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Why Apple should not build an iCar

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Like Bigfoot and the Loch Ness Monster, Apple car rumors never seem to die. But unlike the Sasquatch and Nessie, there have at least been verified sightings of Apple testing its self-driving technology, albeit on production vehicles.

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Apple’s car ideas have been floating around since Steve Jobs’ death more than a decade ago, with company executives and board members expressing the revered company founder’s blurred vision of getting into the auto business. But it was his successor and current Apple CEO, Tim Cook, who took over the reins of the storied company and directed the development of the vehicle.

Cook Project Titan in 2014 to build electric vehicles and bring onboard automotive industry veterans such as former Ford executive Doug Field, fellow Ford engineer Steve Zadesky and Mercedes-Benz North America R&D honcho Johann Jungwirth – all of whom have departed.

Cook even flew to Germany in 2015 to meet with BMW executives, and Apple executives traveled to Leipzig to research the automaker’s i3 EV production.

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The iCar rumor mill gained new momentum last week when it was revealed that Apple had hired 31-year Ford veteran Desi Ujkashevic, the latest in a revolving door of auto executives to join the company.

Google Car

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I won’t go into detail about the torturous twists and turns of Project Titan as it has been painstakingly documented by tech sites like AppleInsider. Suffice it to say that despite recruiting – and losing – top automotive talent, Apple still doesn’t make cars. And I believe it would be a huge mistake for Apple to build the car or even have someone else build it for them.

There are clear downsides to being involved in a high-cost, low-margin business involving complex supply chains, the need to support legacy products with decades of parts and service, and the toughest regulation of almost any industry. Contrast this with Apple’s current cash cow business developing and selling products and services that have a highly controlled and controlled supply chain, several years of product life with rapid planned obsolescence, and relatively light regulatory burdens.

With a market cap of nearly $2.5 trillion and a cash bank of more than $200 billion, Apple has the resources to attack the old auto company — and even take on Tesla. The timing is right given the tectonic shifts taking place in the auto industry, with the transition to electrification rewriting the rules of engagement and the growing importance of software games to Apple’s power.

But piles of cash and technological expertise don’t translate into success in automotive. Just ask Google, which tried – and failed – to build its own car a few years ago.

Pictured above, Google’s self-driving Firefly car without a steering wheel or pedals was launched in 2014, and that same year Google prepared a comprehensive list of automotive suppliers including Bosch, Continental, Nvidia and Roush to build 100 cars. vehicles at the Detroit-area facility.

While Google calls Firefly a “test platform” for its self-driving technology, evidence suggests that the company plans to mass-produce the vehicle. I spoke to Samir Salman, CEO of Continental’s North America unit, at the time and he pointed out that the major supplier was working with Google to “provide our services and know-how on the technical side of components and systems,” he said. “We supply brake systems, tires, and body controllers and interior electronics.”

But Waymo, the autonomous vehicle technology subsidiary that Google created in late 2016, discontinued Firefly and went on to buy tens of thousands of Chrysler Pacifica PHEV and Jaguar I-Pace EV minivans. It has since integrated self-driving technology into vehicles and became one of the first companies to operate a fully autonomous ride-sharing service.

In 2018, Apple’s plans to build iCar were reduced to a deal with Volkswagen to turn the automaker’s T6 Transporter van into an autonomous shuttle for employees at the company’s new Silicon Valley campus. But even that plan fell through as VW invested $2.6 billion in Ford-backed Argo AI, with its new ID. The Buzz electric minivan later became a platform for Argo’s self-driving technology.

Given all the pros and cons of Apple’s Project Titan, I’m surprised the company doesn’t see car manufacturing as a quicksand money pit – and would rather focus on providing much-needed software services to the auto industry a la Apple CarPlay.

But Google beat Apple to the punch with its Android Automotive OS, which is gaining traction. Besides, as annoying as Tesla-Stans are, imagine what it’s like dealing with Apple Car fanboys and -girls?

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