a certain extent, "Project Titan" is the "last wish" of Apple's soul Steve Jobs. At that time, after Apple announced that it would build a car, it has attracted great attention from the global automotive industry, and even Musk believes that Apple will be its biggest competitor.

Apple Car Concept

However, it has been 7 years since the establishment of the project. Apple's car building is still "Castle in the sky." The executives are constantly losing and changing, and the strategic direction is still unclear. From car manufacturing to autonomous driving, then switching back to car manufacturing from autonomous driving, Apple has made many detours over the years and has paid too many sunk costs.

Apple still hasn't thought about building a car at this stage, but it can be said that it "woke up early and didn't catch up with the late episode." Compared with Baidu and Xiaomi, which have just entered the market this year, and have already called out the pride of "three years of mass production and listing", Apple, the world's highest market value, seems a bit too slow and conservative. In the industry, there have always been three time points for the launch of Apple Cars: 2021, 2024, and 2024-2025, but to this day, these have not been officially confirmed. Confidence is evident. So, is it okay for Apple to build a car?

01 Who will make it? People come and go!

To build a car, the first thing to solve is the problem of "who will build it", and the key is to build a team. Just like this year, after Baidu and Xiaomi announced that they will build cars, their first task is to recruit people, and even drive high salaries for the entire industry. The same is true for Apple's cars.

In 2014, Apple officially launched the automotive project "Project Titan". At that time, it formed a luxury team of about 200 people, and the ultimate goal was to expand the team to 1,000 people, so Apple began a large-scale expansion in the automotive field. In September of the same year, Johann Jungwirth, CEO of Mercedes-Benz North America R&D Center, moved to Apple, and former Ford executive and Apple product design vice president Steve Zadesky served as the head of the automotive project. In just six months, Apple's car-building project has gathered thousands of people.

In order to build a car, Apple does not hesitate to use huge resources. The power test and hybrid electric system engineers of many companies such as Chrysler, Tesla, Ford, etc. have all been poached, and because of Apple’s aggressive poaching, Musk also publicly mocked Apple in 2015, calling Apple "Tesla’s grave "-All Tesla talents poached by Apple will go to mediocrity, and there are even companies that have fought a lawsuit with Apple. According to rumors, these automotive engineers who have switched jobs to Apple will not only enjoy an additional $250,000 in bonuses, but also a 60% salary increase.

The brain drain of Apple's car project is still continuing. In the first half of this year, Benjamin Lyon, who led the development of core technologies for iPhone, iPad, and Mac, left Apple. He has been involved in the formation of the initial self-driving car team since 2014; Dave Scott, who is responsible for Apple’s car-related robotics research, joined A healthcare company; Jamie Weedo, who is in charge of the safety and supervision team of self-driving cars, joined a road data-related start-up after leaving his job. The above three had previously reported to Field.

Now that Field resigns again, he has also become the fourth resigning director of Apple's car project in seven years. According to data, as early as 2008, Field joined Apple in charge of product design, and has been promoted to vice president of Mac hardware engineering since 2011. In 2013, after leaving his job, Field joined Tesla as the senior vice president of engineering, assisting Tesla in the development of Model 3. It was not until 2018 that he returned to Apple and participated in the "Titan" project. During this period, he helped Apple introduce a number of Tesla executives to promote vehicle development. This is regarded as one of the turning points of Apple's car project.

Field told the Wall Street Journal in a recent interview that he is happy to return to a car manufacturer with long-term business experience. In his opinion, it is a cool thing to start a brand new car company or start a brand new car project from scratch. "However, most of these new projects lack lasting resources and endurance, making cars is actually very difficult." Obviously, Field's statement meant something.

As for Lynch, Field’s successor, an Apple spokesperson declined to comment on his appointment. But choosing Lynch to lead the car project shows that the company's focus is still on basic software and autonomous driving technology, rather than the physical manufacturing process of the car. For decades, Lynch has served as a software executive, rather than in charge of the hardware team, and he has never worked in a car company.

Laurie Yoler, the founding director of Tesla, said that although Apple's car plans are in turmoil, it is too early to look down on Apple's car-making prospects. She also said that recently many experts in the field of autonomous driving have gone to Apple. These people are from companies such as Waymo, Zoox and Airbus.

02 What is made? Shilly-shally over physical cars and software

With the change and loss of executives, the positioning of Apple's car project is also full of uncertainty, especially the company has been arguing about whether to "manufacture complete vehicles" or "be a supplier of autonomous driving systems." At the beginning of the development, Apple has always concentrated on the development of automotive hardware, but then began to diverge. For example, the previous project leader Steve Zadesky hopes to develop a car with semi-autonomous driving functions, and the team led by Apple’s chief designer Jonathan Ive, He hopes to build a fully automated driving platform.

Is it to build the whole car? Or focus on software? The solution given by Apple is determined by Bob Mansfield, the new person in charge who took over in 2016, who is more inclined to "developing software and support solutions." So there is new news that the vehicle development plan has been cut.

When talking about Apple’s plans in the automotive sector in 2017, Cook said, “We focus on autonomous systems. This is the core technology that we think is very important. We regard it as the mother of all AI projects. It may actually be One of the most difficult AI projects to carry out.” This is also the first time that Cook has publicly admitted that Apple is studying autonomous driving systems.

According to incomplete statistics from the media, from 2017 to 2020, Apple has obtained more than 100 automotive patented technologies, covering many aspects such as autonomous driving, smart cockpit, charging, on-board systems, vehicle body structure optimization, and safety assurance. Among them, the proportion of patents for Apple's intelligent driving system increased from 22% in 2016 to 41% in 2019; the proportion of patents for vehicle hardware innovation design increased from 11% in 2016 to 37% in 2019. From the perspective of these patents, although Apple has not officially released its own models, it has accumulated a large number of patented technologies in vehicle manufacturing, autonomous driving, and smart cockpits.

But for Apple, the biggest problem is the accumulation of itineraries. In 2019, the total road test mileage difference between Apple, Google and Waymo was hundreds of times, less than 200 kilometers, but strangely, this is the result of Apple deliberately reducing the test volume. Apple may hope to use AI to make up the mileage gap. . Now, the Apple car project is separated from the Apple hardware team and is attached to Apple's AI department. The person in charge John Giannandrea reports directly to Cook, showing that Apple is further attaching importance to autonomous driving.

At the end of last year, according to a Reuters report, Apple’s “breakthrough battery technology” adopted a “monocell” battery design to increase the size of a single cell and free up the internal space of the battery pack, thus making the battery system even better. Cheap and safe, it plans to start production in 2024. There are also reports that Apple has put forward stocking requirements to auto parts manufacturers and is still cooperating with TSMC to develop autonomous driving chips.

Bernstein analyst Arndt Ellinghorst once said: "I don't see where Apple's technological advantages are." "It can only be automatic, which is the direction the world is pursuing. However, in a market where it is extremely difficult to make money. No advantage is not a good proposition." Apple has a professional supply chain and an attractive brand, and has the ability to combine hardware, software, and services. Nevertheless, from the perspective of its product portfolio, Tesla may surpass Apple in terms of battery performance, but in terms of interior design or mass production, Apple may be surpassed by Mercedes-Benz and BMW.

"Apple’s core competences are the operating system, Apple store, AppStore, chips, etc., while Tesla has been in the business for 18 years, in battery factories, vehicle manufacturing, 4S stores, charging networks, artificial intelligence, etc. Accumulation, the gap between Apple and Tesla in terms of car manufacturing is already very large." Professor Zeng Chenghua of the Department of Business Management of the School of Management of Fudan University once told the media.

Morgan Stanley analysts also said that Apple’s goal of making cars may be to use its design and software to create a better car experience, and it can be monetized through its current subscription and service product matrix. Judging from the current patents, Apple also has many ideas for cars. In the design of traditional components such as door hinges and seat belts, Apple has added new ideas to improve the ride experience. Sliding doors, flexible bumpers, active suspension systems, Magsafe charging piles... Apple's mechanical design has always been "smooth" as the highest standard, which is unobstructed in Apple Car's related patents.

Of course, there are also doubts in Wall Street about Apple's cross-border profits. Citi analysts said in the report: "We very much doubt whether Apple will actually produce cars, because the profitability of the auto industry is much lower."An analyst from Evercore, an investment agency, also doubts whether Apple will enter low profit margins and capital. Intensive automotive industry.

According to the latest news, people familiar with the matter revealed that Apple’s electric vehicle laboratory in California has quietly resumed operations, and the company has recently secretly visited Korean suppliers such as SK Innovation and LG Chem. A number of auto parts suppliers sent requests for quotations in an attempt to find a suitable upstream supplier. These movements mean that Apple is very likely to have shifted its strategic direction to develop and manufacture a complete electric car on its own, rather than just being responsible for a small part of the entire car manufacturing process.

03 How to make it? No consensus

For Apple, which has a swaying car manufacturing route, how to build it is also a difficult problem.

In the traditional consumer electronics field, the foundry model is very mature. Companies such as Foxconn and BYD have been very successful in foundry. However, foundry is not common in the automotive field. Only Magna will help car companies. OEM some high-end models. Judging from foreign media news, Apple does have the idea of ​​foundry. Reuters reported that Apple had previously negotiated with Magna on the production of cars, but because Apple's plan was not clear, the negotiations were ultimately unsuccessful. At present, it is true that Apple has few rumors of building a factory. In addition, Apple has no previous experience in producing cars, and building a factory on its own requires a lot of processes to be opened up. The most suitable way for Apple may only be OEM production and the establishment of joint venture car companies to produce these two roads.

At the beginning of this year, Apple began to seek cooperation with car companies to produce cars by OEM. According to many media reports including Nikkei Asia, Apple has intensively visited a number of South Korean and Japanese automotive supply chain manufacturers and automakers, such as Toyota, Hyundai, SK Group and LG Electronics, and plans to mass-produce cars in 2024. In particular, the alliance with South Korean Hyundai Motors to build cars has caused a lot of turmoil in the industry. According to foreign media reports, the new car is designed by Apple, produced by Hyundai or Kia, and then relies on Apple's strong brand and sales channels for market expansion, but The negotiations between the two companies ended in failure.

For cooperation with Apple, these traditional large car companies have their own minds, that is, they want to make money and gain reputation, and the best way is to become Apple's partners, not a foundry, otherwise the gains are not worth the loss. Analyzed, there are four main reasons for this: The first is that if it is Apple’s OEM, then Apple, which has a strong brand halo, will continue to dilute the car companies’ own brands, but they have many products and technologies. He is unwilling to become a "hero behind the scenes"; the second is in competition. When global car companies are turning to electrification, car companies will no doubt establish a competitor for Apple in the future, and they are still working at the same time. The third is in terms of profit. In Apple’s supply chain system, Apple occupies most of the profits, while suppliers can only obtain a small portion of the profits; the fourth is in the future development, if Apple’s production of iPhone logic is followed Similarly, once the supplier is determined, Apple will let the supplier rebuild a production line that meets Apple's requirements, and it will be very strict, and the supplier can only serve Apple as a company, which is too restrictive.

At the same time, in the field of vehicle manufacturing, the industry has always believed that Foxconn will produce automotive products for Apple, and this year Foxconn is also accelerating its entry into the electric vehicle field. In January this year, Foxconn successively reached a cooperation agreement with Byton, and then established a joint venture with Geely Group. On May 14, Fisker announced the signing of a framework agreement with Foxconn. The two parties will begin manufacturing pure electric vehicles in the United States in the fourth quarter of 2023, with an annual output of more than 250,000 vehicles. In a conference call for Foxconn’s second quarterly report in August, Hon Hai Group Chairman Liu Yangwei said: “We plan to start mass production of cars in the United States and Thailand in 2023. As part of the global automotive strategy, we are negotiating with some regions in Europe to build plants. "

For Apple, Foxconn is its partner for more than ten years. It has a production network of more than 1 million employees and more than ten years of mobile phone foundry experience. It has a proven loyalty and is familiar with its temperament. Once Apple's car manufacturing returns to the iPhone production model and simply handing over the manufacturing to pure contract manufacturers, Foxconn is undoubtedly the most powerful contender. But on the other hand, although Foxconn has reached cooperation with different car companies, it still lacks experience in the field of automotive foundry.

Of course, there are also media reports that if you throw away car companies and Foxconn, finding a professional auto contract manufacturer may be the only option for Apple to continue to build cars. As mentioned above, Magna has been doing vehicle models and OEM production for car companies, and has cooperated with BMW and Jaguar Land Rover, and has a high degree of expertise in the field of automotive OEMs. In addition, Magna was the first target of the Apple Titan Project, but when Apple decided to limit the target to "software only" development, the cooperation between the two parties was also shelved. In order to meet the requirements of Apple's foundry, Magna has taken many positive measures. On the one hand, the company established a joint venture with LG to produce powertrain systems for electric vehicles; on the other hand, by focusing on manufacturing zero-emission vehicles, Magna has expanded its production capacity in China.

The latest news shows that according to foreign media reports on September 10, Apple failed to reach a part manufacturing and assembly agreement with third-party partners. Apple has restarted its automotive research and development laboratory and began contacting global auto parts manufacturers to obtain parts quotations. Accordingly, the industry believes that Apple will independently develop Apple cars.

In any case, Apple has been building cars for 7 years. During this period, it has witnessed Tesla's rise to the top as the world's largest car company by market value, the rise of the domestic "Wei Xiaoli" and the "new four modernizations" of global car companies. Fully arrived. But I played a lonely one, if I don't take it hard, then the time is really running out.

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