Apple needs an upfront, friendly, capable, experienced manufacturing partner on the order of Intel. Why? Two words. Apple Car. Automobiles are a mature industry, but change is coming. Robots already own manufacturing. It’s time for Apple to be more public about a car manufacturing partnership. Even Tesla partnered.
The problem Apple has run into with Apple Car is the company’s secretive culture and nature. With Intel, Apple couldn’t keep that secret for long and it needed to reassure customers that Macs would be better than ever with Intel Inside. That transition away from IBM and Freescale went smoothly but publicly.
Apple Car needs a similar partner with an experienced automobile manufacturer; preferably one that matches the company’s already premium stature. Word on the streets indicated the company’s talks with BMW and Mercedes-Benz were not fruitful, partly because both manufacturers saw Apple as a future competitor on their premium brand turf, and definitely because they have their own plans for electric, semi-autonomous automobiles.
The ever present word on the streets also says Google has a partner. Chrysler. That makes sense. Chrysler is one major manufacturer with almost no electric expertise but they know how to manufacture automobiles, so the rumor says Google’s first foray into manufacturing will produce a few self-driving mini-vans based on the new Chrysler Pacifica. Chrysler needs money and both electric and self-driving expertise, and Google needs a manufacturing partner.
Chrysler’s CEO Sergio Marchionne to AutoMag:
My approach is to be completely open to technology. I think the next paradigm of this business is a paradigm that involves the cooperation for technology with the disruptors. Google is one. Apple is another, even Uber. It’s all about access to the complete information on what people do in the car. That’s when the consumer has time on hand and the business case blossoms.
That’s a problem for Apple. The company doesn’t like to share. That Google went with a struggling brand like Chrysler while Apple pursued talks with prosperous brands from Germany is also telling. For Apple, quality and control are important aspects of any product. A deal with Chrysler might have given Apple more control, but premium quality isn’t the former’s schtick.
Who Is Left?
General Motors and Ford appear to be going their own way, too. It’s possible that Apple could partner with a premium manufacturer in China, but cars from China are not perceived the same as electronic devices from China. I see a couple of options, neither plausible for a company which demands control the way Apple does.
First, buy Tesla. The company is on a roll, has a great brand name, and is affordable for Apple. Elon Musk might be an issue but money talks and that’s what Apple has plenty of these days (apparently cash can replace vision). Or, second, Volkswagen. Granted, VW is not a premiere brand in the same league as BMW or Mercedes despite the Phaeton wannabe, but VW has Audi and Porsche and a few other esoteric brands which have all the panache Apple could swallow.
Otherwise, Apple could do what Tesla did but won’t. Tesla started small with the proof-of-concept Tesla Roadster which gave the company a sporty design and some manufacturing experience and allowed the company to fly under the public radar for a few years as something of an oddity or automotive anomaly. Apple won’t have that luxury unless it hits a home run on the first pitch, or partners with someone who can help that happen. That’s why Apple needs a partner.