Apple Inc, BMW in courtship with an eye on car collaboration.
One hundred owners of BMW’s i3 hatchback receive $1,000 upfront to participate in Pacific Gas & Electric Co.‘s 18-month trial, which is confined to the San Francisco Bay Area. BMW and Apple may rekindle a courtship put on hold after an exploratory visit by executives of the world’s top maker of electronic gadgets to the headquarters of the word’s biggest seller of premium cars.The Apple Car is taking another lap on the rumor circuit, with a new report from Reuters that Apple execs visited BMW last year to find out more about how BMW makes the (very cool) i3 electric car. “Apple executives were impressed with the fact that we abandoned traditional approaches to car making and started afresh. Peter Berman, a 70-year-old, semi-retired Los Altos psychologist, was selected from about 400 applicants. “My understanding is that we’ll get a text message that says ‘Hey, you’re charging your car right now, can you back off for an hour?‘” said Mr. Also, BMW is being cautious about sharing its manufacturing know-how because it wants to avoid becoming a mere supplier to a software or internet giant.
According to the report, Tim Cook visited BMW’s headquarters in 2014 and asked the carmaker’s board members very detailed questions about production of its i3 electric vehicles, which BMW manufactures using lightweight carbon fiber. The environment would benefit radically if everyone had an electric car, but as the electric cars become more popular, utility companies have to figure out ways to support them. BMW and PG&E, a California utility company, have joined forces in a trial that they’re calling the “BMW iCharge Forward” program, which they hope will solve the issue. I’m really curious as to how this is all going to unfold.” The PG&E-BMW pilot is one of myriad experiments under way worldwide as utilities try to anticipate what will happen if (or when) millions of electric vehicles pour onto city streets and highways. But utilities could also tap batteries for backup power when the grid is under strain or temporarily knocked out in an emergency, paying drivers for the electricity harvested from their parked cars.
BMW denied the claims of a potential collaboration, and Apple declined to comment. ”We need to get away from the idea that it will be either us or them. The drivers can select their preferred driving hours, which BMW will keep in mind when choosing which customers they’ll request to refrain from charging. It is too early to say whether this will be a replay of Silicon Valley’s Prometheus moment: The day in 1979 when Apple co-founder Steve Jobs visited Xerox’s Palo Alto Research Center where the first mouse-driven graphical user interface and bit-mapped graphics were created, and walked out with crucial ideas to launch the Macintosh computer five years later. We cannot offer clients the perfect experience without help from one of these technology companies.” “We do not collaborate to open our ecosystems but we find ways, because we respect each other,” BMW’s head of research and development Klaus Froehlich told Reuters. BMW has realised next-generation vehicles cannot be built without more input from telecoms and software experts, and Apple has been studying how to make a self-driving electric car as it seeks new market opportunities beyond phones.
When it came to speculating about Apple’s plans for a future car, the Reuters report referenced Steve Jobs’s infamous a-ha moment after visiting a Xerox research center in 1979 and getting the ideas for the first Macintosh. Each participant receives a $1,000 gift card at the beginning of the program, and at the end of the 18 months they’ll get a second one worth up to $540, depending on how many times they’ve complied with the delay. In Japan, people have been using Nissan Leafs for emergency backup power since the country took several nuclear reactors off line in the wake of the Fukushima disaster.
Since the visit, there has been a reshuffle at the top of BMW, with Harald Krueger, appointed BMW Chief Executive in May, in favour of establishing his own team and his plans for BMW by year end, before engaging in new projects, a person familiar with his thinking told Reuters. A further complication was the departure of BMW’s board member for development Herbert Diess, who played a leading role in initial discussions with Apple. Why this matters: With over $200 billion in cash as of its last earnings call, Apple certainly has the resources to take a few risks and enter the auto industry.
Car technology has become a prime area of interest for Silicon Valley companies ranging from Google Inc, which has built a prototype self-driving car, to electric car-maker Tesla Motors Inc. Diess has said the German auto industry needs to undergo radical change because consumers are demanding more intelligent cars and anti-pollution rules mean the next generation vehicles will increasingly be low emission electric and hybrid variants. In 2030, only two generations of new cars away in auto manufacturing time scales, only a third of vehicles will be powered by a conventional combustion engine alone, experts predict. “It means that in two cycles we will shut down two thirds of our engine manufacturing,” Diess told a panel discussion in July last year, adding that the value chain for new electric cars is already shifting, with vehicle batteries made mainly in Asia. “The second part is that the car will become intelligent, part of the Internet,” Diess continued. “And the strong players in this area are in the United States, in the software development area. We will surely need to find alliances in this field.” Carmakers including BMW have already developed next generation self-driving cars, vehicles which need permanent software updates in the form of high-definition maps allowing a car to recalculate a route if it learns about an accident ahead. Earlier this year, BMW’s new R&D chief Klaus Froehlich said his company and Apple had much in common, including a focus on premium branding, an emphasis on evolving products and a sense of aesthetically pleasing design.
Asked, in general terms, whether a deeper collaboration beyond integration of products like the iPhone would make sense, Froehlich initially said BMW would not consider any deal that forces it to open up its core know-how to outsiders. The tech giant would have an edge on the dashboard, its CarPlay infotainment system connecting iPhones to cars, but would be at square one with the rest of the car, Noble said.
If Apple decided to sell a car it could make sense to find a partner to help with industrial scale production, retail and repair, since demand for such a vehicle could be high.