In the beginning it was the smartphone, then it came the smartcar

Could a smartphone become the chassis of the smart car?

Who would ever have imagined a connection between a smart phone and a car, just 5 years ago?  At that time cell phones, and smart phones, were already widespread and one could see that cell phones were being used in cars (by passengers as well as -as bad as one should say- by drivers). So were shoes. And clearly nobody would ever pretend shoes impacting on cars.

Yes, cars were more and more equipped with electronics, and software, but they were using standard components or, in a few cases, components specifically designed to be used in cars. 
In 2007, though, Steve Jobs made a strategic decision that was bound to change Apple. He decided that Apple had to design and develop its own chips for its smart phones. At the same time that Steve Balmer voice his, now iconic, prediction:

"There is no chance the iPhone is going to get any signficant market share. No chance"

the other Steve decision was leading Apple onto a dominant role in the smart phones market. Today Apple has a sizable share of the smart phone market but more importantly it has almost 100% of the margin share of that market. All other players are basically breaking even!

Read the nice article written by Steve (yet another) Cheney on Apple 's insurmountable platform advantage.

Well, although impressive where is the connection between smart phones and smart cars? Why am I suggesting (based on Steve's article) that the smart car will be an offspring of the smart phone?

If you look at cars, there is a clear trend towards autonomous systems that share a common "soft" infrastructure. This infrastructure has many facets and several players are claiming ownership: the car manufacturer for the monitoring and maintenance, the service providers for enriching the travel experience (from entertainment to guidance), the road service for traffic management...

If you look at a smart phone OS you'll find basically the same components, where the road service is substituted by radio access management.

From a software point of view the differences are not that big. And then there is the problem of the hardware. Apple advantage over the competitors is on the vertical integration that is creating both a closed (efficient) and open (attracting developers) environment. 
Both software and hardware require gigantic investment and the pace of innovation requires significant volume to sustain the economics. Tesla, an amazing car where software is playing, along with vertically integrated hardware (for energy management), a crucial role is selling some 100,000 vehicles per year. That is about the number of iPhones sold by Apple in 10 minutes during the launching week end.  Clearly there is no comparison. And don't underplay the sophistication of a smart phone just because it happens to be smaller than a car. Its 2GB of OS are comparable to the software size of a car. Back in 2011, the estimate was for 100 million lines of code to run the 100 or so computers in a car. More recent estimates, rising from the rigging of Volksvagen cars to cheat on emission during testing, put the number in the 20 million lines of code. There are so many processors in a car that is difficult to know the exact number. 

The point, however, is that a smart phone OS compares in both functionality and complexity to the software running a car. And the economy of scale is clearly tipping towards the smart phone. 

Hence the reasoning of Steve Cheney that Apple could indeed be considering entering the smart car market, providing the inner engine and possibly the experience design leaving to third party manufacturers the assembly.

We'll see. 2019, the date that many indicate as potential debut, is not that far away.

Author - Roberto Saracco

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