Apple Drive.ai purchase a reminder of “market shock” facing carmakers

By Lucy Ingham

The Apple Drive.ai purchase earlier this week is a stark warning to carmakers of the disruption they are facing over the next few years, according to data analysis firm GlobalData.

The purchase, which was announced on Tuesday, saw self-driving car startup Drive.ai taken over by Apple for an undisclosed sum.

The startup, which was once valued at $200m, had been struggling over the last few months, and was set to close completely and lay off all 90 of its staff prior to the acquisition by Apple.

For the tech giant, the acquisition brings key self-driving car expertise into the company, giving it a stronger base to compete in the emerging self-driving car industry.

“Although how much Apple is paying for Drive.ai is undisclosed, what is clear is the extent to which Apple will benefit talent-wise from the deal,” said GlobalData of the Apple Drive.ai purchase.

“The deal is the latest example of a so-called ‘acqui-hire’, in which larger technology companies buy small start-ups to gain key talent.”

Apple Drive.ai deal a warning to major carmakers

Apple is just one of a host of technology companies establishing a strong base in the driverless car industry.

Leading the way is Google owner Alphabet, with its brand Waymo, while Uber has also made considerable efforts in the driverless car space.

However, while some traditional carmakers, including General Motors and Mercedes – as well as electric disruptor Tesla – have been making moves in the self-driving space, many established companies are being perceived to be sleeping at the wheel on the topic.

GlobalData argues that this will see many companies face “market shock” as driverless vehicles become widespread over the next few years.

“The global automotive sector faces four concurrent threats: the connected car, autonomous vehicles, electric vehicles and transport as a service, which the established players are scrambling to turn into an opportunity,” said Cyrus Mewawalla, head of thematic research at GlobalData.

“However, developments are well outside of their traditional comfort zone and provides for industry outsiders, like Apple, the ideal opportunity to suck the lion’s share of future profits from a $3.5tn industry as evidenced by the Drive.ai deal.”


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