Should Apple Dive Into The Automobile Venture Alone?

CEO of Fiat Chrysler, Sergio Marchionne, spoke at the North American International Auto Show in Detroit, Michigan January 11, 2016 and again this week at the Geneva auto show. He advised that Apple should not make a car on its own, and that this yearn to do so is an “illness”. Marchionne said:

“If they have any urges to make a car, I’d advise them to lie down and wait until the feeling passes. Illnesses like this come and go, you will recover from them, they’re not lethal.”

He explained that Apple should consider collaboration with companies that already have a track record in place. It’s a “complex business” that requires a partnership for such a newcomer.

Much like the similar words of Bob Lutz, Marchionne’s opinion and experience may hold weight. He feels that:

“Existing auto companies have enough spare production to accommodate Apple’s needs.”

Keep in mind, however, that any company, and specifically Fiat Chrysler, would be happy to see Apple back down at this point. Apple has been extremely successful in all of its endeavors. Who would want that type of competition looming? Especially as the industry is surging forward with electrified and autonomous vehicles.

Will it prove better for companies to bully Apple and rally doubt or entice Apple to join them as a team?

Source (Reuters), (9t05Mac)

11 Comments on Should Apple Dive Into The Automobile Venture Alone?

  1. some say Apple should team with Tesla. I don’t see that happening.

    How much cash is Apple sitting on? How long can it last? Starting a new car company should take care of all that cash in real hurry.

    • They’re sitting on about $150B in cash, and that increases every day / quarter / year. Even if Apple’s sales stayed flat, they would have cash equal to their current market value in less than 7 years.

      And with $150B in cash and positive sales, Apple wouldn’t need to spend any of its own cash because financiers would be lining up to put money into a safe place. In fact, Apple has been issuing bonds to pay for it’s $50B stock repurchase program because it makes financial sense.

      There’s no doubt Apple doesn’t have a financial obstacle to launching a car. If you know Apple, the only thing that will hold them back is if they don’t feel they can offer a compelling product.

  2. Hey guys! (my first post here)

    George, Apple is loaded with cash. I think I remember reading it is in the neighborhood of $180 Billion. So yes, they can afford a little “side project” like an iCar.

    I think they will do their own car rather than teaming up with Tesla or BMW or subbing it out to another company to build. It seems like going solo is the way they roll.

  3. This statement was once thought to be radical science fiction – but now is fully expected (even by the auto industry itself):

    “By 2030 – Self driving electric cars built by robots and guided by AI – will autonomously come pick you up when you leave your door to take you where you want to go”

    In such a world – how would Apple, Google ,GM or Toyota make money in the auto industry? That is the question they have to answer. Hint: it probably won’t be about MPG, horse power, Paint color – Model year styling or 0 to 60 times.

    It is much like what the Newspaper industry has to figure out RIGHT NOW.

    Kodak failed to figure this out 10 years ago.

    Encyclopaedia Brittanica failed to figure this out 15 years ago.

    The lesson is: if you have been wildly successful at doing something for 100 years – you are doomed if you think you will be doing the same thing in 15 years time. That goes for all of us as individuals as well.

    It is exiting to be alive at this time.

  4. I think Apple has always capitalized on its uncanny ability to marry hardware and software seamlessly and brilliance of design. This is why I think they will build their own car designed by themselves with their own self-driving CarOS inside.

  5. Partnering with the FIAT group and Marchionne is a terrible idea. Not only does Marchionne despise electric cars (even his own Fiat 500e), the FIAT group’s quality is at or near the bottom of the rung for all their vehicles. That is very un-Apple-like.

    • Marchionne thinks he will be able to tap Apple’s vast cash reserves to pull his butt out of the sling, but no way would Apple align themselves with a company known for decades for shabby quality.

  6. “Should Apple Dive Into The Automobile Venture Alone?”

    Apple has already decided not to go it alone…they have acquired (by hire) a sizable army of “car guys” that have general & specialty technical automotive knowledge; cherry picking the-best-of-the-best. What Apple does not acquire by taking this acquisition approach is established automotive factory lines, established dealer franchise sales channels, and all those tag-along things which Apple would likely view more as a legacy liability than a starting asset.

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