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  • The Apple Car — Again

    April 19th, 2016

    Ever since rumors first arose about an Apple Car, speculation has been fairly consistent. Apple has established a Project Titan, and has leased property in Sunnyvale, CA, near its Cupertino headquarters, at which to develop and test possible prototype vehicles. Recently, a project lead left the company, and there were rumors that Apple’s head designer, Sir Jonathan Ive, wasn’t happy with the results.

    Of course, none of this has been confirmed, other than, apparently, the fact that there is a facility of sufficient size to develop a car that may or may not belong to Apple. But Apple won’t say anything beyond, perhaps, interest in the car business. You shouldn’t expect anything official unless or until Apple is actually planning on selling such a beast.

    Some rumors point to a possible Apple partnership with BMW, the luxury car maker, but that would merely indicate Apple didn’t plan on building something that most car buyers would regard as affordable. Sure, BMW makes the Mini Cooper, a subcompact that starts at a reasonable $20,700, but you can option it up sufficiently to bring it close to $40,000, which is definitely in luxury car territory.

    Regardless, up to 1,000 people were supposedly hired for Project Titan, and most were veterans of the auto industry, including some employees that supposedly came from Tesla, which is expected to be a key competitor.

    A new report, also unconfirmed, has it that Apple has set up a secret lab in Berlin, with some 15-20 people working at, one presumes, Project Titan. The report suggests that Apple plans to partner with Magna Steyr, a contract auto manufacturing facility in Austria that has worked with a number of auto companies. Their clients range from the cheap to the ultra-luxury and include Tesla Motors.

    Now it may well be that Apple is indeed engaged in a Project Titan, and they are exploring the potential for building a vehicle. Or perhaps it’s all or mostly about building test beds for future versions of CarPlay. Or perhaps a combination of both.

    Even if all these rumors are all or mostly true, that doesn’t mean you will someday be able to order your very own Apple Car at any price. Building an automobile is obviously very different and far more complicated than anything Apple has done before. Even though some suggested Apple was out of its element with the first iPhone, it was basically a mobile computer, and Apple knows computers.

    A car will include various computerized systems to manage different functions, and Apple can no doubt master those features. Apple also knows a thing or two about batteries. But the rest, the shape, wind tunnel testing, bumpers, air bags, seats, engines, suspension, the wheels and brakes, not to mention meeting complicated government requirements around the world, well, that’s a huge leap. It doesn’t mean Apple can’t do it. Clearly Tesla Motors found a way, and if Apple is truly partnering with BMW or another seasoned auto maker, I’ve little doubt they can accomplish something great.

    Even if Apple decides to green light a car, there will be lots of questions left to answer. Will it be an affordable mid-priced vehicle, in the range of a Honda, something closer to the Tesla Model 3, which is closer to the price of a compact luxury car, or will it be an expensive vehicle that competes with a Tesla Model S? Will Apple follow the Tesla playbook to focus on the high-end for the first models, then move to more affordable vehicles?

    After a product roadmap is established, where does it get built? At an existing manufacturing facility where production capacity is leased, or would they start from scratch? Tesla builds its cars at a Fremont, CA facility that was acquired from GM and Toyota. But it hasn’t done the rest by itself. Tesla has manufacturing and technology partnerships with the likes of Daimler G, Toyota, Panasonic and Airbnb.

    Even after the manufacturing facility or facilities are established, Apple would have to consider how to handle the dealer network. Tesla chooses to run their own stores, which is fine so far as it goes. But there are areas of the United States where state governments aren’t allowing them to set up company showrooms. A key reason is that existing auto dealers have strong lobbies that are designed to prevent manufacturers from encroaching on their lucrative franchises. So Apple could start with potential and time-consuming legal disputes even before the first vehicle ships.

    I suppose Apple could work out a hybrid deal, putting company stores in areas where it’s allowed, and setting up third-party franchises where it’s not.

    If Project Titan reaches fruition, it’ll be an electric car, with a completely rethought user interface. The buying experience may also be quite different from the current Persian bazaar schemes still being used in the auto industry, and that would be a refreshing change. Again, reminiscent of Tesla.

    What may not happen at first is delivery of self-driving vehicles. That technology has yet to be perfected, and unless Apple has already invented something altogether unique — which is possible — you’ll drive the first Apple Car or its successor in the normal way. Consider also that Apple isn’t always first to market with a new technology; they wait until that technology is perfected. So perhaps they’ll give Google and Tesla plenty of time to build and wreck autonomous driving vehicles before diving in with a unique and more reliable solution.

    But unless my financial situation improves considerably in the next few years, I do not expect to be a customer for an Apple Car, or a Tesla for that matter. But I can always dream.



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    One Response to “The Apple Car — Again”

    1. dfs says:

      I’m old enough to remember the postwar years when three European cars were introduced over here: the British Morris Minor, the French Renault Dauphin, and the German Volkswagen Beetle. The former two flopped and only the Beetle survived and fared well. The reason had nothing to do with quality of the vehicles themselves (the Minor and the Dauphin were both fine, sturdy cars) but rather with the fact that only Volkswagen had a coast-to-coast network of dealerships, featuring factory-trained mechanics and well-stocked replacement parts (well, okay, Volkswagen’s brilliant and aggressive advertising didn’t hurt either).

      The takeaway here is that building cars isn’t enough. You also have to support them with an adequate infrastructure in order to keep them running. Apple might be capable of designing a killer car. But if it doesn’t have the expertise to create and maintain such an infrastructure, and if isn’t willing to make the necessary capital investment this requires, the Apple Car will quickly become as quaint a collector’s item as the Minor and the Dauphin.

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