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Sunday, January 23, 2022 | 02:22 pm
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Big Tech Wants Drivers’ Eyes on Screens Instead of on the Road

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Big Tech Wants Drivers’ Eyes on Screens Instead of on the Road

AT FIRST glance, the forays Apple, Google, and other technology giants are making into the world of cars don’t appear to be very lucrative. The world’s top 10 carmakers had an operating margin of just 5.2 percent in 2020, a fraction of the 34 percent enjoyed by the tech industry’s leaders, Bloomberg data show.

But for Apple and other behemoths that are diving into self-driving tech or have grand plans for their own cars, that push isn’t just about breaking into a new market – it’s about defending valuable turf.

A market projected to top US$2 trillion by 2030 is hard to ignore. By then, more than 58 million vehicles globally are expected to be driving themselves. And Big Tech has the means – from artificial intelligence and massive data to chipmaking and engineering – to disrupt this century-old industry.

What’s at stake, essentially, is something even more valuable than profitability: the last unclaimed corner of consumers’ attention during their waking hours. The amount of time people spend in cars, especially in the US, is significant. Americans were behind the wheel for 307.8 hours in 2016, or around six hours a week, according to data from the American Automobile Association. That’s a fair chunk of someone’s life. Any company that’s able to free up that time in a meaningful way will also have a good chance of capturing it.

The world’s inexorable shift towards intelligent cars that are better for the environment is impossible to miss. If governments haven’t already declared plans to be carbon neutral by, in some cases, the end of this decade, there’s plenty of research that shows combustion-engine cars are going the way of the dinosaurs.

BloombergNEF’s annual Electric Vehicle Outlook, published earlier this month, sees global oil demand from all road transport peaking in just six years, assuming no new policy measures are introduced. By 2025, EVs will hit 16 percent of global passenger vehicle sales, rising to 33 percent in 2030 and 68 percent in 2040. Eventually, autonomous vehicles will reshape automotive and freight markets entirely.

Against that backdrop, it’s unsurprising that after years of chipping away at self-driving cars, tech companies have been stepping up their activities and investments in earnest.

Autonomous cars are only as good as the human drivers they learn from – so those who teach these systems must be excellent drivers themselves.

Over the past several months, Apple has prioritized plans for the “Apple Car” after previously focusing on making an autonomous driving system, Bloomberg has reported.

There’s also Waymo, which is in talks to raise as much as US$4 billion to accelerate its efforts. Founded in 2009, the business that was formerly Google’s self-driving car project was the first to have a fully autonomous ride on public roads. It became an independent company in 2017 under Google parent Alphabet, launched an autonomous ride-hailing service in Phoenix in 2018 and last year began testing self-driving trucks in New Mexico and Texas. Microsoft Corp, too, is backing several autonomous initiatives, partnering with Volkswagen on self-driving car software.

Amazon.com, meanwhile, has thrown its weight behind Rivian Automotive, which is making electric trucks, and last year bought driverless startup Zoox.

“Each of these companies, including Facebook, want to be a part of or even control and dominate, every part of citizens’ lives,” said Raj Rajkumar, who leads the robotics institute at Carnegie Mellon University. “From their business point of view, if you don’t, somebody else can and probably will, and eventually your current domain of influence fades away.”

The onslaught has automotive incumbents girding for battle. Industry titans such as Ford Motor, General Motors, and Toyota Motor have stepped up their own rival efforts in self-driving. In China, the biggest tech companies throwing their hats in the ring. Giants from Huawei Technologies to Baidu have pledged to plow almost US$19 billion into electric and self-driving vehicle ventures this year alone. Smartphone giant Xiaomi and even Apple’s Taiwanese manufacturing partner Foxconn have joined the fray.

The existing businesses of Amazon, Apple, and Google already require them to become proficient at AI, handling massive amounts of data and designing complex systems. Essentially, they’ve made the upfront investment in core technologies needed to design and build driverless cars, and they now have legions of eager engineers.

But perhaps one of the clearest examples of a tech company with the ability to change up its own stomping ground is Amazon. The Web retailer would benefit hugely from the lower costs of delivering packages to homes using cars that drive themselves.

While the coronavirus pandemic put a temporary damper on consumers’ appetite for new cars, demand has roared back. This year alone, the global automotive market is projected to rebound by 9.7 percent to US$2.7 trillion, according to IBIS World.

“Even for companies like Apple and Google, this is a massive market,” Prof Rajkumar said. “CFOs and CEOs literally drool, since first movers are likely to have a major edge. Each of these companies wants to be the predator, and not become the prey”.

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