Fear of Apple Entering the Connected Car Market has Renault Racing to Beat the Clock
This week we learned that Apple had a secret Titan team in place in Berlin for over a year talking to BMW, Daimler and Magna – who appears to be the one that’s hungry enough to want to work with Apple on a next generation electric car. Fast forward to today and we learn from Automotive New Europe that “Renault Connected Car Director Thierry Viadieu is confident that his company will be in the car business a decade from now but not so sure Apple or Google will.
Of course the mere fear of Apple entering the car business has them rushing to potentially partner with Apple and Google competitors such as Amazon, Microsoft, HP and Accenture, according to Viadieu. That’s a clear sign that tells you the depth of their fears. Below is just a snippet from Viadieu’s interview relating to Apple.
Q: What are the main challenges in the move toward connected cars?
A: Keeping the connectivity fresh once we have sold the car. Cars have a product cycle of about five years. Connectivity has a life cycle of about 18 months. We have much longer cycles not because we are dinosaurs, but because of the heavy set of constraints we face in terms of regulations.Customers are already used to frequent automatic updates for their PCs and smartphones. We must head in this direction with connected cars.
Q: What roles will Google and Apple play?
A: That is the question everyone is asking and the possible roles are clearer for Google than for Apple. Google wants to enter the car the same way it got into the smartphone – via the operating system. Their target is to have Android running the car. With Apple it is more complicated to figure out what they are doing. Will they jump into the automotive business themselves or partner with someone? Maybe they could buy Tesla. On one hand they have a lot of money to do so. On the other if they analyze what becoming an automaker means, they will think twice. This business is very tough. Someone said to me recently, in 10 years you will still be in the automotive business for sure. Google and Apple may not be interested anymore.
That line of thinking makes me think back to Microsoft’s CEO Steve Ballmer when the iPhone was about to enter the market. The phone market was another ‘tough market’ in 2007. Ballmer stated in an interview that “They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I’d prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get. There’s no chance that the iPhone is going to get any significant market share.” Yes, famous last words. Earth to Renault’s Thierry Viadieu: underestimating Apple has been proven hazardous to careers.
Perhaps Renault should give up the ghost while they’re ahead and humbly contact Apple to offer them their services in making an advanced connected car so as to give Magna a run for their money. In the end it would be better than losing to Apple in an embarrassing way in the future. Just ask Ballmer (ha!