Apple studies self-driving car, auto industry source says

FRANKFURT/SAN FRANCISCO (Reuters) - Technology giant Apple ( AAPL.O ) is
looking beyond mobile devices to learn how to make a self-driving electric car,
and is talking to experts at carmakers and automotive suppliers, a senior auto
industry source familiar with the discussions said on Saturday.
The Cupertino, California-based maker of phones, computers and, soon,
watches is exploring how to make an entire vehicle, not just designing
automotive software or individual components, the auto industry source said.
"They don't appear to want a lot of help from carmakers," said the source, who
declined to be named.
Apple is gathering advice on parts and production methods, focusing on electric
and connected-car technologies, while studying the potential for automated
driving, the source said.
"Fully automated driving is an evolution. Carmakers will slowly build the market
for autonomous cars by first releasing connected and partially automated cars,"
the auto industry source said. "Apple is interested in all the potential ways you
can evolve the car; that includes autonomous driving."
Whether it will build and release an electric car or a more evolved autonomous
vehicle remains to be seen, the source said.
But clearly Apple has sharply raised its ambitions in automotive technology. Car
technology has become a prime area of interest for Silicon Valley companies
ranging from Google Inc ( GOOGL.O ), which has built a prototype self-driving
car, to electric car-maker Tesla Motors Inc ( TSLA.O ).
An Apple spokesman in London on Saturday declined to comment on "rumors or
speculation".
Trying to build an actual car would mark a dramatic shift for the maker of the
iPhone and iPad. Apple often researches projects which are then discarded, but
has so far mainly stuck to its core expertise in mobile and electronic devices.
The Wall Street Journal reported on Friday that Apple had set up a secret lab
working on the creation of an Apple-branded electric car, citing people familiar
with the matter. The lab was set up late last year, soon after Apple revealed its
forthcoming smart watch and latest iPhones, the Financial Times said.
The Journal said that the Apple project, code-named "Titan", employed several
hundred people working a few miles from Apple's headquarters in Cupertino.
Apple executives met with contract manufacturers including Magna Steyr in
Austria, a unit of Magna International ( MG.TO ), the Journal said. A Magna
spokeswoman declined to comment.
THE PATH TO SELF-DRIVING CARS
Autonomous driving is likely to emerge progressively as driver assistance
systems become more sophisticated.
Already, carmakers such as Daimler ( DAIGn.DE ), BMW ( BMWG.DE) and
Volkswagen's ( VOWG_p.DE ) Audi ( NSUG.DE ) have revealed cars that can travel
long distances without human intervention.
Analysts at Exane BNP Paribas have said they see a $25 billion market for
automated driving technology by 2020, with vehicle intelligence becoming “the
key differentiating factor”. But the brokerage does not expect fully automated
cars to hit the road until 2025 or 2030, in part due to regulatory hurdles.
Short of building entire cars, there is money to be made from the software to
run a self-driving vehicle, as well as the services associated with autonomous
driving, such as mapping, car-sharing and car recharging services, the auto
source said.
"It's a software game. It's all about autonomous driving," the industry source
said.
Apple may be pursuing mainly auto industry expertise rather than full-scale
partnerships with established car companies.
With its soon-to-be-launched Apple Watch, the company had held limited
discussions with Swiss watchmakers, but no broad-based alliance emerged
from the talks.
Instead of partnerships, Apple pursued a go-it-alone strategy and turned to
poaching talent from top watch brands.
Two different sources have told Reuters that Apple has tried to recruit auto
industry experts in areas such as robotics.