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Autonomous Driving: Apple Could Run, but It Couldn’t Hide
The secret is revealed
After years of secrecy, Apple (AAPL) has unraveled its own mystery, admitting that it’s building autonomous systems for cars. Tim Cook, Apple’s CEO, revealed this fact in an interview with Bloomberg in June 2017, formally lifting the veil on Apple’s shadowy vehicle project that some have claimed is known as Project Titan.
In a world where companies are seeking to expand beyond their traditional industries, it was only a matter of time before Apple’s autonomous vehicle business became a reality.
Actions speak louder than words
Though Cook failed to clearly state Apple’s vehicle ambitions, the moves the company has made recently are revealing. These moves suggest that, like Alphabet’s (GOOGL) Waymo, Apple is keen to develop an autonomous driving system that it could license to vehicle manufacturers, taxi operators, or car rental companies.
According to a recent Bloomberg report, Apple has partnered with car rental company Hertz (HTZ) in its autonomous driving software project. The report stated that Apple would fit several Hertz vehicles with its self-driving technology for road trials. Earlier this year, regulators in California granted Apple a permit to test driverless vehicles on public roads in the state.
A $77 billion revenue market in view
There are billions of dollars in revenue to be made in the market for autonomous driving systems. As we can see in the chart above, research company Boston Consulting Group (or BCG) expects the autonomous vehicle market to be worth $42.0 billion by 2025 and $77.0 billion by 2035. Apple could tap into this market to drive its top line growth and reduce its reliance on iPhone sales.
However, success in the autonomous driving industry is unlikely to come easily. Winning licensing businesses from established automakers will be difficult because prominent vehicle manufacturers such as General Motors (GM), Ford Motor Company (F), and BMW are developing their own self-driving systems.