Software is eating the world – its next snack is Ferrari
Apple has taken a seat in Ferrari’s boardroom in a deal that helps both companies.
Eddy Cue, the tech titan’s vice president of internet software and services, was named to Ferrari’s board of directors on the same day the Italian automaker announced record-setting sales for the first nine months of the year.
“I am pleased and proud to become a member of the board,” Cue, who has driven a Ferrari for the past five years, said in a statement. “I continue to be awed by the world-class design and engineering that only Ferrari can do.”
Apple has long been rumored to be interested in the automotive sector, and has in recent months announced partnerships with nine automakers to bring a new breed of advanced voice control, dubbed Siri Eyes Free, to vehicles in the next year. As for Ferrari, well, its cars are technological marvels under the hood, but their infotainment systems suck. Apple could help change that in a big way.
Ferrari might have telegraphed such a move when company CEO Luca di Montezemolo met with Apple CEO Tim Cook in April and praised the Cupertino company’s focus on “simplicity, design and a passion for product.” He continued singing the company’s praises as he announced Cue’s appointment Wednesday.
“I am delighted that Eddy Cue, one of the main driving forces behind Apple’s range of revolutionary products, has now joined our board,” he said in a statement. “His huge experience in the dynamic, innovative world of the Internet will be of great assistance to us.”
Cue’s role at Apple has grown substantially during his 24 years in Cupertino. He’s been instrumental in landing deals with record companies, movie studios and mobile carriers, along with creating the iLife suite of productivity products, fleshing out the iBooks deal, and overseeing the App Store and iCloud divisions. And after Apple’s recent management shakeup, Cue is now in charge of iOS Maps and Siri.
That may be exactly why Ferrari gave him a seat in Maranello. Automakers are lining up behind tech companies like Microsoft and Cisco in a scramble to bring connectivity to cars. Apple is working with General Motors, Honda, Toyota and others to bring Siri to your dashboard, but is in many ways playing catchup to the likes of Microsoft, which together with Ford kicked off the modern connectivity craze with the introduction of Sync in 2006.
“It’s going to be good for both companies,” says Thilo Koslowski, an automotive and mobility analyst at Gartner. “But not just for Ferrari, but for Apple, who needs to know how the automotive industry works.”
There are more synergies between Ferrari and Apple than you might expect. Yes, Ferrari is an incredibly exclusive brand, while Apple represents a democratization of technology. Ferraris are a dream, targeted at the world’s elite with money to burn, while Apple products, though expensive, are attainable. But both companies are highly centralized and exact uncompromising control over their products. Both are obsessed with design, performance and the smallest detail. And both put a premium on customer experience – through sales, service, and retention – which contributes to a level of consumer fanaticism envied by competitors.
The ramifications of Cue’s appointment could reach far beyond the Cavallino Rampante. Ferrari is owned by FIAT S.p.A., which controls Alfa-Romeo, Maserati and now Chrysler, which helps sell the Fiat 500 in the United States. We’ve already seen the two companies collaborate on projects like the new Dodge Dart, so it isn’t a stretch to see an Apple-Ferrari partnership trickling down to lesser marques.
Apple is generally cagey about allowing its executives to serve on the boards of other companies, but considering the shared values of the two brands and the knowledge they can impart to one another, it’s a smart move. Most consumer electronics companies lack experience building products that meet the long-term standards of the automotive industry, specifically reliability and functionality that extends over the course of several years. But that’s because CE companies are playing a completely different game.
“The car is it’s own separate environment and requires its own separate approach,” says Charles Golvin, principle analyst for Forrester Research.
Luxury automakers like Bentley, Maserati and Ferrari haven’t invested the same level of time, energy and resources into in-car connectivity that companies like Ford or Audi have. For all the tire-shredding technology powering the Ferrari 458 Italia or FF, they’ve largely fallen short when it comes to things as basic as music integration and user experience.
“Ferrari has not done a great job of software support and user interface design,” Golvin says. “Ferrari has a rich and storied design and technology history, but it’s not just about Apple getting its nose under the tent of a leading automotive manufacturer – it’s Ferrari getting a skilled software company onto its board.”
That doesn’t mean that the Apple ethos is going to embed its way into future Ferrari products. “This isn’t Apple taking over the dashboard of Ferraris,” Koslowski makes clear. But having Cue aboard could could influence how Ferrari looks at the human machine interface and what steps it can take to bring its connectivity platform up to par with its exceptional drivetrains and chassis.
“The future of the [auto] industry isn’t just performance,” says Golvin, “but a rich software and user interface environment.”
Which is exactly what Apple provides.