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2015-03-11

If Apple gets into the car business, its biggest competitor won't be Tesla

If Apple gets into the car business, its biggest competitor won't be Tesla

Apple's reportedly making a foray into the auto business, and Elon Musk is reportedly trying to make the narrative all about Tesla and its electric cars.

But if Apple really is making a move into cars, its big competition won't be electric cars per se.

Sales of electric cars, at last tally, didn't even account for five percent of U.S. auto sales. In fact, the percentage of electric cars on the roadreportedly shrunk in 2014 compared to the prior year. The real market for Apple is the connected car.

In a Goldman Sachs report analysts project that the 'connected car' - now less than 10% of auto sales - will rise to a staggering 80% of new autos by 2020.

The 'connected car' will be more valuable than the electric one

That's not the only big change expected in just five years. The analysts predicted "automated driving" will become a reality on highways "by around 2020."

As for the 'connected car,' Goldman's chart suggests that instead of duking it out with the wily Musk for a piddling percentage of the automotive industry market share, Apple will be taking on Ford - which is trying to push more apps into its cars already - General Motors, and Mercedes Benz, which just won the 'Connected Car of the Year' award.

Whatever happens, it's clear that Tim Cook is ambitious

Big hurdles ahead for connected car makers include improving sensor technology, automatic breaking and coming into compliance by 2018 with federal standards mandating rear-view cameras in cars.

Right now, between Apple Pay, the long-rumored Apple TV and now, the Apple Car, Tim Cook clearly is eager to take his company into a number of new verticals. Apple is focused on disrupting everything from the automotive and payment processing industries, all the way down to the camera-on-a-stick business.




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