How Apple Car could become the future car as a service

How Apple Car could become the future car as a service

Apple services are a source of revenue that fuels the company's future. It's obvious that Apple intends to build on the services it already provides, and the company that gave us the iPod clearly understands that today's digital consumers demand access rather than ownership. They are all in the subscription tango in Cupertino.

State-of-the-art vehicles for a monthly fee

That's why I think subscriptions will be a key part of the company's strategy for Apple Car. Regardless of the speculation surrounding this project, we know that Apple has thousands of people working on it, and I doubt they'll get paid to lose the weather. The results of this effort may not be what we hope for, but they certainly are.

What do I mean by car subscription?

Watch Apple Music; subscribers have access to 100 million tracks on their Apple devices, and the company that orchestrated the journey from ownership to access on an iPod can do something similar with cars.

Car subscription is a bit like car leasing and a bit like car sharing. For a regular monthly fee, you can use the car of your choice.

What is it?

Unlike a lease, you are not bound by a (usually) three-year contract, and unlike a rental or carpool, you own the car you drive (within stated mileage limits). At the end of the car subscription, you return it, recycle or renew it, and take another vehicle, or switch to car sharing if your mobility needs have changed.

Existing car subscription programs typically offer extra benefits like maintenance to subscribers, and you can upgrade to a new car whenever you want. Boston Consulting estimates that car subscriptions in Europe and the United States could reach €40 billion by 2030, representing up to 15% of new car sales. And just as Kyte currently lets you subscribe to a Tesla for around €1,000 a month, Apple could offer you an Apple Car.

Imagine what happens if only 1% of your 1,000 billion customers sign up. Ten million people earning €XNUMX a month is big business. They might even offer a free Apple One subscription in every vehicle.

Apple will also sell you a vehicle, which I doubt will be cheap. And I think it's very likely that it will support car sharing programs, either through its own service, an existing service, or in conjunction with at least some of the many such programs now owned by major automakers. .

Existing automakers are certainly exploring auto subscription.

Automakers see the writing on the wall

Volkswagen recently acquired Europcar Rentals and intends to make autonomous vehicles available through this service after 2025. Christian Dahlheim, CEO of Volkswagen Financial Services, explained: “We expect that most people will continue to prefer individual mobility for 2030, but it will be more about the use and less about the ownership of the vehicles.

Now, we don't know if Apple will work with automakers and we don't know if it will show its own vehicle, although we all think so. Still, to meet the needs of a changing mobility infrastructure, it makes sense that if you want to get from A to B, you can do it in an Apple Car. You can own it, rent it, or subscribe to it.

Apple may not even need to make the car. It could license automakers all the cutting-edge new technology it was working on, bolstering the deal with access to CarPlay and spreading the revenue share around in-car content delivery and acquisition.

BMW has backed away from its decision to charge motorists a subscription to use CarPlay in their vehicles, but don't dismiss the importance of automakers' attempts to sell in-car upgrades as additional price options in the same way that They sell moldings for vehicles.

Subscription services will be extended to software unlocks for existing hardware features. Capgemini estimates that more than 20% of automotive industry revenue will come from software by 2030.

satellite party

That said, I have never seen Apple as an additional option, nor do I think the company sees itself that way. Which makes it much more likely that you will want your own brand on your own vehicle. (It's nice to think that these vehicles will probably have an international satellite emergency calling system to find help if they get lost in the desert or after an accident in a remote location. No wonder Elon's Space X tried to ruin the Apple's Global Star Party).

At the same time, all automakers now realize that they simply can't replace every vehicle on the road. Climate change targets and raw material scarcity mean mass replacement on an individual basis simply won't happen. The shift to electronic vehicles is one that will eventually be characterized by scarcity, and in this model, access rather than ownership makes sense.

This is where most people post the statistic that the cars we already use are parked 95% of the time, implying that we really only need to replace 5% of used vehicles to achieve the same level of mobility. . (And maybe we can embrace remote work and staggered work hours.)

Do consumers trust electric vehicles?

As for the acceptance of electric vehicles (EV), we are not there yet. And we all know the problem with charging stations in some economies: either there aren't enough of them, or the inherent power distribution infrastructure isn't yet equipped to support too many. Car subscription services allow consumers to try electric vehicles for a period of time. Anecdotally, consumers who try an electric vehicle don't seem to go back to fossil fuel vehicles, according to MyCarDirect. Apple employees read the same stats I do, and probably have access to a ton of additional data, like where people go, how they drive, and when they want to drive. Apple's mobility data was very revealing in the information it shared.

Apple's commitment to protecting the environment, which seems to go beyond simple greenwashing, also has a part to play. We know that the company is looking to build a closed-loop manufacturing system for its products. A key part of doing this is ensuring that old systems are returned to the manufacturer, which is an integral part of an automotive underwriting program.

Access to vehicles designed from the ground up to be as recyclable as possible, to run on renewable energy and available as a service certainly sounds like the kind of offering that will appeal to our highly conscious and highly motivated consumers.

I think Apple also thinks the same. It's a plan that allows you to reach new consumers, do what's right for the planet, and earn billions of dollars doing it. This is very much like the Apple style. And what's even better is that we have at least three years to speculate on this.

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