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Apple is moving toward acquiring self-driving vehicle startup Drive.ai, according to two individuals with knowledge of the negotiations, cited by The Information. The deal, which has been described as an “acqui-hire,” would give Apple access to Drive.ai’s workforce — and most importantly, its engineers, of which there were an estimated 100 as of February.
Here’s what it means: Despite setbacks, Apple is still fully committed to building up a presence in the autonomous driving space.
- Apple’s autonomous technology has lagged its competitors in the space. Apple’s autonomous vehicles (AVs) logged nearly 80,000 test miles in California in the year ended November 30, 2018 — which was the third highest of any company — but its cars disengaged and required a human operator to intervene once every 1.15 miles on average. For comparison, Waymo’s cars disengaged only once every 11,017 miles on average. These technical struggles were highly publicized in the California Department of Motor Vehicles’ annual report on AV testing in the state. And in early 2019, Apple reassigned 200 employees working on Project Titan, the company’s autonomous tech initiative, suggesting the company could have been shifting its focus elsewhere.
- However, the potential Drive.ai acquisition coupled with other recent developments indicates that the company is undeterred by these obstacles. Reports released in April claimed that Apple was holding talks with multiple suppliers of next-generation LiDAR sensors for use in its AVs, while simultaneously continuing to develop proprietary versions of the tech. These major developments coming to light within the span of two months suggest that Apple isn’t just staying committed to its AV plans, but accelerating them.
The bigger picture: The numerous avenues for generating revenue in the AV market present a significant opportunity for tech companies — one that’s too valuable for Apple to pass up.
Tech giants are uniquely positioned to capitalize on a variety of aspects of AV development and operations, including licensing software, selling hardware, providing self-driving services, or even launching new in-car experiences. For example, Apple and Google are responsible for two of the most-adopted operating systems in the world, which they can use to build out in-car experiences for AVs.
They are also well-known for developing some of the most popular hardware and services used today, experience they can bring to their AV ventures. By applying this expertise to self-driving tech, they can tap into the huge global market for AVs, which is expected to grow at a compound annual growth rate of 39%, from $54 billion in 2019 to $557 billion by 2026, according to Allied Market Research.
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Apple may “acqui-hire” AV tech startup Drive.ai (AAPL)