Given the strength of car culture in America and the number of major, global automotive manufacturers based here, it's easy enough to assume that the US of A is the largest automotive market on planet Earth.
But it isn't. That's China. In fact, Chinese auto sales have been driving circles around American figures for the past three years, a state of affairs made all the more impressive when you consider the Chinese automotive market was effectively nil just 15 years ago.
This is why you're seeing so many global automotive players making huge moves into the Chinese market, and this is why you shouldn't be particularly surprised that Apple's first proper foray into the automotive world happened there, too. Even so, the nature of the investment might just give us a few more clues about Project Titan, supposed codename for the nebulous Apple Car project.
While we know very little about Apple's apparent quest to build an all-electric, self-driving machine of some sort, the assumption made by many has been that this will be a car for consumers. That is, a machine you and I will covet and will buy and will park in our driveways and will admire fondly through the window as it sits there, depreciating.
Maybe, just maybe, that isn't what the Apple Car is about.
Go to any automotive economic conference of any repute and you'll hear tales of a new, forthcoming automotive economy driven by one word: sharing. In this potential future, people won't own cars, they'll use cars and simply pay as they go.
There's carsharing, where multiple people use the same car, and ridesharing, like Uber, where someone takes you where you want to go. "[Ridesharing] services are having a direct impact on traditional taxis and car rental services ," says Roger Lanctot, Associate Director at Strategy Analytics, "though car rental services are benefiting from young urban dwellers opting to defer car ownership and rent cars as needed. The peer-to-peer sharing of cars has not caught on -- though more flexible car usage scenarios based on embedded connectivity may open the door wider."
Indeed, the potential future ramifications for the automotive industry are many and debatable and that, dear reader, is a topic for another editorial on another day. Right now, suffice it to say that this impending shift is considered to be very real. This is why so many are scrambling to get in early on the sharing game in some shape or another. Or, as Lanctot puts it: "Everyone is 'covering their ass' and hedging their bets."
Uber's sky-high valuation means that train has largely left the station, but GM snuggled up with Lyft to the tune of $500 million, BMW and Daimler and Nissan and others are deploying carsharing services across the US, while Ford's program just continues to get bigger and bigger. (And more confusing...)
The Chinese ridesharing landscape is far simpler: it's basically Didi Chuxing and Uber China. Didi arguably owns almost 90 percent of the market, though according to Uber China that number is actually closer to 70 percent. Either way, Didi is clearly the dominant player, providing some 11 million rides per day. For perspective: as of last year, Uber was clocking about 2 million daily in the USA. That number has surely increased significantly by now, but not by that much.
Apple's $1 billion investment should give it roughly five percent of Didi according to the company's estimated $20 billion valuation. That's hardly a controlling stake, but it gives Apple access to a goldmine of information. Indeed, Tim Cook said it's "a chance to learn more about certain segments of the China market."
And the cost? Yes, a billion dollars is a lot of dough, more than enough for you or I to build out one hell of a dream garage, but it's less than one tenth of the profits the company pulled in last quarter alone. More importantly, it's a tiny fraction of the hundreds of billions of dollars Apple has sitting in various vaults scattered around the globe. "When you have as much money lying around as Apple," says Roger Lanctot, "it's best to put it to work. Investors hate idle cash." And, given the tax implications of bringing that money back to the US, an international investment sure makes a lot of sense.
That investment also shines a little bit of new light on that mythical Apple Car. So I ask again: What if Project Titan isn't about creating a consumer machine at all? What if Apple isn't targeting Mercedes-Benz and BMW, but instead it's targeting Uber and Lyft, or indeed New Flyer, one of the largest manufacturers of municipal busses in North America?
What if the Apple Car isn't something we'll ever want or need to buy, just something we'll call on demand? Something that will drive itself to where we are and then take us to where we want to go before quietly disappearing over the urban horizon?
In the wake of Apple's still-quite-effective news blackout on the supposed Project Titan we're left speculating and pondering with thinkpieces like this. But, if Apple were to enter the automotive world not as a competing manufacturer but indeed as a viable alternative to the very notion of car ownership, that could shake up the industry in a big way. It'd be a little bit like how a certain phone shook up consumer electronics a few years back.
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