There are a lot of ways to decipher what companies and brands are thinking when it comes to looking into the crystal ball and envisioning the future. Oftentimes, research spending provides the clearest clues about what they value and how they see the future.
R&D can be an effective tool in seeing around the corners, especially these days when it’s all moving so quickly. My background is in research, having spent my formative years designing research studies for the Frank N. Magid company back in Marion, Iowa. It was an innovative, free-wheeling environment where we were encouraged to think in new ways about how to better understand the consumer’s relationship with media and entertainment. Today, much of radio’s R&D efforts haven’t changed that much from what we were doing at Magid four decades ago.
But the rest of the world isn’t standing still. And the biggest and best companies are challenged to retain their dominance and grow their positions in a time of great flux. That’s why studying Apple is so fascinating. When you think about their outsized successes with the iPhone this past decade, and the fact that Facebook, Amazon, and now Microsoft have failed in the smartphone sweepstakes, you’d think that mobile would be front and center in their R&D budget. Or perhaps the smart money would suggest Apple might be seeking a better understanding of how their Watch could become the next must-have gadget, especially given the company’s recent stock price downturn.
Morgan Stanley's research team, however, says that Apple has a surprising new priority: automotive.
A recent Bloomberg article by Julie VerHage clearly shows that in the past two years (2013-15), Apple has invested nearly $5 billion (with a B) in automotive research. That tops their spending in all other categories, including the Watch, iPad, and iPhone. And here’s something else to consider – Apple's foray into automotive R&D represents a larger investment than what the 14 top automakers are spending combined.
Morgan Stanley analysts Katy Huberty and Adam Jonas think the bulk of this spending has been earmarked for “shared mobility.” They estimate this market at $2.6 trillion (with a T), and it will only grow. Compared to the smartphone market, this space has the potential to be more than twice that size.
Uber, Lyft, Zipcar, and other “shared mobility” services continue to innovate in bold ways that promise to grow much bigger. We presented a panel on “shared mobility” at our DASH Conference in 2014 which might have been a bit ahead of its time.
Not anymore. Apple’s investment in cars and of course, what cars in the future will have in their dashboards is more than just an interesting topic. Automotive has become a flashpoint issue, especially in the radio industry these past few years.
Their commitment to the development of the Apple CarPlay ecosystem was an early indicator they value automotive in a big way. Now it’s clear their sights are set much higher. For the radio broadcasting industry, there is no clearer sign that automotive conversations, research, and actions aren’t just an option anymore – they’re required. At Jacobs Media via our research and our automotive efforts, along with jācapps and our work on both the Android Auto and Apple CarPlay platforms, we hear this message loud and clear.
We will continue to study and immerse ourselves in the automotive space, and we're gratified to see the NAB, along with others in the radio broadcasting industry, moving rapidly into this territory as well. It's not a moment too soon because today's research will lead to tomorrow's automotive innovations. And radio needs to engage now more than ever.
It could be a wild ride, especially with Apple's desire to be in the driver's seat.
Tomorrow, we’ll talk about what’s happening in the “shared mobility” space, how disruption leads to innovation, and what it might mean for radio's future in the dash.