Apple iCar Likely Years Away, Predict Analysts
While Apple has not confirmed (nor denied) that it's developing an electric car, there is a lot of evidence to suggest they're working on just such a program, one dubbed 'Project Titan.' Space has been rented not far from Apple's Cupertino, California headquarters. Employees with strong automotive and large format battery expertise have been put on the payroll. And pretty much every knowledgeable observer who tracks the goings and comings of the world's wealthiest company are in agreement: there's something mobile and electric coming down the pike, probably around the 2020 time frame.
Publicly, the world's legacy carmakers claim to (a) welcome the competition, or (b) not be worried about. Privately, it's rumored, they are very concerned. After all, if GM executives, led by then co-chairman Bob Lutz, was worried about a tiny Silicon Valley upstart called Tesla, enough so to launch an unprecedented R&D effort to develop what became the Chevrolet Volt, what do you think they're whispering about in their boardrooms when a tech giant with the size and marketing clout of Apple decides to go after what Morgan Stanley's Adam Jonas calls the $10 TRILLION mobility market? According to Forbes magazine's Neil Winton writing in his most recent article, "Carmakers Can Relax, A Bit, Apple Car Threat Looks Years Away, Apple is reputed to be more valuable than to world's top seven carmakers combined. It's also got an estimated $178 billion in cash on hand.
So, the question is: Why should Detroit and Nagoya and Stuttgart 'relax'?
Analysts with the investment research company Sanford C. Bernstein recently issued a report that looks at the challenges confronting an Apple iCar, which they say will have to be both electric and autonomous: each a daunting technological challenge and the latter a huge legal minefield. Quoting the report:
We believe any Apple car would need to be all electric and autonomous. We would assume product variety would be limited to allow simplicity in manufacturing and distribution – but believe Apple would aim for a premium priced position – consistent with its other products, which typically are priced at 200 per cent premiums to mainstream offerings and would aim to offer a ‘unique’ consumer experience that would be compelling,
The authors of the Bernstein report speculate that Apple would most likely outsource production, possibly taking advantage of China's looming auto manufacturing overcapacity. Its key mobile device manufacturing partner, Foxconn, has already stated it plans to build an electric car. With its average 25,000 parts, producing a typical gasoline-powered car is an organizational challenge it's taken the Fords and Toyotas of the world decades to master. While an electric car will likely have a smaller part count, it will not be an easy road for Apple to travel trying coordinate global production on this scale.
Still, if anyone can do it - and look what relatively tiny Tesla has managed to accomplish - Apple certainly can. If nothing else, the Steinberg report concludes that Apple's assumed entrance into the mobility marketplace is "...probably going to trigger an R&D race. Carmakers are probably going to move much faster now to try to develop connectivity and potentially autonomous technology to make sure they at least understand it can be competitive with whatever gets put forward by Apple."
Whatever Apple is doing, it's likely to not only stampede traditional carmakers into accelerating their development schedules, but it's also set off an avalanche of whimsical Apple iCar designs as illustrated below, sketched by various independent designers, perhaps with the hope in mind of attracting Apple's attention.
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