Along with periodic Above Avalon posts, I send out a daily email about Apple to members (10-12 stories per week). The following story was sent to members on July 21st.
Apple Car Development is Advancing
The Apple Car development project appears to be on track. The WSJ is out with a new report indicating Apple continues to hire auto-related executives and researchers. The latest are Doug Betts, one of the highest auto executives confirmed to now work at Apple, and Paul Furgale, a researcher involved in autonomous vehicles, mapping, and robotics.
Since the Apple Car project remains unconfirmed, the primary evidence we have to judge the project's progression (or lack thereof) is hires and fires that are likely related to Apple's efforts with automobiles.
Here is the WSJ:
"Mr. Betts could be the first major automotive executive to join Apple with experience leveled more at the manufacturing side of the business.
For nearly two decades, he has worked in product quality and manufacturing at an auto company, first as a general manager at Toyota Motor Corp. and later as a vice president at Nissan Motor Co. and Chrysler Group LLC, now FCA US LLC.
In 2009, when Fiat SpA took over Chrysler, CEO Sergio Marchionne tapped Mr. Betts to lead the company's quality turnaround, giving him far-reaching authority over the company's brands and even the final say on key production launches.
Mr. Betts abruptly left Fiat Chrysler last year to pursue other interests. The move came less than a day after the car marker's brands ranked poorly in an influential reliability study."
The WSJ is being pretty kind here in describing Betts' departure. Most industry watchers think Betts was fired this past November due to Fiat, Jeep, Ram, and Dodge taking the bottom four slots on the influential Consumer Reports reliability survey, with the Chrysler brand not far behind.
Obviously, news of Betts being fired due to poor quality performance wouldn't seem to sit right with this latest news from the WSJ that Apple hired him. What is going on?
Industry watchers say Betts was likely used as a scapegoat as the quality problems facing Fiat due to acquiring Chrysler were simply insurmountable and indicative of much bigger company and culture issues, things that one person would not be able to solve on their own. The Daily Kanban, a site dedicated to covering news and analysis from the auto industry, with a focus on Toyota, summed up Chrysler's problems well:
"Chrysler's quality problems seem to be coming from nearly every possible corner. In just a few of the most recent issues to hit the media, FCA [Fiat Chrysler Automobiles] has shown it has problems with everything from a lack of development testing (vibration leading to cracks in Ram Ecodiesel exhaust coupling), to assembly problems (Hellcat fuel leaks). Supplier problems have also featured heavily in FCA's quality snafus, most recently in a recall of Chrysler 200 transmissions due to 'inconsistent assembly procedures at a supplier's plant,' even as [FCA CEO] Marchionne has targeted supplier profits. But perhaps most troubling is the evidence that FCA simply isn't able to catch quality problems before cars go out to customers...
[A] fired executive scapegoat and a snarky [YouTube] ad were deemed a solution to a long-term quality problem. Little wonder Chrysler still finds itself at the bottom of Consumer Reports recommendations."
When you take a step back, Betts' hire at Apple makes much more sense. Betts is a senior level auto executive with stints across a number of companies, including time as head of product quality and supply chain for the Tundra, Sequoia, and Sienna at Toyota in Indiana, where manufacturing techniques are still the envy of the auto industry. This may just be coincidence, but all three of those Toyota vehicles are either SUVs or trucks, and Apple's car project was rumored to include a larger, minivan-type vehicle. Even though he was not able to turn around FCA's fortunes, it is very well possible that Apple sees value in applying his skills and experience to their current project.
One other aspect of Betts that many may not catch is that he has previous experience as Head of Total Customer Satisfaction for Americas at Nissan, which in car lingo means controlling the experience a customer has with a car brand, including everything from how a car is built, to it being bought at a dealer. Betts was overlooking the Nissan experience. Now recall how Apple is all about selling experiences. It sure does seem to fit in my mind.
On his LinkedIn [update: his profile has been deleted], Betts is likely using misdirection, simply saying he is working in Operations at Apple, similar to how former Mercedes R&D head, Johann Jungwirth, lists his job duty at Apple as Director of Mac Systems Engineering.
Betts would seem to be a senior-level hire for the Apple Car group, overseeing an entire team or division within the larger initiative led by Steve Zadesky. It is this type of structure that makes me much more bullish of a full-fledged product under development.
The WSJ has more on Apple apparently hiring Paul Furgale:
"Earlier this year, Apple hired Paul Furgale a well-regarded autonomous vehicle researcher in Switzerland, and has begun recruiting other robotics and machine vision experts to work on a confidential project."
Just to give you a few examples of the type of research Furgale was previously involved in as late as last year, here is a sampling of the publications listing Furgale as a co-author:
- Keyframe-based Visual-Inertial Odometry Using Nonlinear Optimization
- Lighting-Invariant Adaptive Route Following Using Iterative Closest Point Matching
- Infrastructure-Based Calibration of a Multi-Camera Rig
- Self-supervised Calibration for Robotic Systems
Here's more from the WSJ:
"Mr. Furgale had been deputy director of the Autonomous Systems Lab at the Swiss Federal Institute of Technology, or ETH. Mr. Furgale previously had led a European Commission project called V-Charge that sought to develop self-parking vehicle technology...
Mr. Furgale has begun recruiting students and researchers to work with him. Apple has hired a graduate student studying at the University of Michigan and has quietly recruited others."
Two points that I get from this news: 1) Compare Betts to Furgale. While one is a senior-level auto manager, the other is knee-deep in technology and research. Apple is hiring a mix of talent from both the legacy auto industry, as well as academia. 2) I look at the earlier reports back in February saying that Apple wasn't researching autonomous vehicles as a head fake, or misdirection. Evidence suggests they are. Of course, we need to take a few steps to get from Point A to Point B, including semi-autonomous features like better parking and highway travel, but like with any product, I suspect Apple is looking farther in the future, at a world where autonomous vehicles are much more likely to control the road.
Betts and Furgale are both interesting auto-related hires that further strengthen the theory that Apple's ambitions in the automobile industry have no bounds.
Along with the preceding story, the full list of stories sent to Above Avalon members last week included:
- Apple Earnings Summary - Big Picture, Stock Price Reaction, iPhone: Relatively Quiet (Which is Good), Apple Watch: It's Very Early and Things Look Okay, iPad Sales Growth: Fact vs. Theory, Share Buyback: It's Slowing, Additional Earnings Call Notes
- The Day After Apple Earnings on Wall Street
- The Wild Ride on Wall Street
- Judging Apple Watch Success/Failure
- Beme and the iPhone Ecosystem
- Apple Music - A Few Thoughts Three Weeks In
- Washington Looking at Foreign Cash Tax Reform
- Thursday Q&A
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