Apple Car draws attention as future car business model

The automotive industry has been surfing the new transitional waves of CASE (Connectivity, Autonomous, Sharing Service, Electrification). As tech giant Apple with the world's largest market value seeks to team up with automakers, experts analyze that it will create completely novel shifts across the industry. 　

That explains why Hyundai Motor Group saw a surge of its stock price by 19.4% on Saturday when it was reported that Apple proposed to discuss the "Apple Car” project with the South Korea automaker. It is expected that the fate of the global automotive market will be determined by where Apple's partnership with Hyundai is headed.

All eyes are on which OS – Android or iOS – will base the ecosystem of electric vehicles that will be shaped in collaboration with Apple. In other words, what kind of relationship will be forged between Apple and its partner - a complete vehicle manufacturer? 　

If Apple wants its partnering complete vehicle company, which mass-produces and sells millions of units on a yearly basis across the globe, to play a role in the Apple Car project just as that of Foxconn, it can be a double-edged sword with a short-term spike in sales but a low profitability in the longer term. Decades’ corporate brand image in the automotive industry can be tarnished as well.

If platforms become the most essential element in the automotive industry just as they play a key role in smartphones, tech firms such as Google and Apple will inevitably grow bigger and more potent. Tesla's sudden pickup in business expansion as an innovative icon is threateningly sensational enough to make tech leaders including Apple get the jitters.


Do-Hyong Kim dodo@donga.com