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Where There’s Apple, There’s a Way

Where There’s Apple, There’s a Way
by Roger C. Lanctot on 02-01-2016 at 7:00 am

 With hundreds of billions of dollars overseas and ridiculous profits domestically it is safe to say that Apple can have its way with whatever industry, market or project it sets its mind to. The only sad thing is that money alone can’t cure cancer or bring Middle East peace. Money can, however, help bring a new car company into being, which is precisely the prospect being debated in dueling reports out of Cupertino this week.

One report suggests that Daimler CEO Dieter Zetsche was impressed during a recent visit to Silicon Valley at the progress made by Google and Apple in the work on developing their own cars:

“Daimler CEO says Apple, Google making progress on car” – Welt am Sonntag

A subsequent report, attributed to the Wall Street Journal, noted the rumored imminent departure of so-called ‘Apple Car’ “lead” Steve Zadesky and speculated on the meaning and impact of that departure for Apple’s car building plans – plans which have never been acknowledged by the company.

“Apple Car’ Lead and 16-year Apple Vet, Steve Zadesky, Leaving Company”

I am inclined to attribute greater importance to the Zetsche comments than to the Zadesky departure. It’s clear that Apple can do as it pleases and with such vast resources at its disposal the only question is Apple’s level of motivation.

With millenials showing little interest in cars, maybe cars aren’t quite as exciting an opportunity as they once were – in spite of record 2015 vehicle sales in the U.S. Skeptics repeatedly point to Apple’s profit margin comfort level being misaligned with the leaner margins of the auto industry, but believers expect Apple to overcome rather than accept that state of affairs.

The two stories do raise the question as to what an Apple car will be. What will an Apple car look like? Who or what is it for? Is it a shared vehicle or a service delivery platform? Is it an aspirational sports car suitable only for one percenters? Is it super fast or super safe or super efficient – an EV, of course. It’s a messy question, along the lines of what do you want to be when you grow up. Steve Jobs said:

“Being the richest man in the cemetery doesn’t matter to me … Going to bed at night saying we’ve done something wonderful … that’s what matters to me.”

What would make an Apple car wonderful? Zero emissions and zero fatalities? Nissan, Volvo and others are already well along the way toward addressing those twin value propositions.

Google has multiple points of entry into the auto industry including maps, self-driving algorithms, operating system software and applications. Apple has distinguished itself mainly as a hardware and design company while redefining mobile device interfaces. Apple could make a car or Apple could hire an ODM (like Magna Steyr) to make a car. Or Apple could buy BMW. Seriously.

The question that Apple is no-doubt facing on a daily basis, though, is why.

Google’s vision, in contrast, is clear: driverless shared transportation – made by Google or licensed to existing auto makers. Auto makers may not be eager to license Google technology, preferring to solve the driverless challenge on their own, but licensing an Apple-oriented vision of driving remains unclear.

To create a wonderful car suggests some kind of breakthrough in design, battery storage capacity, business model/ownership, drivability or self-drivability, content delivery or consumption, or overall user experience. Could the wild speculation be true that Faraday Future is an Apple stealth project? Not likely.

Apple can make cars, buses or airplanes if it so chooses. With transportation caught in a vortex of generational disruption it’s just possible that the way forward is too foggy even for Apple. It’s also possible that an environmentally conscious Tim Cook perceives cars as precisely the wrong path forward to connect with an increasingly car-averse target market.

In the end, it doesn’t much matter. Even if Apple has downshifted in its plans to build a car it could still target regional markets outside the U.S. where enthusiasm for cars is still on the rise – places like China, India, and Brazil.

Zetsche most likely has it right, Apple and Google are further along than we all think or thought. Both organizations have siphoned off enough engineering and marketing talent to create a new industry on their own. And Apple, at least, has demonstrated repeatedly its ability to convince consumers to line up for whatever it might have on offer – with the possible exception of smartwatches.

And, speaking of smartwatches, Tim Cook has expressed an interest in controlling cars remotely with his smartwatches. Is that motivation enough to create an Apple car? Time will tell.

More articles from Roger…

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