Apple\'s self-driving car development initiative took many turns in the past few

Question

Apple's self-driving car development initiative took many turns in the past few years. At first, Apple wanted to build its own vehicle from the ground up. Then it decided it wanted to design the car, but pay someone else to manufacture it. Next, Apple began working on the underlying technology that allows a car to drive itself, instead of manufacturing cars. More recently, while Apple announced that it is working on a self-driving shuttle service that ferries employees between Apple buildings, it is likely that an automaker will supply a commercial vehicle and Apple will use it to test the autonomous driving technology.

Google, which similarly entered the self-driving car market, ended up spinning off its elf-driving car project into Waymo in December 2016. https://www.wired.com/2016/12/google-self-driving-car-waymo/

Waymo also moved away from the idea of manufacturing its own cars and are instead focusing on building software for cars made by traditional manufacturers via alliances (Fiat Chrysler, Jaguar Land Rover). https://www.youtube.com/watch?v=1KJWAeih-is

Given that Apple typically takes a do-it-all approach which prefers to control every aspect of a product (Build via internal development), evaluate Apple's decision to reduce its control and pursue a Borrow (via alliance) option instead.

Explanation / Answer

Apple decision but build technology with alliance partner is correct because building a car and providing after sales service is not a easy job. Automobile market is a capital intense market, hence it sucks blood out of even rich company like Apple. This in other way act as entry barrier to many.

Let us assume that Apple builds its own car, imagine money it has to invest in designing each component of car, distribution system, marketing, manufacturing units etc. It is just impossible for tech companies like Apple to design each and every component of car right from scratch. The margin company derives from all this process is also not worth it.

The existing traditional car companies like Toyota, BMW, Audi etc are so strong that they will not leave Apple to run away with major share in automobile world. Companies like Toyota have decades of experience in manufacturing car with patented technologies.

Instead of this, Apple would find it easy to collaborate with automobile companies and implement its technology deriving same margin. This would be feasible for apple as it does not need to develop entire car instead concentrate on part of car it want to automate.

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