Retired General Motors CEO Dan Akerson said that Apple should not venture into the automobile industry, adding that it would be a better move for the company to develop automobile electronics instead.
Reports surfaced earlier this week that Apple is developing its very own electric vehicle, news which shook the entire car industry.
"I think somebody is kind of trying to cough up a hairball here," said Akerson during a telephone interview. He added that if he was a shareholder of Apple, he wouldn't be very happy if the reports turn out to be true because of the doubtful long-term prospects of the company entering a business known to be a low-margin, heavy-manufacturing one.
"A lot of people who don't ever operate in it don't understand and have a tendency to underestimate," Akerson said regarding the automobile industry, which is harder than most people perceive partly due to stringent safety and regulatory requirements.
"They'd better think carefully if they want to get into the hard-core manufacturing," Akerson warned Apple. "We take steel, raw steel, and turn it into car. They have no idea what they're getting into if they get into that."
There seems to be more potential in Apple forming partnerships with car makers for the production of dedicated operating systems and entertainment devices for vehicles.
Akerson admitted that during his time as the CEO of GM, he would have agreed to sign over all the interconnectivity and infotainment of all the company's cars to Apple if the company was willing to forge such a partnership.
Apple spokesman Tom Neumayr, however, declined to issue a comment regarding the matter. In fact, Apple has not yet discussed its reported development of an electric vehicle.
Akerson, who retired as GM's CEO last year, pushed the company to quickly implement new technologies in its vehicles and to work on its electric cars.
However, Akerson said that he would take the margins of iPhones over cars. Apple's gross margin for the previous quarter was 39.9 percent and that of GM's was only 14 percent.
Gross margin is the percentage of the sales prices left after the subtraction of the cost of production of the devices or cars.
Apple has been surging since the launch of the iPhone 6 and iPhone 6 Plus smartphones into the market in September of last year, improving the market value of the company to become the worldwide leader at $745 billion.
Apple's secretive project for an electric car, which has been code named Titan, is for a vehicle that looks like a minivan, a source reported last week. However, the project may not necessarily lead to Apple actually launching an electric car.
