Will the future of the smart car industry be more like the Apple model or the Android ecosystem? Obviously the latter!

He Xiaopeng, chairman of Xpeng Motors, said: "In the future, smart car companies will be more like an Apple-style ecosystem, with manufacturing (including hardware and basic software) as the foundation and operations (including user operations, open ecosystem operations and commercial operations) as the core."

I do not agree with He Xiaopeng's view. I believe that the future smart car industry will be more like the Android ecosystem; hardware manufacturing is still the core of the automotive industry.

1. What is the Apple model?

Apple's current core product is the iPhone. Apple's mobile phones are mainly in the mid-to-high-end market and are expensive. Apple has led the development of smartphones with its outstanding product innovation capabilities. In the high-end mobile phone market, Apple's market share exceeds 40%, and it is in a monopoly position.

Apple's sales volume is very impressive, which allows Apple to be very strong when facing suppliers.

Apple asked suppliers to reduce orders for other customers and only provide products for Apple as much as possible. Apple also concentrated some suppliers near Apple factories and distributed orders according to demand through a monitoring sales system. These measures not only reduced inventory costs, but also improved production efficiency, which helped speed up the launch of new products.

Apple not only utilizes the production capacity and manpower of suppliers, but also integrates the technology and innovation capabilities of suppliers. In this way, Apple can apply the latest technology to its own products as much as possible. Apple's product innovation ability is not only due to Jobs's genius creativity, but also inseparable from a strict and efficient supply chain system.

Apple developed iOS and Mac OS, and only allows applications to be used on its own hardware. On its own operating system, Apple launched the App Store platform and opened it to application developers. Apple takes a fixed 30% of the revenue earned by developers through the app store.

Most of the users of Apple mobile phones are high-net-worth individuals with strong paying ability. In addition, Apple has huge sales and a large fan base. This provides a good profit platform for the application developers of the App Store. The more profit the developers make, the more profit Apple will make. The success of the App Store is based on the monopoly of Apple mobile phones in the high-end market.

The App Store, in turn, increases the stickiness of Apple users, attracts more consumers into the Apple ecosystem, and increases the premium of Apple hardware products.

From product innovation to strict supply chain management, to independent operating systems and the App Store and iTunes platforms built on this basis, Apple has built a complete and closed business ecosystem from hardware to software. For every link in the ecosystem, Apple is the rule maker and has the dominant power. This is the Apple model.

2. How was the Android ecosystem formed?

The Android mobile phone operating system did not have perfect performance when it was first launched, but it has been welcomed by application developers and mobile phone manufacturers due to its openness and low barriers to entry.

The decline of Symbian and the rise of Android form a sharp contrast.

The Symbian system is not very friendly to application developers. Not only is it difficult to develop on the technical level, but there are also many models of Symbian system, which requires application developers to adapt to different models, which greatly increases the cost of application development. This greatly limits the development of the application ecosystem of the Symbian system. Without rich applications and unmet user needs, it is natural that the Symbian system is abandoned by the market.

Android is open source and free for mobile phone manufacturers and application developers. The low threshold of Android is welcomed by mobile phone manufacturers and application developers. This forms a virtuous circle. The more mobile phone manufacturers use Android, the more mobile application developers are willing to develop applications for Android. The richer the Android applications, the more mobile phone manufacturers cannot do without the Android system.

Google, the owner of Android, provides the Android system for free and bundles its own applications to earn advertising fees. This is the Android ecosystem.

It can be said that iOS and Android have buried the Symbian system together. The common reason for the success of iOS and Android is that they have created a self-growing mobile application ecosystem. Both are very open in terms of application development. After all, if a smartphone does not have a rich mobile application, it is no different from Nokia.

The difference between Android and iOS is that Android is also open in terms of hardware, while iOS is only used for Apple's hardware. In terms of market share, Android phones far exceed Apple's. However, in terms of profitability, Android is far behind iOS, which is related to Apple's monopoly position in high-end mobile phones.

3. What does the era of smart cars mean?

We often discuss the four new trends of the automotive industry: electrification, intelligence, networking, and sharing. Among these four trends, intelligence is the core.

Autonomous driving can free people from driving. In this way, people can do other things in the car, such as rest, entertainment, shopping, office work, etc. These activities of people in the car will generate many business opportunities.

The functions that can be realized in the current smart cockpit are relatively simple, such as voice interaction, face unlocking, etc. With the development of artificial intelligence, the functions of the smart cockpit will become more and more abundant. After the realization of autonomous driving (L4, L5), the activities that people can perform in the car will become very rich, and these activities will broaden the scope of development of the smart cockpit.

Autonomous driving is a big business at the platform level, but it has stronger 2B attributes. Autonomous driving can be simply understood as an automated module for cars, which is more closely related to the automotive manufacturing supply chain.

The smart cockpit is directly oriented to users, and the consumer ecology and user operations derived from smart cars are mostly closely related to this part. The car we are talking about will become a new smart platform after PCs and mobile phones, which is also mainly related to the smart cockpit.

The development of smart cockpits is similar to the development of mobile phone applications, which requires an operating system as support. Whether the smart car ecosystem we are discussing is more like the Apple model or more similar to the Android ecosystem needs to be discussed from the perspective of the operating system and the smart cockpit.

The in-vehicle operating system must not only meet the unique needs within the car, but also meet automotive-grade standards and the safety needs of the car. Simply projecting smartphones onto cars is not a long-term solution.

Smart cars are far more complex than mobile phones, with more sensors and more complex systems. As a bridge between smart applications and hardware, the in-vehicle operating system needs to undertake more complex tasks. It can be said that the research and development of operating systems on smart car platforms is very difficult.

4. Why is the automotive industry not suitable for the Apple model?

Apple has a monopoly in the high-end mobile phone market, with a market share of over 40%.

It is difficult for Apple to have a monopoly in the luxury car market. However, the monopoly of the high-end market is the foundation of the Apple model.

The success of the Apple model is accompanied by strict control over the entire supply chain. However, Apple's supply chain model is difficult to replicate in the automotive industry.

The automotive supply chain is a hierarchical supplier management model. No matter how big the OEM is, it is highly dependent on first-tier suppliers. First-tier suppliers not only have strong technical strength, but also strong management capabilities. In fact, many core technologies are no longer controlled by OEMs, and auto giants no longer have the ability to independently design and manufacture a car. Intelligent networking will make the automotive supply chain system more complicated.

Apple requires suppliers to be highly transparent to it. In Apple's view, all components must be white boxes to Apple. Apple must understand the R&D, production and testing of each component. This high degree of transparency is crucial for Apple to reduce inventory, costs, increase delivery speed and carry out product innovation.

Car companies can develop their own in-vehicle operating systems. Many car companies now have their own operating systems. However, this operating system is actually an in-vehicle entertainment system with very limited functions and cannot meet the needs of the future development of smart cars.

Even if car companies develop an operating system that can support smart cars, it is likely that they can only be used in their own brands (car companies will not want their cars to be equipped with operating systems from other companies). Without Apple's monopoly, they will face the problem of limited hardware platforms, and subsequent Apple-style application ecosystem construction will be difficult to sustain.

If a third party (not a car manufacturer, not a car company) launches an operating system suitable for the smart car platform, it will pose a threat to the operating system developed by the car company itself. We already know that the development of in-vehicle operating systems is difficult, so not every car company has the ability and willingness to develop their own operating systems. This gives third-party operating systems an opportunity.

If third-party operating systems are open to car companies and application developers for free like Android, the resulting application ecosystem advantages will deal a heavy blow to car companies' self-developed operating systems. At this time, car companies will face the Symbian-style application ecosystem problem.

5. Intelligent cars in the post-Internet era

PCs and smartphones developed along with the Internet economy, while smart cars are facing a mature Internet economy and a handful of Internet giants.

In the automotive industry revolution brought about by smart cars, most Internet giants are closely planning, but most of them have stated that they will not build cars. Autonomous driving and smart cockpits have become the focus of competition among Internet giants. In fact, Google, Apple, Alibaba, etc. have already begun to develop third-party in-vehicle operating systems.

In this industrial transformation of smart cars, car companies and Internet giants have their own advantages.

Google and Alibaba both have a foundation in third-party operating system development, have advantages in funding and talent, and have a more comprehensive layout in the entire automotive ecosystem. For example, Google is a global leader in autonomous driving, and Alibaba has layouts in high-precision maps, high-precision positioning, operating systems, and autonomous driving.

Car companies have advantages in car manufacturing and supply chain management, but Google and Alibaba have said they will not build cars. Compared with Internet giants, car companies are far behind in terms of size and profit margin, and they cannot match Internet giants in terms of funds.

If there is not enough money, there will be not enough talent. Tesla has been complaining about Apple's poaching. In fact, Apple is not only poaching Tesla, but also poaching traditional car companies such as Ford and General Motors.

In the field of autonomous driving, traditional auto giants are not far behind. Google's autonomous driving is the world leader, but GM, Toyota and other automakers are unwilling to lag behind. However, Google is working on its own, while traditional automakers are working together to develop together.

China's automakers are weaker, and the gap between them and Internet giants is even greater. Whether it is autonomous driving or in-vehicle operating systems, the strong involvement of Internet giants is inevitable.

Internet giants have more obvious advantages in vehicle-mounted operating systems. Research foundation, funding, talent, third-party developer status, application ecosystem construction, and a relatively light model without making cars are all advantages of Internet giants. In the future, it is highly likely that Internet giants will provide third-party vehicle-mounted operating systems.

6. The Apple of the Automotive Industry

The fact that the future smart car ecosystem will not be dominated by the Apple model does not mean that there is no possibility of the emergence of companies similar to Apple in the automotive industry.

The company that is most like Apple in the automotive industry is Tesla. Tesla has led the development of electric vehicles, is a benchmark in the electric vehicle industry, and has always been a model for emerging car companies to imitate.

Tesla has developed its own in-vehicle operating system that can support smart car functions, and its smart car functions have also been welcomed by the market.

Tesla has demonstrated its advantages over traditional automakers in integrating its supply chain, the most famous of which is purchasing Panasonic batteries at low prices.

The most similar point for Tesla to Apple is its performance in the luxury car market. Tesla sold 54,640 Model 3s in the third quarter, almost all to American customers, ranking first in the U.S. luxury car market. The second-place Audi Q5 only sold 21,000 units.

In the third quarter of this year, Tesla's sales in the United States were close to those of the three traditional luxury car brands, Lexus, BMW and Mercedes-Benz, and have surpassed brands such as Audi and Acura.

However, Tesla still has a long way to go before it can monopolize the high-end market like Apple.

Moreover, Tesla still has a disadvantage in terms of size compared to Internet giants. Tesla is really short of money, and a large number of executives have been poached by Apple, which puts Tesla at a disadvantage in terms of talent.

There has been speculation that Apple has not completely given up on making its own cars.

Apple's SPG division has gathered a large number of executives related to car manufacturing. According to foreign media reports, Apple recently rented a warehouse with an area of ​​about 29,000 square meters in Silicon Valley. Considering the size of the warehouse and its single-story layout, this space is likely related to Apple's car manufacturing business.

Apple can make up for the lack of experience by spending money. Poaching a large number of talents from traditional car companies is expected to make up for the lack of experience.

The biggest challenge facing Apple in making cars is integrating the automotive supply chain. If Apple really wants to make cars, it will have to compromise with first-tier suppliers. Moreover, the car manufacturing business is the lifeblood of auto giants, and Apple's car manufacturing will inevitably face strong resistance. Considering the close relationship between auto giants and suppliers, it will not be easy for Apple to make cars.

(VII) Operations are not the moat for new car-making forces

Most car companies, including new car manufacturers, do not have the strength to implement the Apple model. Therefore, operating a smart car application platform similar to Apple's AppStore has become a castle in the air.

There is still a large gap between new car manufacturers and traditional car companies in terms of manufacturing capabilities, so they need to emphasize operations to highlight their advantages over traditional car companies.

The development of automotive intelligence will be accompanied by the penetration of the Internet economy into the automotive industry, but the previous Internet economy models were relatively light.

He Xiaopeng lamented that he used to think that 10 billion was too much when he saw others making cars, but when he jumped in, he realized that 20 billion was not enough. The automobile industry not only requires a high capital scale, but the entire industrial chain is also very complex. We cannot simply use the past experience of the development of the Internet economy to look at the intelligence of automobiles.

The emphasis on operation and service by new car manufacturers is a progress, which is also a good change brought by the Internet economy to the automobile industry. However, the current efforts of new car manufacturers in operation and service cannot form a competitive barrier against car companies.

New car manufacturers regard online car sales and self-built sales channels as an operational innovation. In fact, few dealers are willing to cooperate with new car manufacturers whose future is uncertain, so they have to build their own channels. Tesla also faced similar problems at the beginning.

The experience store model has brought a breath of fresh air to car sales, but traditional car companies are also beginning to build experience stores.

Experience stores concentrated in first- and second-tier cities cannot cover all sales and after-sales service needs. As the scale of automobile sales expands, the cost of building channels for new car manufacturers will be very high, and the coverage will be difficult to match the cooperation model between traditional car manufacturers and dealers. New car manufacturers will ultimately rely on dealers for sales and after-sales service.

Weilai has put a lot of thought into innovating after-sales services, but SAIC has already begun to imitate this model. The innovations of new car manufacturers in sales and after-sales services are unlikely to become a new moat.

Intelligent networking makes the structure of cars more complex and expands the definition of car manufacturing. Car manufacturing no longer includes only hardware, but also software. The difficulty of car manufacturing will be further increased, which will also become the core of competition among car companies.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.