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A Better Partnership

Ahead of the Curve Auto Supplier Blog

April 27, 2016

Is Silicon Valley Moving to Detroit?

Michael G. Brady
Thomas J. Manganello

Speculation continues about Google, Apple or one of the other Silicon Valley behemoths getting into the car business and manufacturing cars of their own.

A recent article in Time Magazine (Time) casts doubt on that idea, at least for Apple. “Apple will stick to its area of expertise, software design and influence the auto industry not by building some utopian ideal of the car, but by partnering with established automakers who do all the heavy lifting in terms of actually building and selling the cars.”

Time suggests that Apple will do what it does best, “learn everything it can about the product (cars) and industry, then improve the design to such an extent that the Apple version is seen as a generational leap.  Then they’ll market the hell out of it.”  In this regard, Apple’s role in the automotive space will likely resemble that of a design consultant rather than a manufacturer.

Makes sense to us. Why would cash-rich Apple even want to invest in the infrastructure to support manufacturing, service and sales and then deal with the incredibly complex regulations and legislation that come with the automobile business? Why not just make billions on licensing software, an area where they already have more in-house knowledge than anyone else?

Detroit should focus on what Detroit does best, too. Designing and building continually improved vehicles and let the Apples of the world work their magic on the navigational and infotainment systems. Automakers and their suppliers need to follow Apple’s developments and be in negotiation with Silicon Valley companies to incorporate new technologies into their vehicles, because consumers have proven over and again that they want what the Valley has to offer.  

For example, GM recently announced the acquisition of San Francisco-based startup Cruise Automation. Cruise Automation specializes in software for autonomous vehicles, which may one day be integrated into new model cars and trucks. GM already offers Apple ‘CarPlay’ in many 2016 models which includes software that integrates iOS devices into the dashboard touch screen.

Warner Norcross is closely following Silicon Valley companies to get a handle on their activities and working to get our own oars in the water early. We’re eager to work with Silicon Valley and with automotive suppliers who are still in the early stages of what promise to be deep and mutually beneficial relationships.  

At Warner Norcross, we pride ourselves in understanding the complex rules around intellectual property deals, including deals involving the sale, license or joint development of patent portfolios. We understand how to write strong partnership agreements that clearly state the requirements and responsibilities for both parties and protect them from unforeseen but inevitable disputes down the road.  

Automotive suppliers are our specialty – we represent over 200 suppliers, including both the new and the established – and protecting their interests is what we do best. Contact us if you’re thinking about walking into this brave new world of automotive electronics collaboration.

Electronics are undoubtedly ‘the next big thing’ in the car business. If you believe the Time theory, those electronics will largely come from non-automotive companies. The R&D is already well underway but it’s not too late to get into the game. Warner’s experienced Automotive Practice Group can help you jump start your efforts.

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