Why We Think Apple Is Building an Apple Car
The “Apple Car” rumor mill is running at full speed again. According to a report in The Wall Street Journal, Apple Inc. (NASDAQ:AAPL) reassigned one of its most important senior executives to a secret program called “Project Titan.” It’s widely believed to be a codename for the Apple Car project.
The company reassigned Bob Mansfield, a close confidant of Steve Jobs, to work on the secret Apple Car project. Other than Jonny Ive, Mansfield was the guy Steve Jobs leaned on for product development. His presence suggests that the company wants to bring the Apple Car to market, meaning it isn’t just a pie-in-the-sky fantasy. The company may actually do this. (Source: “Apple Taps Bob Mansfield to Oversee Car Project,” The Wall Street Journal, July 25, 2016.)
Apple Car Could Be a Game Changer
But we’re still not sure what form the Apple Car will take. Will we see a fully electric, autonomous Apple Car that can compete with Tesla? Or will we see Apple Car software that can be licensed out to existing automakers? No one is sure.
All we know is that Apple has dropped hints, the company has made suggestions, and Apple has hired people who are suspiciously qualified to run an autonomous car program.
There have been hires with specific skills in the field of machine learning and visual learning. Both those skill sets would be very useful for building a self-driving car, but Apple didn’t confirm that’s why those new employees were hired. When asked in interviews, CEO Tim Cook just gives vague, noncommittal answers regarding the reasons for these hires.
There was a report last September that Apple executives upgraded Project Titan to a “committed project” status. That means the company has earmarked resources—staff, money, and lab space—for the construction of an Apple Car (we presume). The same report said that Apple had boosted the number of employees dedicated to the project from 800 to 1,800. (Source: “Apple Targets Electric-Car Shipping Date for 2019,” The Wall Street Journal, September 21, 2015.)
One person who gets asked about the Apple Car a lot is Elon Musk. As the CEO of Tesla Motors Inc (NASDAQ:TSLA), Musk is uniquely placed to gauge the likelihood of an Apple Car. He heads the only notable car company based on the West Coast, which also happens to be Apple’s home turf. All the other American automakers are headquartered in Detroit.
So, if an Apple Car were really on the horizon, Elon Musk would know, right? Think about it: there are very few people with the skills to design electric, autonomous cars. If Apple were hiring 1,000 people qualified for this project, Tesla might notice. The company is trying to hire those same folks to ramp up production of its lower-priced electric vehicles (EVs). Musk said as much at a conference last year.
Musk said the Apple Car is an “open secret” among existing automakers. He specifically cited the labor shortage, saying, “it’s pretty hard to hide something if you hire over a thousand engineers to do it.” (Source: “Tesla Motors CEO Elon Musk Calls Apple’s Electric Car An ‘Open Secret’,” International Business Times, January 12, 2016.)
The enigmatic CEO also threw a few jabs at the Apple Car. He said it’s unlikely that Apple could bring it to market before 2020. By that time, too many competitors would already have flooded the market, leaving no room for Apple to get any traction.
The Bottom Line on the Apple Car
Is he right? Is the Apple Car a doomed endeavor?
I’m not so sure I agree with Musk. Apple has a cult following that is fanatic about everything to do with Apple. They own “iPhones,” “iPads,” “MacBooks,” and “Apple TV,” while using “Apple Pay” and “Apple Music.” If they’re so firmly lodged in the Apple ecosystem, why wouldn’t they consider buying an Apple Car, too?
Consider that there are one billion Apple devices currently active in the world. That’s an immensely large userbase, which Apple can incentivize to switch to its vehicle. It might take enormous amounts of money, but a successful Apple Car isn’t out of the question.