Ferrari has made many beautiful cars. They are usually are fast, loud and dangerous cars. What has been common is the legendary Ferrari shape, less designed and more sculpted by Italian wind and testosterone. There is also the familar growl of the engine, and the legendary Ferrari red.

However, in a major departure from tradition and DNA, it has unveiled its latest car: the new electric Ferrari Luce. It does not look like a Ferrari, but more a love child of a staid fiat and a German luxury car. It does not even sound like one; the only sound one could hear was the collective groan of a thousand Ferrari aficionados. But it may be remembered for something else: it looks like the moment the car stopped being merely a car.

The Luce is Ferrari’s first all-electric vehicle, built on a dedicated electric platform, with more than 1,000 horsepower, a claimed range of about 530 km and a starting price of around €550,000. But those numbers are perhaps less interesting than the fact that the company turned to Sir Jony Ive and Marc Newson’s LoveFrom to help shape the car’s design language. Ive, of course, is not a car man. He is the man most associated with the iMac, iPod, iPhone and the philosophy that turned technology into desire. Ferrari says the Luce is an “entirely new Ferrari”. Markets and purists were less sure, with the company’s shares falling after a design some saw as too radical, too minimal, too unlike the old growling Ferrari.

But perhaps that is exactly the point. The Luce is not just an electric Ferrari. It is a Ferrari designed in the age of the device.

For a century, cars were machines of transportation. They were about engines, pistons, gearboxes, chassis, speed, steel and status. Even luxury cars were still fundamentally mechanical objects. But electric cars are different. If we remove the IC engine, the gearbox and most of the mechanics, the central theme of the car become batteries, software, screens, sensors, data, intelligence and over-the-air updates.

In other words, the car is morphing a device.

China understood this earlier than most. Xiaomi, best known as a smartphone and consumer electronics company, launched the SU7 electric sedan in 2024 and received 50,000 orders in 27 minutes! This is not how people traditionally bought cars; it is closer to the frenzy of a smartphone launch. Xiaomi’s car is meant to live inside a “Human x Car x Home” ecosystem, connecting phones, appliances and the vehicle into one continuous digital environment. The car is no longer an isolated product in the garage, but the largest screen, battery, sensor-array and software node in your increasingly connected life.

Huawei is pushing the idea even further at the top end of the market. The Maextro S800, developed with JAC and powered by Huawei technology, is being positioned as China’s answer to Maybach and Rolls-Royce. It comes with extravagant gadgetry with self-parking, digital cockpit features, large screens, advanced driver assistance and entertainment systems that seem designed as much for the software age as the driver age. Recent reports suggest it has been outselling traditional ultra-luxury rivals in China’s $100,000-plus segment.

Huawei is pushing the idea even further at the top end of the market. The Maextro S800, developed with JAC and powered by Huawei technology, is being positioned as China’s answer to Maybach and Rolls-Royce. It comes with extravagant gadgetry with self-parking, digital cockpit features, large screens, advanced driver assistance and entertainment systems that seem designed as much for the software age as the driver age. Recent reports suggest it has been outselling traditional ultra-luxury rivals in China’s $100,000-plus segment.

This is a profound shift. Earlier, car companies made cars and technology companies made devices. Now device companies are making cars, and they are bringing that worldview with them. User experience is more important than horsepower, the interface than dashboard, and the vehicle is another platform. The Chinese seem to have recognised that an electric car is not a petrol car with batteries stuffed in, but is a mobile phone with wheels attached

Probably Apple saw this too, which is why it spent nearly a decade trying to build its much-rumoured car before abandoning the effort. Had it succeeded, the Apple Car would almost certainly have been the purest expression of this idea of a device that happened to move at 100 kmph. Perhaps Apple failed because cars are harder than phones, and the they were more risk-averse than the Chinese.

This device-ification of the car has three big implications.

The first is design. The design language changes is more about the intuitiveness of the interface, the intelligence of the cockpit, the integration with your phone, and the AI assistant, rather than the curve of the bonnet or the shape of the grille. You can see this in the Ferrari and the Maextro

The second is data. The smartphone became the most powerful data-gathering object ever created, but the car may may become the next great data harvester. It will know where we drive, where we stop for coffee, which office we visit, how fast we brake, what we say inside the cabin, whether we go to the gym, the hospital, the mall every Thursday evening. It will capture not just digital behaviour but physical life.

The third implication is the most important: value will move from hardware to software.

We have seen this movie before. In PCs, hardware makers such as Dell and HP lived on wafer thin margins, while Microsoft captured the software economics. In smartphones, most handset makers struggled while Apple, which controlled both hardware and software, captured disproportionate profits. The device often becomes the shell, with the real meat being the OS, data and apps.

The same could happen to cars. If the automobile becomes a device, traditional carmakers risk becoming the Dells and HPs of mobility: excellent manufacturers of expensive hardware, while software platforms, AI layers, maps, autonomy systems, entertainment ecosystems and data businesses capture the real value. This is why Volkswagen, Toyota and others have struggled so hard to build their own software capability. They know that if Apple CarPlay or Android Auto owns the interface, the carmaker owns less of the customer.

Tesla understood this earlier than almost anyone. It is not merely an electric car company. It is the closest thing the automobile world has to Apple: integrated hardware, software, battery systems, data, charging network, updates and increasingly AI. Its valuation has always reflected this belief, with investors not valuing it like a car company, but as a data and AI platform company.

For legacy automakers, the portents are clear. The car once carried us through the world, and its beauty lay in its shape, sound, and drive experience. Now the car will watch, listen, compute, and perhaps even decide. The automobile is being hollowed out as a machine and refilled with software. The question for carmakers is simple: will they build the next great device, or become the beautiful metal casing around someone else’s operating system?

Jony Ive of the iPhone fame designed the controversial new Ferrari Luce; Xiaomi has the hottest car in China; Huawei is behind the largest selling ultra-luxury car there; Apple wanted its own car.

Device companies are making cars, and they are bringing that worldview with them. User experience is more important than horsepower, the interface than dashboard, and the vehicle is another platform. The Chinese seem to have recognised that an electric car is not a petrol car with batteries stuffed in, but is a mobile phone with wheels attached

In other words, the car is morphing a device.

The Luce is not just an electric Ferrari. It is a Ferrari designed in the age of the device.

Read more about the ‘device-ifaction of cars’ in my article in The Economic Times today http://bit.ly/4uTKBUl