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TECHNOLOGY A23
Saturday 24 October 2015
Tech companies face rocky road on the way to making cars
BREE FOWLER In this Saturday, Jan. 3, 2015, photo, people check out the Tesla Model S at the Tesla showroom at cites the $2 trillion auto in-
AP Technology Writer the the Third Street Promenade in Santa Monica, Calif. dustry as a potential new
NEW YORK (AP) — Silicon opportunity at a time when
Valley may think it can build Associated Press sales of smartphones, tab-
a better car. But should it? lets and PCs are seeing
As tech giants like Google burn, with about $270 billion ogy into the world safely.” dent. slower growth globally.
and Apple look to auto- in the bank combined. But The strategy is consistent APPLE Milunovich noted, how-
mobiles as the next frontier the challenges of the car with how Google currently ever, that cars have signifi-
for innovation, they face a industry may be steering operates. It relies on other Apple CEO Tim Cook told cantly lower profit margins
looming reality: Cars are a them to find ways to revo- companies to produce the an audience this week that than iPhones.
lot harder to manufacture lutionize automotivetech- devices powered by its soft- the automotive industry is Apple, which makes most
and sell than smartphones. nology without becoming ware. Most smartphones, ripe for “massive change,” of its money from iPhones,
Industry veterans and critics actual automakers. for example, operate on its with new software, electric reported $39.5 billion in
warn that the auto business GOOGLE Android software. But the motors and self-driving ca- net income for its last fis-
is a different animal. It’s Mountain View, Califor- company doesn’t make pability becoming “much cal year, on total sales of
fraught with massive costs nia-based Alphabet, the any of the devices. more important, in a huge $182.8 billion. GM reported
to erect auto plants, com- new holding company for If its self-driving system way.” only about $4 billion in prof-
plexities in developing new Google and its affiliated makes it to market, the But Cook avoided com- it for its last fiscal year, on
sales and service systems, businesses, has spent six company could license the menting on reports that Ap- sales of $151.1 billion.
and daunting liabilities in- years working on cars that software for a fee or, per- ple may be building its own Apple outsources manu-
volved when human lives can drive without human haps, making it free to use car, according to a video facturing to contractors in
are at stake. assistance. But the compa- like Android. recording of his remarks Asia. That may be more dif-
Automakers recalled a re- ny says it doesn’t want the That’s because it makes Monday at a technolo- ficult to do with cars, said
cord 64 million vehicles in responsibility of building the most of its money from ads gy conference sponsored Jack Nerad, an analyst at
2014, shattering the old re- robotic vehicles. within their popular online by The Wall Street Journal. Kelley Blue Book’s KBB.com.
cord of 30.8 million set in Instead, it plans to make services. If they no lon- “What we really want, While an iPhone is complex,
2004. the self-driving system avail- ger need to drive, people hopefully in the short term, with about 1,700 compo-
General Motors Co. has able to automakers that al- might spend time in their is we’d like people as they nents in an iPhone 6 Plus,
had to pay $5.3 billion to ready have factories, deal- cars watching videos on enter their car to be able it pales in comparison to
cover fines, victim com- erships and experience. Google-owned YouTube to have an iPhone experi- a vehicle, which has some
pensation and the recall “We have enormous re- or seeking information on ence in their car,” he said. 10,000 parts.
of millions of vehicles for spect for the expertise of Google’s search engine — Apple has developed soft- Sergio Marchionne, CEO of
faulty ignition switches. the automotive industry both of which show ads. ware for automakers called Fiat Chrysler Automobiles,
Toyota Motor Corp. paid a and how big and complex But licensing their technol- CarPlay, which lets driv- sees a car in Apple’s future,
$1.2 billion fine for failing to a job it is to manufacture a ogy won’t insulate it from ers use an iPhone and its though he doubts they’ll
report safety defects, and vehicle,” company spokes- safety issues. The company voice-activated assistant attempt to manufacture it
Volkswagen Group has set woman Courtney Hohne potentially could be held li- Siri to operate some elec- themselves. He welcomes
aside $7.3 billion for the po- said. “We’ll partner with able if one of its self-driving tronic controls and enter- the competition.
tential costs of its emissions many different compa- cars goes awry and injures tainment systems. “I think that this industry
scandal. nies to bring this technol- or kills people in an acci- In a research note, UBS in general needs to open
“I think, like so many Silicon analyst Steven Milunovich up to disrupters,” Mar-
Valley techies, that they chionne said in an inter-
believe they are smarter view on CNBC Wednesday.
than the world’s automo- “Whether it’s the Google
bile business, and that they car or the Apple car...
will do it better,” said Bob it’s going to change the
Lutz, a retired General Mo- traditional nature of car-
tors vice chairman. “No making.”UBER
way.” Self-driving technology has
He added that tech com- also piqued the interest of
panies would pay the Uber, the fast-growing Sili-
same high prices for expen- con Valley startup that op-
sive components such as erates a ride-hailing service
electric car batteries, likely in cities around the world.
pushing retail prices of their Uber said earlier this year
vehicles out of reach for that it was partnering with
the average driver. Carnegie Mellon University
“It will be a huge money to research and develop
loser,” Lutz predicted. new technologies for map-
To be sure, Google and Ap- ping, vehicle safety and
ple have plenty of cash to autonomous driving.q
