Is Apple REALLY building a Car?

Share

applecar

The craziest rumour doing the rounds at the moment isn’t about the Samsung Galaxy S6 or the HTC One M9, but is centred on Apple. The biggest company in the world, the likes of Reuters is claiming, is working on building a self-driving, electric car.

That’s right – a whole car. But are these rumours credible? Now, I don’t have any super secret access to Apple, nor a crystal ball – but we can use what we know and the powers of reason to try to figure out if in a few years we’ll be

Why Apple could be building a car

Everyone is STILL talking about it

There’s no smoke without fire, as the old saying goes and despite the car rumours sounding insane, properly credible outlets like Reuters are now reporting the speculation, citing “industry sources”, which is usually code for the journalist’s mates who work at Apple. The fact that Reuters has a number of details – like the fact it is designing them in a building a few miles from its main headquarters, and when the unit was opened suggests there could be some concrete facts. Or a gigantic misunderstanding, of course.

Apple is known for going into markets and shaking shit up

Since Apple’s resurgence with the iPod, the company has built its vast fortune on going into existing sectors and doing something better than existing suppliers. Before the iPod, MP3 players were crap, lacked disk space and there wasn’t a straightforward way to get music for your device (enter: iTunes). Phones were the same: Whilst smartphones did exist, they were fiddly and poorly thought out, and it took Apple’s entry into the smartphone market to come up with a smartphone that was desirable and that actually worked well.

This is reminiscent of the car industry, which whilst steps towards electric cars and self-driving technology are slowly being made by the existing (dare we say “legacy”?) car makers, Apple could conceivably storm in with a car of its own, with production and design not weighed down by the weight of cars past: No thousands of older vehicles to continue to support, no difficult labour disputes with employees who have been working in the same way for years, and no risk of cannibalising sales of tried-and-tested petrol guzzling cars with something new.

Perhaps Tesla could be to the Apple Car what the Palm Trio was to the iPhone?

Apple will want to keep pace with the likes of Google

Apple’s biggest competitor is Google, and the two companies have gone toe-to-toe in a number of different product categories, ranging from phones, to web services to media boxes to… in-car computers. Would Apple really want to give Google the first mover advantage in self-driving cars? We already know Google is working on them.

It can probably afford to have a go

Let’s face it – Apple is loaded. It made $18bn profits in the last quarter alone, and if you’re going to spend it on something, you may as well spend it on something fun rather than more boring Macs or making shareholders slightly happier.

Why Apple possibly isn’t building a car

Cars are REALLY expensive and involve a different production line and supply chain

Cars aren’t much like phones – whereas the launch of the iPad or the Apple Watch involves getting the same companies in the supply chain to crank out more screens, processors and widgets, but cars have many more components and need a lot of stuff. Crucially there will be fewer synergies for Apple to leverage – meaning it will have to strike new deals and possibly even work with the older car makers that it implicitly is planning to destroy.

And once you’ve built the cars… how do you sell them? Apple will need to negotiate with car dealers to and haulage firms and mechanics to get the cars to consumers. Which, even if they are receptive, will be a lot of hassle.

And even if Apple can sort all of this stuff out, it is surely unlikely that Apple will be able to go big and wide right away. Forget shipping 60m iPhones in a quarter – getting a tiny amount of cars out there will be more difficult.

Car life cycles are different to consumer gadgets

How often do you buy a new car? Not as often as you buy a new phone, I’d bet. If Apple makes a car, it i setting itself up for over a decade of support for each model. When it launches new features (like when the iPhone added a front-camera), they won’t be ubiquitous after a couple of years, it’ll take much longer. How many people are still driving cars that have a cassette player instead of an MP3 jack?

Is self-driving technology really there yet?

This is the big unknown. There’s been a lot of talk about the technology – with proponents even suggesting that self-driving tech is already better than you or me at the wheel, but this so far remains untested on a large scale. Whilst testing has just started on British roads, it can’t be too comprehensive – and many different places will have radically different challenges. Will the Apple Car be able to self-drive on the snow-covered roads of northern Canada, the winding streets of Bristol and speed limit-free German autobahn? We simply don’t know.

Whilst electric might be an easier sell, if Apple launches a car it is only a matter of time until the first photos (perhaps taken on an iPhone) are shared showing an Apple Car is a car wreck – which could be a PR disaster.

Apple will have to solve the chicken & egg problem

As Tesla and other electric car makers know, there is a chicken and egg problem. People won’t buy electric cars until there are enough places to charge up – but places won’t install chargers until there are enough electric cars to use them. This means that even if you own a Tesla, there’s only a limited number of places you can drive without running out of juice.

Apple is perhaps one of the best placed companies in the world to fix this. It could use its massive wealth to beat this problem, simply by paying up front for thousands of charging stations to be built. Whether it will want to make such a big financial gamble though remains to be seen.

Legal hoops to jump through

Cars are necessarily highly regulated machines. Governments all have strict safety standards and testing requirements before a vehicle will be certified for road usage. Will Apple be prepared to do all of that? With the Apple Car, it almost certainly won’t be one of those Apple keynotes where Tim Cook says “…and its available RIGHT NOW!” to huge applause. The timeline will be long.

Will Apple be the coolest?

Something really interesting happened to the “luxury” phone market after the iPhone. No longer did rich people and celebrities want to be seen with, say, a Nokia Vertu phone, which was basically a normal phone covered in diamonds or gold. The hip new thing was to be seen with an Apple iPhone – the same iPhone that is used by scum like you or me.

The car market obviously has a big luxury component too. Will the same happen again? Or will Apple find itself going up against the likes Maserati or Ferrari and finding that, for the first time, the thing with the Apple badge isn’t the coolest thing in the room? Apple’s brand is all about presenting it as an elite product – and cars probably don’t fit with this.

Similarly, when the Apple Car makes its Top Gear debut, it is unlikely to be the fastest car ever made, or have the biggest engine – the sorts of metrics that tedious car bores care about. Sure, it will have some neat gizmos, but it probably isn’t going to be “Ice Cool” on the wall is it?

Customisation?

The other difference between cars and other consumer goods is that cars are highly customisable – with a myriad of options whenever you buy a car. Contrast to Apple and its philosophy of having a “one (or maybe two) size fits all” approach. If you want an iPhone, you have a choice of three colours and two sizes. If you want a Macbook, there’s only three sizes and a couple of processor options. Philosophically, cars as we know them are more Samsung – with a billion variations – than they are Apple.

Will the Apple Car make us give up our desire to customise?

Cars are falling out of fashion

It is becoming increasingly recognised that cars are no longer cool, with various studies showing interest in cars amongst millennials declining.

Whether this is a reflection on tough economic times, or environmental concerns, or something else entirely it is clear that the car isn’t in favour. Urban design is no longer about building bigger roads but prioritising public transport. Car use in urban centres like London is mercifully falling too – and bike use is growing. (Why can’t we have an iBike instead?).

Many commentators have speculated that the future of transport is shared. Nobody will bother owning a car when services like Uber are ubiquitous. And this is a good thing – as it means there can be less cars over all on the road, working around the clock rather than sitting idle.

If the death of the private car is increasingly inevitable, why would Apple want to launch a car? Unless it is planning something truly radical, like wholesaling the cars to the likes of Uber, cutting out consumers entirely?

In Conclusion

So is Apple building a car? I’m not entirely convinced, but I don’t think it is obvious nonsense… and hey, would such a radical move really be so surprising?

James O’Malley