We all know full well at this point that Apple is moving into the transportation market. Whether it be building its own car, partnering on a car, taking over the world of ride sharing, developing a worldwide advanced charging network, or providing unmatched automotive technologies and apps, Project Titan and the Apple Car name is working to disrupt the industry.
There have been many reports and analysts’ speculations about why Apple shouldn’t and won’t build a car, along with many that support the venture. There are valid arguments about why the “Why Nots?” could become “Why So?”. It’s more difficult to contest the reasons why building an Apple Car in this coming market is not a good idea.
Small profit margins has been pointed out over and over. Auto profits of 2.2% compared to iPhone profits of 65% is drastic. But, does Apple need to make a profit? Let’s not forget about all of the other profit avenues related to ride sharing, energy production, charging infrastructure and apps.
The high level of complexity of producing a vehicle is another major obstacle. 30,000 car parts to the 100 parts in an iPhone is more than notable. Established automakers have had years to figure all of this out. However, Apple is said to be looking for partners and suppliers and many of the company’s hires are those with years of proven expertise in the business.
Competition is huge in the auto industry. We could present a long list of all current successful automakers along with those that are delving into electrification and autonomy, or those that are pairing up with ride sharing companies, etc. The truth is, electrification and autonomy are still very small markets and of the long list of competition, only a few are diving head first into it.
Competition is also tough in the tech industry. Apple has to deal with the likes of Google, Microsoft, and Amazon. All three companies have their hands in automotive-related tech on some level. Obviously, Google is the front runner when it comes to that. But, it has been made abundantly clear that Google has no plans to build its own car.
Apple is known for aesthetic. The design of Apple’s products are part of the reason the company has been so successful. Due to safety standards, futuristic, innovative, non-traditional vehicle designs are few and far between. This is not to say that Apple can’t build a car with innovative interior and instrument controls and state of the art, never seen before tech comforts, without making it look like an “oddball”.
Timing is the key for Apple, as it has been all throughout the company’s history. In order to disrupt an ever-changing market, timing is really the number one component. The year 2020 has become a repeated mark for the “new” auto industry. This is the year that we are expecting electric car sales to become much more commonplace and for upper levels of autonomy to surface and meet government approval.
EVs are still more expensive than ICE vehicles, most have marginal range, governments are not yet fully mandating new emissions requirements, and most automakers are barely marketing the products to consumers. Currently, the market is still very small and it will take years to get to the point that electric cars and this technology is mainstream. Although Apple is an innovator, it has always been mainstream. It’s not the type of company to dive quickly into a struggling market that is not for the masses. If Apple can sneak in right in the midst of the explosion of the coming “electric, autonomous revolution”, with an eye opening, appealing product and trump the competition, it will have succeeded in its calculated and secretive project.
The “new” auto industry will be cars that are another “screen” for users. It is to become all about tech, software, apps, connectivity, mobility, artificial intelligence, self-driving, etc. The car will be much more about the tech than the vehicle itself. Though it’s been noted repeatedly that “Apple is not a car company”, Apple is one of the most successful tech company’s of all time. Who better to get involved in creating a technological masterpiece on wheels?
Apple has a massive amount of work ahead, regardless of what avenue is chosen. There is nothing hiding the fact that much of that work is in progress now and has been for quite some time.Whatever the company has under its belt should prove sure to amaze and disrupt.