Apple Car Intended To Spice Up The Worldwide Automobile Industry Apple, the world pioneer in information processing, is extremely likely to break into the automotive market. The US corporation is currently aiming to develop self-driving electric vehicles produced by an automaker using a business model close to its iPhone production under a tie-up deal. I realised, a future Apple Car is considered likely to impact the economic environment of the automotive industry. After year-end stories by Reuters and Taiwanese news media on Apple's potential entrance into the auto industry, the US and Chinese high-tech corporations' share prices pushed upward. In the US, companies such as Velodyne Lidar, a manufacturer of light detection and range (lidar) sensors that serve as the "eyes" of self-driving vehicles, have drawn significant interest from investors. In China, investors flocked to Contemporary Amperex Manufacturing, the world's largest electric vehicle battery producer, and other EV-related component suppliers. An Apple Car will be a "mass" of high technology, analysts at US and European auto industry research firms said, indicating that it is possible to shift the suppliers of key automotive parts. Through the use of smartphone growth and manufacturing experience to build cars and through the horizontal division of manufacturing, the Apple EV project is projected to have a major influence on the auto industry. Apple is likely to concentrate solely on the design of cars while outsourcing manufacturing to companies such as Hon Hai Precision Industry, a leading Taiwanese producer of contract electronics, Foxconn. As in the case of iPhones, while exporting production, Apple is expected to dedicate itself to developing jobs, including self-driving technologies. The strategy is likely to shake the current vertical integration business model of the automobile industry, in which carmakers participate in the whole chain from design to manufacturing. The horizontal division of labour is already progressing in China's auto sector. Baidu, a major Chinese internet firm leading the advancement of self-driving technologies, announced this month that it will manufacture EVs on an original-equipment-manufacturing basis with Zhejiang Geely Holding Group, an automaker in China. In addition, in November, Didi Chuxing Technology took the wraps off an EV produced for its operation. The largest ride-hailing app in China, used by 550 million individuals around the world, plans to bring 1 million units into use by 2025. The EV will be produced for Didi by BYD Auto, a Chinese EV maker proud of its name. Magna International, a leading Canadian producer of vehicle components that has progressed on behalf of car manufactures to produce vehicles, is seen as a leading contender for producing the Apple Car. The Apple campaign has attracted attention from car manufactures as well. South Korea's Hyundai Motor said this month it was in early talks with Apple about a tie-up to create an EV. If obtained, a large order for production of the vehicle would likely help Hyundai to increase its capacity utilisation rate and sustain earnings. But the project may threaten the dominance of carmakers at the top of the market. Automakers could become subcontractors of Apple and lose their originality, an executive at a Japanese carmaker warned. Though Asian businesses are beginning to travel in an attempt to capitalise on the Apple Car initiative, the question is whether it is planned for Japanese communities. As in the case of smartphones and consumer electronics, there remains the fear that Japanese firms will surrender the initiative to Chinese and South Korean rivals.
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