Harvard Business Review’s Apple Car dreams

Thoughts on Apple Car, Part 115

I would like to put together two HBR pieces from some time ago, and look at what perspectives they can add to the Apple Car discussion in this series.

We’ll do a face-off:

Opponent A: Eddie Yoon

Eddie Yoon is the founder of Eddie Would Grow, a think tank and advisory firm on growth strategy and a director at The Cambridge Group. His book, Superconsumers, was published by HBR Press in December 2016.

His vision for the Apple Car is to…

…create a new category of self-driving cars that is very different and is less focused on cars and driving itself and goes beyond to disrupt multiple industries at a time.

I can agree.

A similar thought:

We see a lot of transition vehicles these days — Teslas, Volvos, etc. Those will be remembered as the Blackberrys of autonomous vehicles.

Not so smart, not so easy to use.

An Apple Car must strive for a smartphone revolution moment, that shook many industries at once.


Let’s dive deeper into Eddie’s thoughts:

Apple has a great intuitive feel for how consumers see a market, versus how manufacturers see it.
I doubt Apple designers will see the market in traditional segments, such as small cars, luxury/sports cars, SUVs, trucks and minivans/vans.
I think they will see it as different use-cases for why consumers get into a car – commuting (small cars), fun toys (luxury/sports cars), useful tools (trucks, SUVs), and living rooms on wheels (minivan).

That part is funny, because Eddie is suggesting the very same segments he criticises–only with different names. Read again :)

I am with him, though, on the nature of use cases Apple could go after. I phrase them like this:

  1. Work (Commuting, mobile office, getting things done on the road)
  2. Workout (Staying fit while travelling)
  3. Hangout (Entertainment, living room feel, friends & family time)

Note that for each of them, there’s an existing Apple product tied to the use case:

  1. Mac or iPad
  2. Watch
  3. TV

Back to Eddie and his thought about the hangout use case, and what type of car it would suggest:

[T]he minivan is the guiding light.
In 1983, the original minivan saved Chrysler from bankruptcy. I’m not a car guy, but I absolutely love our Honda Odyssey minivan. It’s is perfectly designed for our family of five.
But it’s also clear that the minivan concept is due for an upgrade.

He’s right.

The minivan is the most natural predecessor of an autonomous vehicle, because it is designed around a need for space and maximum flexibility. As far as a traditional vehicle can do it, that is.

Many carmakers agree, and morph their vans into a basis for autonomous concepts, platforms or services:

There’s certainly something to the idea of making a living room out of a van.

Back to Eddie:

And if you can put a living room on wheels, what else could you put on wheels?
Think of the ultimate home office with printers, a desk, and video conference abilities so pharmaceutical reps and traveling sales people don’t have to squat at Panera or Starbucks all day.
How about a man cave on wheels? Or a kitchen? Could [Apple] figure out how to do a bathroom? Is that part of their play in health care?

No.

Their play in health care is:

Last point by Eddie:

My hope is Apple will do more than just sell more iPhones or use its technological prowess to create a safer way to drive.
This is an ambitious company, and it should aim for the seven-ten bowling split and try to crack the code on crashing the office, home, and car categories together.

Sure. We all wish for that, and many signs point into that direction. Neil Cybart calls it “ambition that know no boundaries” and recently assessed that “Project Titan is huge”.

So, Apple is on to something big. But let’s not get ahead of ourselves.


Opponent B: Michael Schrage

Michael Schrage, a research fellow at MIT Sloan School’s Center for Digital Business, is the author of the books Serious Play (HBR Press), Who Do You Want Your Customers to Become? (HBR Press) and The Innovator’s Hypothesis (MIT Press).

Michael started his essay on the possible implications of Apple making a car with a stance on Apple as an innovator:

Steve Jobs’ successors are at least an order of magnitude more credible as disruptive innovators than the heirs of Ford and Sloan.
The computer, software, telecoms, music, broadcast, publishing, photography, retail, and consumer electronics industries certainly believe so.
Apple demonstrably understands design, UX, and global supply chain alignment in ways few organizations ever have.
Who knows what an iCar might look, feel, or drive like? I don’t.
But the better and more challenging question is, how would the automotive industry’s incumbents respond to genuinely disruptive competition?
How might the industry splinter, shatter, or consolidate when truly well-endowed innovators commit to upending expectations around the DX – the Driving Experience?

He’s asking the right questions. His ambition is not to think about the design of the vehicle or service (as Eddie did), but much more about the industry implications.

That is:

Apple’s command of UX and technical infrastructure create multiple opportunities to transform the economics and expectations of every value-added aspect of the automobile experience.
Building a car is the least of it. Apple needn’t build a car any more than it must build an iPhone or an iPad (thanks, Foxconn).
All Apple has to do to force fundamental industry restructuring is do what the incumbents have not – redesign the end-to-end purchase and DX, not just the cars themselves.

Sounds easy, right?

They have certainly done this with iPhone and Apple Watch. Others have started to change the end-to-end experience, for instance Tesla.

But in terms of design, Tesla is a rather conventional design. Even their chief designer says so:

The auto space is cluttered with new entrants already, most of them coming from China–there will be more. They all try to solve the puzzle of the next dominating mental model of the mobility industry.

But what happens when the winning platforms are found? Like it was the case with iOS and Android, and app stores that took smartphone innovation to new heights.

Michael asks the same questions this way:

Even a modest Apple incursion into the automotive industry would likely prompt an entrepreneurial explosion of innovation – and innovative – partnerships.
To what extent might an automotive counterpart of “apps” and the “app store” generate new automotive expectations and value?

To a great extent. The car industry is way bigger than smartphones, for instance:

Developers are getting primed for that, or are they?


Who wins?