Who knows whether Apple is getting into the electric car business. There’s been lots of news articles over the past week claiming that to be the case, and that Apple has poached automotive industry talent from Tesla and other automakers. That doesn’t necessarily mean Apple wants to enter the business of building cars. There’s a big need for Apple to have a foothold in car dashboards so that Apple’s mobile iOS devices play better in cars – and maybe that’s the extent of the deal. Who knows?
But, I’m reading a piece on Bloomberg Business by David Welch and Dana Hull, the latter being a long-time technology journalist here in Silicon Valley, and am suspicious over their reasoning.
For the record, they state as fact that Apple has a skunkworks project started on an electric vehicle resembling a minivan, named Project Titan. Further, that if Apple gets to market it will automatically challenge not only Tesla Motors but the alphabet soup of incumbent automakers.
Which just makes me think of that scene in Revenge of the Electric Car where GM Chairman Bob Lutz is talking about how difficult the car industry is, and while he wishes Tesla Motors all the luck he doesn’t think they’ll make it very far. That Tesla Motors took so long to get to market is itself a sign of the difficulty of breaking into the automotive manufacturing business.
Let’s first look at the “reasoning” as to why Apple should make cars … then discuss that reasoning.
First – Apple wasn’t in the “phone business” but they succeeded at disrupting that industry with the iPhone.
They sure have, and I’m on my third iPhone and still sticking with the platform even though Android is growing in my mind as an alternative.
Second – Apple has gobs and gobs of cash burning a hole in its pocket. Apple could fund 20 years of General Motors out of its spare change.
Yes, Apple could blow a lot of money in the car business and they surely have the bucks on hand to do so. But does that mean Apple would be wise to try?
Third – the coming wave of cars are even more like electronics devices. Autonomous driving means computerized everything, sensors out the wazoo, and so on. Electric vehicle drive trains, computerized infotainment systems, 3G connectivity, fancy schmancy dashboards … Apple has some indigenous talent that overlaps with many of those things.
In other words, since many think “cars” are becoming the next “consumer electronics device” and that Apple is now the king of consumer electronics devices, that Apple should be able to succeed at “cars”.
Fourth – Just because Apple has gobs of cash they have to find a way to spend that cash therefore it’s inevitable they enter the car business.
If it’s not clear, I don’t buy this line of reasoning. I don’t think Dana Hull nor David Welch understand what’s happening in the EV market.
For example their article claims that Nissan lowered the price on the Leaf, and GM lowered the price on the Volt, because of falling gasoline prices. WTF? In both cases those lower prices came in 2013, well before gasoline prices fell. In Nissan’s case the Leaf price was lowered because the factory in Tennessee started production, letting Nissan finally ramp up the production rate, and not have to pay import duties to bring cars to the U.S. In GM’s case they just wanted to make the Volt have a more competitive price, in response to the lower Leaf price, and they found ways to squeeze cost out of the Volt.
Welch and Hull seem to think a big company can wave a magic wand and enter the car business. While they did spend several paragraphs talking about the difficulty of doing so, they relate an idea from Eric Noble that Apple could just use their wizardry in human-machine interaction to make better drive controls or even self-driving car technology. Hence, Apple wouldn’t have to become a “true carmaker”.
Sputter..sputter… WTF??? What kind of baloney reasoning is this?
It doesn’t matter if it’s a self-driving car or not … it’s still a car. That makes it a hunk of metal parts that are going to be carrying you at 70+ miles/hr on the highway. It’s still an incredibly complex machine, a kind that Apple has zero in-house knowledge with anything even remotely similar. Self-driving car algorithms are not that simple, and carry lots more risk than do other kinds of cars.
Consider – what happens when a self driving car gets into a collision? Won’t it be the automaker who will be responsible for the accident? As it is, the automaker is rarely blamed for collisions because there’s an obvious culprit behind the wheel. But a self driving car is driven by algorithms designed by the automaker, and therefore the automaker has full responsibility over the result.
That doesn’t mean Apple has to be the Automaker. They could break into the market by designing control systems and components, letting other companies take care of designing the “car”. Apple’s pattern-to-date however is to design and build products themselves, not make parts for others to design into products.
As an Apple customer since Mac OS X was first made available – I’m very worried to hear that Apple is thinking in this direction. It could be extremely expensive for them and make the company fail, even with the gobs and gobs of cash in their back pocket.
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