Apple is reportedly branching out from the manufacture of iPhones, computers and smartwatches, and is looking at ways of making a self-driving electric car.
According to a Reuters report, citing an unnamed “automotive source”, Apple is talking to experts at carmakers and automotive suppliers.
“They don’t appear to want a lot of help from carmakers,” said the source. Instead, Apple apparently wants to get advice on parts and production methods, preferring to gather outside expertise rather than enter full-blown partnerships.
Bloomberg reported that the Cupertino giant has “put a few hundred employees to work on a secretive project to develop an electric automobile”, although the project is clearly secret no more.
Johann Jungwirth, chief executive of Mercedes-Benz Research and Development (North America), was among one of Apple’s high-profile recruits from the car industry – pointed out Reuters – joining the Cupertino giant in September 2014.
“It makes a ton of sense,” Gene Munster, an analyst with Piper Jaffray, told Bloomberg on Apple’s reported push into car making. “If you would’ve said 10 years ago, ‘Apple is going to be in the car business,’ I think people would’ve said you’re crazy — because it would’ve been crazy — and today it’s a much different company that’s able to tackle these massive addressable markets.”
Indeed, Apple is sitting on a cash pile of $180 billion, so financing a push into the manufacture of a self-driving and ‘connected car’ would not be an obstacle.
Benedict Evans, partner at VC firm Andreessen Horowitz, is less convinced. “I think that taking over the dashboard makes more sense for Apple than doing the whole car,” he tweeted, adding that the car industry has a very different production process to mobile devices. “There’s no Foxconn for cars, nor a Qualcomm. If Apple does cars I suspect we’ll know plenty more well in advance.”
Google, too, has developed a prototype self-driving vehicle, while startup rival Tesla Motors has produced an electric sports car. Other car manufacturing brands are ploughing R&D into “autonomous driving”, including Volvo and Ford.
In addition to building a car, said the Reuters source, money can be made from the software operating system of a self-driving vehicle, as well as related services, “such as high-definition mapping, car-sharing and electric car recharging services”.
Bloomberg draws attention to car industry experience and expertise that already exists among Apple management. Luca Maestri, Apple’s chief financial officer, spent 20 years at General Motors (in areas of finance and operation), while Eddy Cue, senior vice president of internet software, is a car enthusiast and on the board of Ferrari.
Steve Zadesky, vice president of iPhone product design, who is leading Apple’s car effort says Bloomberg, spent time working at Ford earlier in his career.
Marc Newson, an industrial designer who joined Apple’s secretive design team last year, was involved in a high-profile concept car for Ford in 1999.