Apple car isn’t as unlikely as one would think
The reports that Apple is planning to make a car sound, at first blush, crazy.
Think about all the reasons that is a bad idea. For one thing, the auto industry isn’t for the faint of heart. It is tough to make money, and the industry regularly grapples with complex safety, labor and regulatory issues around the globe. As Exhibit A, look at the recall of faulty air bags taking place right now.
In addition, the field is crowded with scrappy worldwide and U.S. competition — and that’s before the Chinese have made a big push in the car market.
If it is serious, Apple may also be a little late to the game, since Tesla has already captured much of the excitement over beautiful, high-performing electric cars. And Google is well along in its efforts to bring the future closer with self-driving cars.
It’s also hard to imagine Apple designers wanting to craft state-of-the-art cup holders, bumpers and seat belts. In an interview with Bloomberg News, Dan Akerson, the former CEO of General Motors, described Apple making a car as “trying to cough up a hairball.”
But people are focusing on trivial concerns and overlooking what is at stake for Apple. The iPhone maker could remake the automobile, and the car could reinvent Apple.
Cars have long been known as “the third space,” the place where we spend a large chunk of time outside of home and work. In our cars, we are a very captive audience.
The car is the “ultimate mobile device,” said Thilo Koslowski, a vice president and the automotive practice leader at Gartner. But today the car is the least “smart” device out there, he added.
Enter Apple, which needs to worry about its next big area of growth. To find it, the company has to become an even bigger part of consumers’ lives, which are already saturated with iPhones and iPads.
We still spend a lot on cars. Outside of buying a home, purchasing a car is the biggest expense for most consumers. And the industry is growing, said Karl Brauer, a senior analyst with Kelley Blue Book.
Apple has “the financial and intellectual engineering might to become a car manufacturer if they want to,” Brauer said. “The big challenge is, would they be satisfied only making 5 to 10 percent profit? You can find a lot more reasons not to be a car manufacturer than to be one. But then again, no one would have thought of investing in digital music players, and that reinvented the company.”
Already, Apple has a dashboard system called CarPlay (Google has a similar system called Android Auto) that is sold in some cars. It offers buttons to do things such as send a text hands-free or to make a call.
But CarPlay is just the beginning, analysts say. The more ambitious idea would be for Apple to curate the car experience, from controlling the aesthetics to bridging the digital divide between the vehicle and the smartphone.
That sounds interesting, but I can’t imagine Apple happy with being the user interface provider to General Motors or Ford, even if the automakers make co-branded “Apple cars,” similar to what PC makers did with Intel with its “Intel Inside” campaign.
Apple may feel the need to be bolder. One knock on the company is that even with its nearly $200 billion in the bank and quarter after quarter of record sales, it doesn’t take advantage of its creativity and know-how to do more. Its newest product, Apple Watch, which goes on sale in April, is exciting but not a world changer. It’s more like a cool iPhone accessory.
An Apple Car would answer that critique and transform the company.
It would be a tremendous leap, given the company’s focus on “extreme quality control,” said Alan Deutschman, author of “The Second Coming of Steve Jobs” and a business journalism professor at the University of Nevada, Reno. He is skeptical about the Apple Car. But still, “when you are a company sitting on a tremendous amount of cash, there is this pressure to invest in the next big thing. There’s a temptation to say, ‘We’re the smartest around. Let’s attempt it.’”
And finally, the Apple Car makes sense because there will be a market among the Apple fans who, rather than hold an Apple device, would want to be inside one.
I have no idea what an Apple Car would look like or how it would work.
But Apple has a proven track record of astounding people by reinventing ordinary products such as the music player, the phone and the watch. It wouldn’t put its energy into a car unless Apple thought it could make something special.