by A. R. Bunch
The idea that Apple would build a car is both obvious and counter-intuitive depending on when the thought first pops into your head. The idea of a personal electronics company, no matter how big and dominant they may be, making the jump into something as entrenched as the auto industry sounds silly. Typically it’s considered a good idea to stay relatively close to your core competencies when swallowing up new markets. Adding to the fogginess of the notion is the fact that Apple kept a neither confirm nor deny attitude about it. But that’s a lot like asking a politician if he/she has ever lied. SOP is demure and smile.
Still, as cars became more technological with each passing year the idea of a tech company getting on board became easier to swallow. And if a tech company were to make that leap surely it would be Apple. Then Tesla did what DeLorean couldn’t and with a successful foray into the car market proving you don’t have to be born before WWII began to start a car company.
Suddenly everyone was digging deeper, September 22, 2015, both CBS and AutoWeek broke online stories about it based on a Wall Street Journal story which was based on unnamed sources. Which these days would be proof enough, but back in high days of journalistic integrity of 2015 they researched for confirmation and found that Apple had in fact communicated with the California State DMV about their rules for autonomous driving vehicles, they’d explored an auto testing facility in California and they’d poached a number of serious auto and battery engineers from other companies.
Even the Onion got in on the act imagining what the features of an Apple Car would be, including of course a Cup Holder, and a windshield with 4 times the pixels of real life that broke easily but without affecting the cars ability to run. Of course, the “iCar” would be compatible with most major roads, prompt you to log into iCloud every time you shift gears and suggest the speed you travel based on speeds you’ve gone before.
Humor aside, this leads to a number of follow-up questions like, would Apple try to manufacture it themselves or outsource it to one of the manufacturers they already have a relationship with? Are they willing to develop a whole car or maybe just software they could license to other manufacturers who’re diving full force into autonomous vehicles?
It’s hard to say how long Apple CEO, Tim Cook, has been serious about cars but it’s likely that Apple tried to begin their journey into cars by acquiring Tesla from Elon Musk in 2013. When that didn’t work out, Apple bought a secret facility in SunnyVale, CA and put a thousand employees in it under a shell corp. called “SixtyEight Research” which would later become “Project Titan.” Then followed the months of secretive employees turning their name badges around so their names couldn’t be spotted through a long lens and other little signs that Apple was hiding something.
By the time the WSJ broke the story of a rumored 2019 release date, it seemed like legitimate news. But it was Motor Trend that really blew open the doors to show us concept sketches and questions even beyond autonomous driving. Questions like, would Apple forgo selling the cars and pioneer a car share program where you check the car out like a library book or maybe co-lease it. It’s certainly possible to have a digital license plate that changes with each new driver so that both car registration and driver identification is in one spot. Or imagine not having to pay much for your lease because sponsors underwrite the cost of your ride on windshield advertising. How’d you like to get into your car and have a Siri-like voice ask if you’re going out to eat? Then the car offers to reduce the price of your ride if you’re going to McTaco King.
In February of this year, Digital Trends exposed a December letter from Apple’s director of product integrity, Steve Kenner, to the NHTSA (National Highway Traffic Safety Administration). In it, Kenner offered comments on the NHTSA’s plans to regulate autonomous vehicles. The letter was weakly explained by spokesman Tom Neumayr as a defense of investments Apple’s made into “machine learning and autonomous systems” which could be used in other things…like you know, self-driving cars AND…you know, other stuff. Probably.
The Digital Trends article is thorough, if exhaustive, going blow by blow through each phase of rumor and supposition. It’s a good read and brings to light interesting points like, is Apple intending to have a nationwide chain of charging stations, not unlike old Standard Oil’s gas station chain?
Most of the talk around Project Titan from February until now has been on one side or the other of the big debate: is Apple making their own car or are they going to provide software and technological innovation to other manufacturers? The website MacRumors is a good example, coming down firmly in the camp of “not their own car.” They provided this concise summary of the 2017 news so far.
However, ComputerWorld makes an even more compelling case for the idea that Apple has always intended to make its own car going back to Steve Jobs in 2008 and will not easily give that idea up.
They support their reasoning with the following points:
- Apple reached $800 billion in market capitalization. The move to cars would leap from a half-trillion dollar electronics and cell phone markets to a potential $2.6 trillion auto market.
- Apple has invested an estimated $5 billion in automotive technology since 2013, including Didi Chuxing (think Chinese Uber). Even a company the size of Apple doesn’t throw away $5 billion.
- If Apple decided to only do software they’d be following a Microsoft business model, not an Apple model where they offer software, services, and hardware (which is manufactured by 3rd) Even amongst the shakeup in team titan, Apple is poaching German-speaking engineers and cozying up to Manga Steyr, a contract manufacturer for BMW, Mercedes-Benz, Aston Martin, Audi, Fiat, and Peugeot.
- With $256 billion in its war chest, Apple can buy up innovation if they need to. Meaning you’d have to see inside Tim Cooks mind to know if they are on their timeline or not. They believe their core competency is user experience and it doesn’t matter if they invent something after it’s been on the market for a year, an army of loyalists will line up to buy the latest “invention.” Just look at the iPhone, the Apple watch, they iPad, etc.
- The current auto industry has spent decades fighting for the top spot of “driving experience.” They lose their head start the moment cars start driving themselves. When your car becomes the ultimate mobile data device Apple’s recognized brand will be well positioned to compete. If software as a service is here to stay, then Apple can turn your commute into a service with an experience they control.
The only real question that remains is:
- will your commute be sponsored by mega-corporations because Apple retains ownership of its vehicles, or
- as the Onion jokes will the sticker price be $85,000 (or $199 with two-year Verizon agreement)?