The battle over market share in the automobile industry will be fought over technology, according to a study by Nielsen. With that in mind, CNBC’s Jim Cramer said an Apple Sirius XM acquisition would make sense so Apple can own more space in auto technology.
For the first point, consumers are already expecting a greater level of technology in their cars. Most of us have become accustomed to using Bluetooth to play music and podcasts from our phones through the auto’s stereo system. And GPS is now simply a table stake. It’s what you have to have to even be a car manufacturer.
But the stakes are getting higher because the differences between automobiles are small. They all last longer, get better gas mileage and have similar designs.
Now, though, the new expectation is that all cars will have rear camera mirrors, smartphone-linked media functionality, blind spot detection, surround view cameras and smartphone-navigation interfaces. If they don’t have those things, then you can’t be manufacturing cars.
That doesn’t even take into account the coming of driverless cars. Like most of our devices, we’re expecting our cars to be smart, just like our phones and, for some of us, our homes.
Apple Sirius XM would not fix Apple’s issues.
That’s why Cramer is proposing the Apple Sirius XM acquisition. Apple is reported to be working on a car itself. Even if that doesn’t happen (and I have my doubts), Apple wants to be more important inside the car than it is now. Just like any technology company.
But Apple Sirius XM is a bad fit. While Sirius XM is adding subscribers, it doesn’t fit within Apple’s brand. Apple doesn’t have permission to own Sirius XM. Actually, more accurately, Sirius XM doesn’t fit into Apple’s brand of “Think Different.” Sirius XM is radio and, while that has value, it does not represent the true innovation that has made the Apple brand.
Admittedly, Apple has lost its way a bit in fulfilling its brand promise. The brand that Steve Jobs built set very high expectations that Apple hasn’t met recently. It just keeps trotting out new versions of the products it already has, while purchasing Beats in an attempt to goose Apple Music. What would it need Sirius XM for?
If I were Apple, I’d concentrate on new products, not just acquiring new properties in the hope that they will help. Any new innovation must come from Apple. Because the reason people buy Apple products and stand in line for the first run of them is because of the brand.
If the new product or service does not represent “Think Different,” than Apple shouldn’t do it. And Sirius XM is not different.