What is the premium market in future mobility?
Thoughts on Apple Car, Part 137
We all know Apple is a company that is going after the premium segments of any market it enters. Sometimes, as is the case with tablets or wearables, the premium segment pretty much is the market and Apple the only relevant player.
The question is, what will be the top-notch premium segment of the future mobility market, that Apple is preparing to go after? In this crowded field of manufacturers, they will hardly be the only relevant player any time soon.
What are the current market segments in individual mobility?
Besides the theoretical trends that occur on paper, and that seemingly everyone has their own acronym for (CASE at Daimler, ADAS at BMW), there are two substantial movements currently in the market:
- The micromobility attack
- The autonomy transition
The first is very well documented by Horace Dediu and his new company Micromobility Industries. The second was actually also discussed by Horace in his podcast Asymcar, but he abandonded the topic when he discovered the disruptive force of micromobility. The whole auto industry, though, and most of big tech are still moving in the direction of autonomy.
There’s actually an overlap between the two, but we’ll come to that later.
The micromobility attack
This movement is driven mostly by the rise of e-bikes with pedal assist systems, and electric kick scooters. Both have stormed city landscapes all over the world in the last 5 years and overcame other modes of individual mobility, for example the sale of gasoline mopeds. This industry was born with online sharing business models from the start.
The premium segment of micromobility
The question really is, in a market that is now mostly cheap scooters and expensive e-bikes, what will be the premium market segment of the two modes?
Horace makes the case that it’s currently a textbook low-end disruption: The shared micromobility market is set to unbundle the car.
In this market though, there is a premium segment being created.
Unagi is a prime example, founded by former Beats Music CEO David Hyman who negotiated the Apple deal, it calls itself the “iPhone of scooters” and wants to occupy the premium owned scooter segment.
One selling point they focus on is fit and finish. The Unagi is supposed to be the Mercedes of Micromobility and they try to achieve that with as much vertical integration as possible. They don’t see autonomy being one of the main premium features, though.
The people at NantMobility disagree. Their self-balancing Stator scooter is also heavy on design, material, fit and finish — but also lays the groundwork for autonomy with its balancing sensors. It is engineering work similar to what Segway-Ninebot is doing, but their company is more about covering all possible niches of micromobility at once — not just the high end.
The autonomy transition
This one has been going on for almost a decade. After the DARPA Grand Challenge in 2005 Google invested in selfdriving car development and later autonomous technology to later launch Waymo. Uber and Didi are driving development of shared autonomy further, and Tesla started baking selfdriving capability into its cars in 2015. Lastly, Apple untypically announced it is looking into autonomous systems as well, because it’s the „mother of all AI projects“.
The premium segment of autonomous mobility
A totally different question though is who and what product will create and occupy the most profitable segment of this market? Since the industry so far put billions of dollars into research and development but has nothing marketable and certainly not profitable to show, this question is still unanswered.
If we can get any clues from the smartphone industry and use it as a lense to assess mobility disruption, as Horace does, we learn that what sets Apple apart is design and a well-considered lock-in effect. Design is about how autonomy works and not just how it looks. Today’s self-driving car concepts however, still look like cars — and that’s about to change once user centric design is applied to this new kind of product. And this, I suspect, is what will create a profitable premium market segment.
The overlap of auto and micro
What is hardly missed in an overcrowded marketplace which is in its early stages of development and growth, is that the original categories will most certainly change.
While the initial trajectory was for cars to go autonomous slowly, and for bikes and scooters to go electric much faster than cars, the situation is more complex.
Just looking at a future premium segment, there are overlaps.
Since there is a product segment of autonomous driving in both scooters and cars, we can consider this being one criteria of a premium offer. Tortoise is going after this segment in scooters, because it believes self-driving scooters will solve the operational hassle of balancing the fleet of shared scooters in a city.
Another criteria will be design, fit and finish. This is a no-brainer. However, it may be harder to achieve in scooters with their simplistic hardware which is in consequence more constraint for high end innovation. Making design all the difference is more feasible in autonomous cars, since design and brand have been pretty much the only differentiators in cars over the last 40 years.
To conclude, the premium segment is not so much about features or distinct product offerings, but more about brand and design. A key playing field for Apple. Whether their autonomous aspirations cover multiple products in this category, remains to be seen.