Fiat Chrysler CEO: Apple Inc Better off Out-Sourcing Its Autonomous Car

Many believe that tech giants such as Apple and Google lack expertise in the dynamics of car making

There appears to be rapid progress in autonomous driving technology, and the headway tech companies already possess algorithms necessary for smooth functionality. However, many believe that tech leaders such as Alphabet Inc (NASDAQ:GOOGL) and Apple Inc (NASDAQ:AAPL) lack expertise in the dynamics of car making.

Ever since the news of a self-driving gizmo broke out, people have suggested repeatedly that tech companies, which pioneer in the Artificial Intelligence (AI) required to operate the autonomous car, will at some point need to partner with a conventional automaker since they know what a consumer is looking for in a vehicle.

At the Geneva Auto Show’s press day, Fiat Chrysler CEO Sergio Marchionne said that the car makers are more than equipped to handle such a venture and pointed out that it would be a much more efficient step for Apple rather than getting into the intricacies of the automobile industry.

Mr. Marchionne described the tech giant’s intentions towards an Apple Car, which is developed in-house, as a disease. Further elaborating on his analogy, he stated that “Illnesses like this come and go, you will recover from them, they're not lethal."

While Mr. Marchionne’s suggestion does make sense, he seems to forget Apple’s ability to surprise the world. Apple, though recently surpassed by Google’s parent company Alphabet Inc., is one of the most valuable companies in the world with distribution and operations in almost every corner.

Given its aforementioned magnitude, it seems quite unlikely that the California based company will trust anyone else with the integrity and perfection of its product. More so, it is quite apparent that Apple has ample resources to develop a team that would poise it for an entry into the automobile industry.

Apple supplier ARM gears up for autonomous cars

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Connected and driverless cars are a "great opportunity" for the chipmaking industry, according to the chief executive of British semiconductor company ARM Holdings, after reporting a surge in earnings.

ARM, which is a supplier to many device manufacturers including Apple, reported a 14 percent rise in revenue in the fourth quarter of 2015 to $407.9 million. Profit before tax was up 17 percent to £138.7 million ($200.7 million) year-on-year. Royalties for its technology surged 31 percent on the year.

Speaking to CNBC after the results, ARM CEO Simon Segars, said that the increasing amount of chips in cars is a big focus for the company.

"One particular interest right now that's growing strongly is automotive. We look at the future of that and see the potential for a hundred times growth in computing power in cars which is pretty similar to what we've seen over the past five years in smartphones," Segars said.

"In terms of the market that we can address in 2020, we see that as a $15 billion silicon market which when you do the maths, works out to about $150 of silicon per car. Now you compare that to a smartphone…its' about seven to eight times the silicon content, so great opportunity to us."

Chipmakers are looking for new streams of revenue as the sales of smartphones start to slow -- the auto industry has shown much promise.

 Established carmakers as well as technology companies such as Google have all been touting the potential of connected and driverless cars. These vehicles will contain a vast number of chips and sensors in order to recognize the world around it and take autonomous decisions such as emergency braking.

Segars added that while margins on some of those chips will be "very inexpensive", the ones that will be doing the "real computational thinking" such as identifying emergency situations, would "command pretty reasonable margins".

The chief executive's comments come as ARM warned in its earnings outlook that "increased economic uncertainty may influence consumer and enterprise spending, potentially impacting semiconductor revenues and industry confidence". Shares were down over 5 percent.

Segars said that while semiconductors for cars might not be an immediate revenue driver, the company invests in future technology.

"Royalties that are generated today are from products that were in R&D maybe as much as 10 years ago, in some cases 20 years ago. So we really do take a long term view on investments," Segars told CNBC.

ARM is not the only technology firm hoping to get its products into future cars. Processor firm Nvidia, South Korean electronics giants Samsung and LG and Canada's BlackBerry are among some of the companies hoping to take a slice of the developing connected and driverless auto market.

Daimler CEO says Apple, Google making progress on car

Daimler chief executive officer Dieter Zetsche told German weekly Welt am Sonntag that a recent trip to Silicon Valley revealed that Apple and Google have made more progress on automotive projects than he had assumed.

Several carmakers and Silicon Valley companies are working on developing a self-driving car. Google tested its own prototype vehicle in 2012, to which Daimler’s luxury brand Mercedes-Benz responded by developing an S-Class limousine which drove 103 kilometers without needing any driver input.

Rumours have swirled that rival Apple is also working on a car, although the company has never confirmed this.

“Our impression was that these companies can do more and know more than we had previously assumed. At the same time they have more respect for our achievements than we thought,” Zetsche told the paper.

Zetsche and a handful of senior managers met with around 70 companies in Silicon Valley, the paper said, without naming them.

“There were concrete talks. I will not say anything about the content. It was not just about the fact that there is an innovative spirit in the Valley. We know that already. We wanted to see what drives it, and all the things that can be created from it,” Zetsche told the paper, explaining that they had also looked at start-up firms.

Zetsche said he expects Mercedes-Benz to post significant growth in the United States this year. Overall he sees the market for passenger cars growing between 1% and 1.5% in 2016, Welt am Sonntag said.

Separately, Zetsche said that officials from Germany’s vehicle authority KBA had spent three days testing various Mercedes and Smart models to see if their emissions violated emissions standards.

“To my knowledge, no conspicuous emissions levels were found,” Zetsche told the paper.

Zetsche: Silicon Valley is Serious About Building Cars

It's no secret that companies like Google and Apple are getting into the car business, but Daimler CEO Dieter Zetsche learned in a recent meeting with several Silicon Valley firms that those two tech giants are further along with their automotive projects than he had thought.

The chief of Mercedes-Benz' parent company met with around 70 Silicon Valley companies, including startups, reports Automotive News. The executive would not name the firms in the meeting, but said he was impressed with how far they've come on their own.

"Our impression was that these companies can do more and know more than we had previously assumed. At the same time they have more respect for our achievements than we thought," Zetsche said in an interview with German weekly Welt am Sonntag.

"There were concrete talks. I will not say anything about the content. It was not just about the fact that there is an innovative spirit in the Valley. We know that already. We wanted to see what drives it, and all the things that can be created from it," Zetsche continued.

Mercedes has been at the forefront of self-driving technologies, having received an autonomous testing license from Nevada for its new 2017 E-Class. The company says that car only needs software tweaks to be fully autonomous. But with the introduction of rival systems like Tesla's Autopilot feature for the Model S, the German automaker's lead has begun to slip.

John Krafcik, Google Self-Driving Car Project CEO and former TrueCar boss, announced in Detroit earlier this month that company is looking for partners in the auto industry. Meanwhile, Apple has been poaching talent within the industry and has been rumored to be working on a car of its own, though it has yet to officially confirm this.
It's unknown exactly what was discussed in those meetings, but clearly whatever it was left one of the industry's top execs impressed and perhaps a little worried.

Apple, Google making progress on self-driving cars, Daimler Zetsche says

Companies working on self-driving cars have made more progress than assumes, said Daimler CEO Dieter Zetsche after a recent trip to Silicon Valley.

Reuters cites a report in a German weekly newspaper, Welt am Sonntag, that quotes Zetsche after he visited companies like Apple and Google.

It’s well known that Google is developing a self-driving car, and rumours about Apple’s plans for a self-driving car have been around for a while. Apple has never confirmed any such plans, however.

"Our impression was that these companies can do more and know more than we had previously assumed. At the same time they have more respect for our achievements than we thought," Zetsche told the paper, according to Reuters.

In all, the Daimler and CEO and other company officials met with about 70 companies, including some start-ups, the report says.

"There were concrete talks. I will not say anything about the content. It was not just about the fact that there is an innovative spirit in the Valley. We know that already. We wanted to see what drives it, and all the things that can be created from it," Zetsche told the paper.