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Daimler CEO Rants that they Won't be the Foxconn of Car Makers for Apple

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Late last month Daimler's CEO Dieter Zetsche placed emphasis on working with Apple and Google in context with advanced software. While acknowledging that some form of cooperation with Apple could be possible for system software for cars, Zetsche made it crystal clear that they "don't want to become contractors who have no direct content with customers anymore and supply hardware to third parties." If that statement wasn't clear enough, Zetsche clarified Daimler's position at the International Motor Show in Frankfort today.


Whether or not Apple's secretive car project ever leads to an actual automobile, the technology company has already had a profound effect on the vehicle business.


The mere knowledge that Apple has a team of several hundred people working on car designs changed the conversation this week at the Frankfurt International Motor Show. Along with Google, Apple has focused the minds of auto executives on the challenge posed by new technologies that have the potential to disrupt traditional auto industry hierarchies.


Oh how times have changed. At this Motor Show, 'connectivity' has supplanted 'horsepower' or 'torque' as the prevailing buzzword in Frankfurt. The talk is of self-driving cars, battery-powered cars and information technology designed to link cars with data networks to make driving safer and more efficient.


Even though neither Apple nor Google are close to mass-producing a vehicle, nervousness about their intentions — which remain cloaked in mystery — is understandable.


As cars increasingly become rolling software platforms, Apple and Google have depths of tech expertise that the carmakers would have trouble duplicating. Additionally, it's quite obvious that both tech companies have staggering financial resources that dwarf those of even behemoth companies like Daimler and Volkswagen.


The main risk for carmakers is probably not so much that an Apple car would destroy Mercedes-Benz or BMW the way the iPhone gutted Nokia, the Finnish company that was once the world's largest maker of mobile phones. Rather, the risk is that Apple and Google would turn the carmakers into mere hardware makers — and hog the profit.




Carmakers say they are determined to resist that danger by maintaining control of the software that is proliferating inside vehicles.


Dieter Zetsche, the chief executive of Daimler, the maker of Mercedes vehicles, told reporters at the car show in no uncertain terms that "What is important for us is that the brain of the car, the operating system, is not iOS or Android or someone else but it's our brain."


Zetsche added that "We do not plan to become the Foxconn of Apple." referring to the Chinese company that manufactures iPhones.


The aggressiveness of Zetsche statements could be interpreted that Apple is indeed shopping the idea around to find a car company willing to manufacture an Apple Car just like Foxconn does the iPhone. If Daimler isn't interested then I'm sure that Apple could find others willing to partner with Apple with open arms.


Yet for now, one statement or one car show full of speculation still isn't enough to cement the idea that Apple is imminently going to get into the car business beyond developing advanced system software. For more on this story, read the full New York Times report.


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