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  • Grasping for Straws about an Apple Car

    March 20th, 2015

    After the initial flurry of reports about Apple setting up a project to create a car, the talk has sort of died down. This is quite understandable. Even if true, such a beast won’t appear for several years, unless Apple pulls off a miracle in setting up a manufacturing and dealer network. Regardless, there’s always room for a good Apple story.

    So let’s briefly consider how one particular report dealt with it. Do the choices Apple’s executives make about which cars they buy reflect on their priorities for building an Apple alternative?

    I suppose if you believed that, you’d have to wonder what sort of music players Steve Jobs might have used before Apple introduced the iPod. The answer is probably none except for testing, because the iPod broke the mold.

    Smartphones? Steve Jobs was happy to denigrate whatever was out there, and it’s clear the iPhone went its own way. So you couldn’t look at earlier models as inspiration for Apple, or maybe consider them inspiration of what not to do.

    So when it comes to a car, if Apple really planned to build one, and isn’t just prototyping for future versions of CarPlay, just how would it resemble or differ from current offerings? That’s the great unknown.

    Remember, this is a well-trod market, and few new car makers have actually been established in recent years. Quite often, new brands are merely versions of existing models at higher price points, such as the Lexus division of Toyota, or the Acura division of Honda. But that’s just a way to expand a company’s presence in the marketplace.

    In the car business, it’s more about attrition. So when I was real young, I dreamed of owning a Studebaker Avanti, a futuristic fiberglass-clad touring car. But Studebaker died in 1966; other companies kept the Avanti going for a while. It was followed by American Motors, and later by individual brands, such as Plymouth, Saturn, Oldsmobile, Mercury and so on. Tesla, though it seems reasonably successful for now, is a rare exception.

    I’m not considering Chinese car makers or other companies that do not yet have a U.S. presence. But it’s a sure thing that Apple would be coming to a party where newcomers are rarely welcome, and rarely survive. Still, it may happen, though not for several years.

    In any case, there’s not a lot to go on now, other than those reports of “Project Titan,” the alleged code-name for Apple’s automotive venture and the fact that they’ve scooped up executives from the car industry. All well and good, but it doesn’t guarantee that it’ll bear fruit.

    So what’s the media going to do to keep the story alive? Sometimes it seems they are really getting desperate.

    So there’s a report today that describes the cars key Apple executives own now, as if that’ll give us a clue as to what they are planning. We know, for example, that Jonathan Ive adores expensive sports cars, such as the Aston Martin, the brand favored in the James Bond movies. He is also reported to own a couple of Bentleys, which are usually big, fat, luxurious and as far from economical as you can get. But to show you how industry consolidation works, Bentley, regarded as a British moniker, is now owned by Volkswagen of Germany.

    Would Apple be considering super expensive sport sedans? Well, the Tesla Model S is certainly not cheap, but it’s quite inexpensive compared to an Aston Martin or a Bentley. But how does going that route make Apple unique?

    Remember that, even though Apple gear is traditionally regarded as luxury priced, it is usually only a little more expensive than other mainstream brands, and often not more expensive at all. I suppose the Apple Watch Edition might be the rare exception, but it is intended to compete in an exclusive market where luxury watches at $10,000 up are considered relatively affordable.

    But what about Tim Cook? What does he motor around in? Well the story has it that he drives the very traditional BMW 5 series 4-door sedan that is commonly purchased by lawyers, middle managers, you get the picture. Despite his riches, he’s not investing in anything more than a traditional and, to some, boring mid-sized luxury vehicle.

    Eddy Cue sits on the board of Ferrari, and he and Philip Schiller own the sort of luxury cars you expect to be in the garage of wealthy executives. They are predominantly European, such as Aston Martin, Bentley, BMW, Ferrari (naturally), Jaguar and Porsche.

    You can say they all have tastes for high-end vehicles. They enjoy spending at least some of their well-earned riches. But do their personal preferences give us any clues at all as to what type of vehicle Apple might produce? Don’t forget that Apple usually breaks the mold, so you can’t judge their plans on the basis of existing models, even if key executives own those vehicles. If Apple Watch is a guide, Apple would want to enter the car business just above the mid-range models, but still keeping them affordable with generous lease or loan packages.

    In short, the Apple Car won’t be a direct competitor to an Aston Martin or a Ferrari, or even a BMW. If Apple builds such a product, don’t expect it to be like any other car on the market. But you may actually be able to afford one.

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    3 Responses to “Grasping for Straws about an Apple Car”

    1. Tony Vitale says:

      My take on this is that Apple is not going to build a auto , however if they follow their usual ” Think Different” philosophy I do believe that there is enough evidence to prove tha Apple will design an auto to be Buikt by Tesla. Check out my thoughts on this on my post.

    2. Kaleberg says:

      There is a definite pattern. It has been a while since digital gadgets have been able to compete on gigahertz or megapixels. If Apple is to continue growing, it needs product entries in other consumer markets. (Apple has never played to the enterprise market. It sells to people spending their own money however it was obtained.) It is obviously moving into personal accessories with its acquisition of Beats and introduction of the Apple Watch. It already has a presence in automobiles, but it is as a GPS, music player or hands-free phone and in only so many vehicles. There is a lot more it could be doing given how awkward most automobile controls are laid out. If you are traveling with an iPhone or iPad, why should you need to learn the layout of the auxiliary controls (heat, defrost, radio, wipers, lights) on a rental car? I could see people buying an Apple option when buying a new car, and only Apple would stand a chance of making it a real option, not just a part of an expensive package.

    3. dfs says:

      There’s a whole lot of difference between Apple building its own cars and entering into partnerships with one or more existing manufacturers. When a major corporation moves into an entirely strange new market it can fall on its face — remember what happened when the Disney Corp. acquired a NHL hockey franchise? Apple could burn its way through several of those famous billions in its cash reserve and have nothing to show for it but headaches. But when it brings its own expertise to the table and pools it with somebody who already has the requisite expertise, some very good and exciting things could happen.

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