Don't Hold Your Breath Waiting for Rumored Apple Car | Edmunds

Don't Hold Your Breath Waiting for Rumored Apple Car


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If you're in the market for a new car anytime soon, you may be thinking about holding off on that purchase and waiting for the new Apple "iCar" you've been hearing so much about.

Don't.

It typically takes an experienced carmaker with existing staff and manufacturing facilities five to seven years to go from drawing board to showroom with an all-new vehicle. And the "iCar" would be a wholly new enterprise for the consumer electronics behemoth.

Yes, Apple is Apple. It's rich in time, talent and huge wads of cash to burn on such a project. And yes, it's putting together what looks to be an automotive development team. Some are saying that if any company can disrupt those established timetables, it's Apple.

Which may be true, but even the world's richest company cannot make a car appear out of thin air. If there really is an electric Apple Car in the future, it could be a decade away or more.

Apple's Auto Project
In its typical cloak and dagger style, Apple is playing its cars close to the vest, refusing to comment as rumors, speculation and anonymously sourced reports about an Apple EV pile up like a 60-car crash in a Silicon Valley tule fog.

The pileup started earlier this month when The Wall Street Journal published a behind-the-paywall article based on anonymous sources. It claimed that Apple had launched a project code-named "Titan," whose goal was to build an electric car. The intent, the article said, is to challenge maverick EV maker Tesla Motors, Apple's neighbor in Silicon Valley.

The article said Apple's auto team is in the hundreds, a figure later inflated in other reports to 1,000 and then pared back to a more believable 200-person enterprise, with the possibility of growing to a thousand in the next year or so.

Apple, of course, has never built a car. And while Tesla has shown that a newcomer can make a big splash in the automotive world with a new electric car, it has taken the company almost a decade to make its mark. Tesla sold fewer than 35,000 cars last year globally.

Apple has never been a niche company. It goes for market saturation with products such as the ubiquitous iPhone smartphone, iMac computer and iPad tablet. Its most recent product, the Apple Watch, is expected to be a runaway best-seller when it hits the markets later this year.

But watches and phones are a long, long way from automobiles on the complexity scale.

False Trail?
One line of speculation is that Apple is, indeed, developing a car, but only one of them, intended to serve as a test bed for a whole suite of Apple automotive products: software and hardware for Apple-based automotive infotainment and driver assistance systems.

The company has been frustrated by the slow pace of automaker acceptance of its first entry into the connected car field, called Apple CarPlay, and may figure that designing systems around an all-new car would be helpful.

The company also "has been known to do things to throw others off the scent," says automotive electronics specialist Doug Newcomb, who adds that the evidence so far makes him believe Apple "is going all-in on automotive but isn't planning on building a car itself, given the complexity of auto manufacturing."

Instead, Newcomb suggests, Apple's prototype vehicle development "is a play in the autonomous transportation and mobility market." With rival Google developing its own autonomous vehicles and getting into the smartphone-based shared-ride business dominated now by Uber and Lyft, Apple "can't afford to stay on the sidelines," Newcomb says.

Keeping It Real?
Apple certainly is serious about developing automotive products and has the cash and time to develop an automotive arm if it wants to, says journalist Dawn Chimielewski, who covers Apple for the online technology news site Re/code and who previously wrote about Apple and other technology companies for the Los Angeles Times. But the jury's still out on whether it makes sense for a consumer electronics company to get into the car building business. There are legitimate questions around why Apple "would want to get into such a highly regulated business," she says.

She offers an alternative view of Apple's reason for pursuing automotive development: "Apple's not a start-up any longer, and this may be all about retaining talent: giving its people something new and exciting" to work on.

Even if there is no intent to actually build cars, Apple would likely get scores of new automotive-related products from the exercise. It may be a case of the parts being more valuable than the whole.

What We Know
It does appear that Apple has something automotive in the works, and it may well be that at least one Apple-developed electric car is on the way.

Bloomberg business news service reported this week that unnamed Apple insiders have told it that an Apple EV by 2020 is the company's goal. An article in Wired built a case for an Apple car. Time speculated on what an iCar might look like, and Apple-watching site 9to5Mac recently published an exhaustive list of automotive specialists hired by Apple.

So it is clear that for the past few months Apple has quietly been building a team of specialists in automotive and related battery and robotics fields under the leadership of Apple product design vice president Steve Zadesky, a former Ford executive and self-proclaimed car guy.

Most have been cherry-picked from other companies, including Tesla, whose CEO, Elon Musk, has said that Apple was offering some of his top people 60 percent salary hikes and $250,000 signing bonuses to jump ship. Of course, Musk also famously opened Tesla's patents to all comers and has said he welcomes all competition because the introduction of more EVs into the market will hasten his dream of an all-electric automotive world.

Apple also hired the head of Mercedes-Benz's Silicon Valley-based technology research unit, and has picked up internationally known product designer Marc Newson, who has at least one car design in his portfolio — the 021C Ford concept shown at the 1999 Tokyo Auto Show.

A Better EV Battery?
Adding more fuel to the electric car speculation is the fact that battery maker A123 Systems filed suit against Apple earlier this month, claiming the company was poaching its employees in an effort to quickly build an in-house battery development unit. The suit says that Apple lured away at least five A123 employees, including the head of its venture technologies unit, and also was actively recruiting battery experts from Johnson Controls, Panasonic Corp., Samsung Electronics Co. and Toshiba Corp.

Apple's current products use batteries, of course. But each of those companies is big in the electric-car battery space. If Apple really wanted to make big money in automotive, developing a better EV battery with 200 or more miles of range and a relatively low cost would guarantee it a level of success that no mere new car could approach.

By that logic, why build cars and compete with the established giants with just one or two models when you could sell your batteries to all of them?

To Be, or Not To Be
So there it is. Apple has roughly $130 billion in cash and is always looking for new products and markets. Among its rivals, Google is getting into automated cars and car-sharing programs, and Microsoft certainly has a big presence in automotive infotainment. The automotive market is huge: about $2 trillion in annual sales globally last year. Apple surely wants in on that.

But developing a car from the ground up, even if you hire outside vendors to build it, takes time and gobbles cash and manpower. Even for seasoned auto industry professionals it isn't all that easy. Just ask the team that developed the Fisker plug-in hybrid.

A brand-new car company can be created from scratch. Tesla seems to be on its feet now, although it also faces numerous hurdles, including making the leap from niche marketer of $100,000 electric cars to manufacturer of mass-market vehicles that attract people of more modest means. Whether Apple intends to make the leap from small electronics into automobiles remains to be seen.

"They would be a disruption in the industry if they were to begin manufacturing vehicles," says Jessica Caldwell, Edmunds' senior industry analyst.

The company that Steve Jobs built certainly is all about disruption, but the cost and complexity of car making means the purported goal of a new EV by 2020 may be a bit of a reach. Even for Apple.

So if you're in the market for a new car, but you're thinking about holding off on that purchase and waiting for the new Apple "iCar"...

Don't.

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