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Why an Apple Car Makes Sense

If rumors of an iCar prove true, the timing could be perfect for Apple to enter the automotive market.

February 20, 2015
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By now you've probably heard plenty of speculation surrounding the reports that Apple plans to build an iCar, and perhaps some pretty funny parodies of the idea.

News broke last week that Apple has assembled a 1,000-person team and poached high-profile talent from car companies to work on a top-secret self-driving electric vehicle project carrying the code name "Titan." (Nissan has got to love that.) It's also been reported that Apple has met with automotive suppliers in Europe, mirroring Google's recent move to line up Detroit-area companies to help it build its self-driving cars.

Nextcar Bug art As with anything Apple-related, there's been an outpouring of press reports, with most suggesting that Apple's automotive end-game is to build a self-driving car to compete with Google and Uber in the growing ride-hailing trade. Reactions have been split between yeas and nays on Apple's rumored first venture outside of consumer electronics, with the company's acolytes cheering the prospect of owning an iCar and critics warning that auto manufacturing could be a cash-burning dead-end for the company.

The idea of an iCar is nothing new. It's well documented that Apple co-founder, CEO, and tech icon Steve Jobs had dreams of the company building a car someday. And the C-suite at One Infinite Loop is stacked with automotive enthusiasts, including Eddy Cue, senior VP of Internet Software and Services and a member of Ferrari's board of directors, and Phil Schiller, SVP of Worldwide Marketing, whose Twitter bio lists "Apple, Sports, Cars, Science, and Rock And Roll" among his favorite things. A recent New Yorker profile of Jony Ive examined the long-time Apple design guru's automobile obsession, and mentioned his close friendship with celebrated industrial designer and fellow car buff Marc Newson, who joined Apple last year and previously created a concept car for Ford.

Perfect Timing for an Apple Auto
But while the iCar has been a rumor for several years, the timing is perfect for Apple to enter the auto market for several reasons and, more importantly, gain a foothold in future transportation technology. For one, new cars are quickly becoming more like computers, with processing power and connectivity as important as creature comforts and horsepower to many buyers.

Added to this is that traditional automakers have been struggling with in-car tech, and have recently moved to turn their infotainment interfaces over to Apple CarPlay and Google's Android Auto. And brand loyalty, which was once a staple of auto sales, has been dropping, particularly among the coveted Millennial car buyers.

Another factor at play is that the car ownership model is predicted to undergo dramatic changes due to a perfect storm of increasing urbanization, a drop in young people obtaining drivers licenses, and the growth of car- and ride-sharing services. Google and Uber are already making big bets on autonomous cars becoming robo-taxis to allow urban dwellers to get around without ever owning a car.

Opinions For Google and Apple, a lucrative business model in a shrinking personal vehicle market could be robo-taxi services that harvest data on a user's travel habits and shopping preferences, possibly in lieu of charging a fare. Talk about Apple extending its walled garden. And while Apple is still making record profits selling portable devices, critics have called for the company to diversify. And Apple can't simply sit on the sidelines as its chief rival Google makes investments in the future of transportation.

Sure, it's a stretch going from making portable devices to making cars— with all the complexity, resources, government regulation, and long product lead times involved—but Apple has shown that it has a knack for disrupting existing business models. Let's just hope that the Apple iCar isn't a minivan, as has been reported and photographed around Silicon Valley. That's surely not what Steve Jobs had in mind.

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About Doug Newcomb

Columnist

Doug Newcomb

Doug Newcomb is a recognized expert on the subject of car technology within the auto industry and among the automotive and general media, and a frequent speaker at automotive and consumer electronics industry events. Doug began his career in 1988 at the car stereo trade publication Mobile Electronics, before serving as editor of the leading consumer magazines covering the topic, Car Audio and Electronics and Car Stereo Review/Mobile Entertainment/Road & Track Road Gear, from 1989 to 2005. In 2005 Doug started his own company, Newcomb Communications & Consulting, to provide content to such outlets as Road & Track, Popular Mechanics, MSN Autos, SEMA News, and many others. In 2008, he published his first book, Car Audio for Dummies (Wiley). He is also a contributor to Wired's Autopia, MSN Autos, and numerous other outlets.

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