Mon, Aug 03, 2015 page14

• Apple, BMW flirt with electronic car team up

  • Reuters, FRANKFURT and SAN FRANCISCO
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  BMW and Apple might rekindle a courtship put on hold after an exploratory visit by executives of the world’s top maker of electronic gadgets to the headquarters of the word’s biggest seller of premium cars.

  Apple chief executive officer Tim Cook went to BMW’s headquarters last year and senior Apple executives toured the carmaker’s Leipzig factory to learn how it manufactures the i3 electric car, two sources familiar with the talks said.

  The dialogue ended without conclusion because Apple appears to want to explore developing a passenger car on its own, one of the sources said.

  Also, BMW is being cautious about sharing its manufacturing know-how because it wants to avoid becoming a mere supplier to a software or Internet giant.

  During the visit, Apple executives asked BMW board members detailed questions about tooling and production and BMW executives signaled readiness to license parts, one of the sources said. News of the Leipzig visit first emerged in Germany’s Manager-Magazin last week.

  “Apple executives were impressed with the fact that we abandoned traditional approaches to car making and started afresh. It chimed with the way they do things too,” a senior BMW source said.

  The carmaker says there are currently no talks with Apple about jointly developing a passenger car and Apple declined to comment. However, one of the sources said exploratory talks between senior managers may be revived at a later stage.

  It is too early to say whether this is set to be a replay of Silicon Valley’s Prometheus moment: The day in 1979 when Apple cofounder Steve Jobs visited Xerox’s Palo Alto Research Center where the first mouse-driven graphical user interface and bit-mapped graphics were created, and walked out with crucial ideas to launch the Macintosh computer five years later.

  BMW has realized next-generation vehicles cannot be built without more input from telecom and software experts, and Apple has been studying how to make a self-driving electric car as it seeks new market opportunities beyond phones.

  Since the visit, there has been a reshuffle at the top of BMW, with BMW chief executive officer Harald Krueger — who was appointed in May — in favor of establishing his own team and implementing his plans for BMW by the end of the year, a person familiar with his thinking told Reuters.

  A further complication was the departure of BMW’s board member for development Herbert Diess, who played a leading role in initial discussions with Apple. He is a now a member of the board at Volkswagen AG.

  Diess, who declined offers to comment, oversaw the development of BMW’s “i” vehicles which are built using light weight carbon fiber, using a radical approach to design and manufacturing.

  Car technology has become a prime area of interest for Silicon Valley companies ranging from Google Inc, which has built a prototype self-driving car, to electric car-maker Tesla Motors Inc.

  Diess has said the German auto industry needs to undergo radical change because consumers are demanding more intelligent cars and anti-pollution rules mean the next generation vehicles will increasingly be low emission electric and hybrid variants.

  In 2030, only two generations of new cars away in auto manufacturing time scales, only a third of vehicles are set to be powered by a conventional combustion engine alone, experts predict.

  “It means that in two cycles we will shut down two thirds of our engine manufacturing,” Diess told a panel discussion in July last year, adding that the value chain for new electric cars is already shifting, with vehicle batteries made mainly in Asia.

  “The second part is that the car will become intelligent, part of the Internet,” Diess said. “The strong players in this area are in the US, in the software development area. We will surely need to find alliances in this field.”

  Germany has two years to prove that it can hold its own against new entrants when it comes to shaping the future of luxury vehicles, Diess said.

  Carmakers including BMW have already developed next generation self-driving cars, vehicles which need permanent software updates in the form of high-definition maps allowing a car to recalculate a route if it learns about an accident ahead.

  The technology is moving ahead faster than the legal and regulatory rules which would allow large-scale commercial availability.

  Earlier this year, BMW research and development chief Klaus Froehlich said his company and Apple had much in common, including a focus on premium branding, an emphasis on evolving products and a sense of aesthetically pleasing design.

  Asked, in general terms, whether a deeper collaboration beyond integration of products like the iPhone would make sense, Froehlich initially said BMW would not consider any deal that forces it to open up its core know-how to outsiders.

  “We do not collaborate to open our ecosystems but we find ways, because we respect each other,” Froehlich said.

  BMW would keep in mind the needs of the customer, and what the company’s core strengths are, when it considers the merits of entering any strategic collaboration, Froehlich added.
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