Apple Buys Self-Driving Start-Up Drive.AI to Bolster Project Titan

On 26th June 2019, Apple acquired—a self-driving start-up—in a move that is expected to give a massive thrust to its autonomous vehicle technology. While the acquisition terms were not made public, it is believed that Apple acquired the struggling start-up for less than USD 77 million. The acquisition bolsters Apple’s autonomous vehicle initiative—Project Titan—and will help the smartphone giant to effectively compete with rivals such as Tesla and Waymo, which have a head start over the former.

Meanwhile, not much is known about Apple’s Project Titan, except that the project lately transformed into a self-driving shuttle programme designed to transport employees around Apple’s office campus in Silicon Valley. However, the latest acquisition is quite telling of Apple’s ambitions in this space.

MarketsandMarkets™ View Point:

Abhishek Deshpande, Senior Research Analyst in the Automotive & Transportation sector at MarketsandMarkets™, shares his views.

Apple has the expertise required for developing software required for autonomous vehicles. The company has the potential to develop an autonomous vehicle by offering better integration of hardware, software, and services than its potential competitors in the market and has already made some headway in this direction. For instance, Apple retrofitted several Lexus vehicles with a range of sensors and its self-driving software and was believed to have as many as 70 autonomous vehicles on roads as of May 2018.

Minimal vehicle accidents, improved engine productivity, and reduced fuel consumption are some of the drivers for the growth of semi-autonomous and autonomous vehicles globally. With technological advancement, various dynamic mobility applications such as Queue Warning, Speed Harmonization, Cooperative Adaptive Cruise Control, and more are being introduced. These applications increase the safety and ease of driving. More use of these applications will boost the semi-autonomous vehicle market and will open gates for fully-autonomous vehicles. These advancements and the increasing demand for connected vehicles, which comprise telematics, infotainment, and combined telematics and infotainment, are some of the factors for the growth of semi-autonomous and autonomous vehicles.


Global Autonomous Vehicle Market

With the advent of self-driving technology, vehicle manufacturers and suppliers will likely need to expand their traditional capabilities, collaborating with autonomous vehicle technology suppliers, software developers, and others to provide a much broader range of product choices. New entrants have already started disrupting the competition in the supply base and are likely to continue to be competitive.

Global Autonomous Vehicle Market 1

Impact on Top Competitors

Apple’s buying of has happened at the right time when all the major competitors in the autonomous vehicles market ecosystem are focusing on R&D and other strategic investments. For instance, Intel Capital created a USD 100 million Connected Car Fund for investing in research and development in connected car technology. Tesla is now equipping all its vehicles, including Model 3, with the hardware required for full self-driving capability at a safety level considerably superior to that of a human driver. Boston-based self-driving start-up Optimus Ride announced that it would provide rides in its golf cart-sized vehicles that will run in pre-defined geography and route. Other companies like Waymo, Uber, Ford, and General Motors are also leading in the testing and deployment of autonomous vehicles.

Government initiatives towards deployment of autonomous vehicles

North America is expected to lead the market in the autonomous and semi-autonomous vehicle space due to the increasing demand for safety and security features in vehicles. United States is home to major manufacturers like Ford Motors, General Motors, and Fiat Chrysler Automobiles (FCA). The large customer base and high disposable income of end-users in the region have fuelled the demand for high-end vehicles, which in turn has resulted in R&D investments by local and international automotive OEMs. California has taken the pole position in the country in the development of policy framework around autonomous vehicles, and hence, most manufacturers across the globe have invested in the state. Other 15 states of the US are expected to adopt the rules and regulations of California pertaining to autonomous vehicles. Volkswagen Group, Daimler AG, Nissan Motor Corporation, Robert Bosch GmbH, and Continental AG are some of the leading players who are already testing their semi-autonomous and autonomous vehicles in California.

Europe is another prominent region which has been at the forefront of innovative technology, thanks to its lineage of being home for several mass market and premium automakers. Countries in the region are working to ensure common rules concerning autonomous driving. For instance, the UK government has set up the Centre For Connected Autonomous Vehicles (CAV) and is working on legislation to allow testing on motorways in the country. In Germany, the Autonomous Vehicle Bill was enacted in June 2017, modifying the existing Road Traffic Act defining the requirements for highly and fully automated vehicles, addressing the rights of the driver. The Netherlands is leading the race in the testing of autonomous vehicles in the region. The country scores highly in road quality index, supporting regulations, and exposure to autonomous testing.

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