The rumors are swirling, the pundits are pontificating, the media is grabbing up industry experts for opinion pieces and meanwhile the only one not saying a word about Apple's purported move into the car making business is Apple.
Well, to be fair, neither Google nor Tesla have said much regarding reports the iPhone and Mac maker is quietly establishing a car manufacturing business and gearing to have a car in production by 2020, as Tech Times reported this week. And that may come down to simply being stunned and or frightened or huddling in conference rooms to figure out how to stay ahead of Apple and maybe praying Apple reaches out in a partnership move.
Whichever it may be, it's likely both Google and Tesla are also silently admitting car making could be yet one more smart move for the Cupertino powerhouse. That's because the overall consensus seems to be that Apple has all the needed business ingredients to make such a move. Here's just a short list:
- It's already got plenty, plenty of cash to spend on such a technology strategy.
- It's already accused of poaching some of the top car engineering talent from big name competitors.
- It has proven it must keep diversifying and advancing as a technology company and not just a computer and smartphone maker.
- It's already making huge moves in healthcare, an industry closer to automotive than anything else it's ever been involved with, given the regulatory and federal oversight in both healthcare and car manufacturing.
- Apple likely sees the sea change ahead with car ownership and car use, with ridesharing services taking storm the past few years and the slow but clear success Tesla is having with electric cars.
Yet even those who hope the rumors are true don't have much of an answer when it comes to the real reason why, as there is no denying Apple clearly cares about high margins and, well, car making is far from a high margin industry.
That's one reason a few industry watchers believe Apple's automotive foray will not be as much on building cars but driving a whole new industry around car sharing, and why others see Apple's interest in cars as a way to make the biggest 'i' device yet, whereas the car would be tomorrow's iPhone or iPad or iAuto, serving as just one huge smartphone computing device and system that also helps you get places.
Maybe the Apple car strategy is a simple case of the 'cart before the horse' as Apple is already building what will likely be a top-tier and industry standard when it comes to in-car technology. If they build the ultimate computing system for the car, why then not just build the car but not look to be a car brand name.
So while all signs point to the rumors likely being true, some tenured car leaders are scratching their heads in bewilderment over the media reports. Two former General Motor executives are repeatedly stating in press reports it's a matter of no or little return on investment and Apple facing the real potential of losing a lot of money, tons of money. Like as much bounty they have at the ready to make such a move.
"I think somebody is kind of trying to cough up a hairball here," says Dan Akerson, a retired chief executive officer of General Motors Co. "If I were an Apple shareholder, I wouldn't be very happy. I would be highly suspect of the long-term prospect of getting into a low-margin, heavy-manufacturing" business.
The slim profit margin is enough reason Apple should avoid the car business.
"Why would (Apple) exit (tech) to go into a business where in good times you may have a 5 percent or 6 percent margin and in bad times you hemorrhage money," says former GM Vice Chairman Bob Lutz .
But, as they say, money isn't everything. There's the glory, the going for the gold, the potential of losing the cherished crown of being most innovative and most creative that could have Apple eyeing cars.
"If you're Apple, your greatest fear is missing out on what's next," says Alan Deutschman, who wrote The Second Coming of Steve Jobs. "With all the talk swirling around Google and even Uber (getting into autonomous cars), it's clear that the public can see the appeal of high-tech cars, and Apple wants a part of that."
