Automobiles have come a long way since the first Fords rolled off the assembly line way back in the last century. For the most part, despite a constant stream of refinements, cars are much the same as ever.
Engine, wheels, seats, steering wheel, pedals. Every car’s user interface varies a bit but they have commonality; brake, accelerator, ignition, blinkers and wipers, mirrors, and, again, the steering wheel. Air conditioning, power accessories, stereo systems, and safety equipment aside, not much has changed from the basics.
Apple’s history with products has been to revolutionize the product and disrupt the status quo by thinking different. When it comes to the car, what does Think Different™ really mean?
Perfection At A Price
Venerable Consumer Reports touts Elon Musk’s Tesla Model S as the best car it has tested. Fit, finish, drivability, safety, handling, comfort, and fuel mileage, Tesla hit a home run, but at a cost. A Tesla Model S with gasoline engine-like driving range pushes $100,000. And Tesla loses nearly $10,000 on every Model S it sells.
Technologists, futurists, market prognosticators, and the technorati elite point to Google’s self-driving car as the future of transportation. Somehow they ignore all the benefits a human driver; including driving in the rain, traversing snow packed streets, and the ability to continue on the road during windstorms, dust storms, and streets near schools and parks.
Money And Titan
For all of its secrecy, Apple has a few leaks in the Cupertino, CA ship’s hull and word is out. Apple is working on a car. The research and development effort is called Project Titan, and more than 600 people are working to bring an Apple designed and built car to market in a few years.
Just as smartphone executives laughed at the iPhone when it was launched, many automobile industry executives have warned that Apple venturing into the car business could be an exercise in filling up a money pit. Maybe so. But who has more money than Apple?
Historically, Apple tends to look at product markets through different lenses than those already churning out traditional products in the same industry. The Mac? Much different than DOS PCs or even the Apple II before it. iPod? Different. iPhone and iPad? Different. Watch? Different. All those products set the design standard and moved their respective industry segments forward and the rest of the competition followed.
What About A Car?
What would or could Apple do to the car that would change the industry? Electric cars? Not unless the company has a super secret way to build batteries that last a month. Self driving cars? That’s possible, but Apple often allows others to fail before building the right solution, and self driving cars are so new there are none to buy.
Other unique power solutions come to mind but few are mature enough to disrupt the industry, including solar powered cars, hydrogen powered cars, so Apple will need to Think Different™– really different– to change the way the world uses cars.
How about entertainment and navigations systems? Or, seating and comfort? What about the price and market target? Apple defines affordable luxury, and an Apple Tesla-like electric, self-driving car would seem to be priced beyond the reach of of most people; a very un-Apple-like proposition, despite the company’s penchant for owning the premium end of a product spectrum. The auto industry has premium, and it has luxury with a product pricing spread beyond typical for Apple.
When Apple disrupts a technology industry segment it usually does so with a clever combination of features and functions– some of which are unique, and some of which are reworked but standardized components– to make a product that does more, does it easier and better, costs a bit more, but solves plenty of the problems others have not.
The How To
Critics assume Apple will partner with a current manufacturer because it does not have automobile manufacturing expertise, doesn’t have a line of suppliers, and just doesn’t know how to make cars. A car manufacturing facility, a factory, could cost many billions of dollars, but for Apple, money isn’t the issue. The company may be the best technology company in the world at building an efficient supply chain, so I don’t see that as an issue, either.
What will Apple do?
Here’s what to expect. Apple will out-Tesla Tesla and build an electric car with greater driving range, a lower price, and a gee-whiz package of electronic gadgetry that interacts well with the company’s mobile product and home product technology. The self-driving option will come later as the technology matures (and others stumble upon entry). Apple’s car will look fabulous, handle well, accelerate like a demon possessed, be extremely comfortable for five adults, get surprising mileage, but perhaps use new technology for tires and recharging to differentiate itself from other electric vehicles.
Now, about the money. That Apple has enough money to buy, partner, or build an automobile from the ground up is a foregone conclusion. Apple can do this. But can it make a profit? Every automobile manufacturer struggles to make a notoriously thin profit– except the premium end of the spectrum; Lexus, BMW, Audi and beyond. Apple will play in that arena and redefine how much money can be made making a car that’s actually manufactured in China.
Yes. China. Apple’s car will be a world car.