An Apple Car has been a strong rumor for sometime, but events this week have sent the rumor mill into overdrive. Billionaire investor Carl Icahn has written an open letter to Tim Cook, in which he suggested that Apple would try to break into the electric car industry by the end of the decade.
Carl Icahn pushes Apple Car concept
Before discussing this any further, it is worth pointing out that Icahn has something of a vested interest in this issue. This extremely wealthy man has been very publicly invested in Apple for quite some time, and is incredibly bullish on the hopes of the corporation.
While Icahn’s opinion on Apple is certainly rational, it is also important to understand the context of his comments. If the investor perceives that Apple developing an electric car would be good news for its share price, then he will naturally be predisposed towards encouraging this concept. We should not necessarily accept that this is an inevitability just because Icahn suggests that it is.
However, as has been well documented, the idea of developing an electric vehicle would seem to be a natural concept for Apple. The company has always promoted its green credentials, and already has a lot of the know-how which would be required to develop an electric vehicle. Additionally, the corporation has been recruiting heavily from the market-leading electric vehicle manufacturer Tesla, which has prompted many of the rumors related to the Apple Car.
The concept of the Apple Car was originally catalyzed by a report in the Wall Street Journal which suggested that the process of developing this vehicle was taking place at a secret laboratory in California. It gained further momentum when a company by the name of A123 filed a lawsuit against the Cupertino-based corporation for poaching its employees. A123 is an electric vehicle battery manufacturer.
Apple Car potential
With A123 and Tesla staff both allegedly on the board, it would seem that Apple is well placed to begin the process of developing an Apple Car. And the incentives for the corporation are obvious. Nearly 90 million vehicles were manufactured globally last year, according to figures released by the International Organization of Motor Vehicle Manufactures, and the revenue of the car industry runs into literally trillions of dollars. Oil companies and major car manufacturers are among the largest corporations on the planet, and it is certainly a marketplace that Apple would like to tap into should it be logistically possible.
As Apple has already made promises to the city that it would develop new revenue streams, the rumor of an Apple Car will obviously be of interest to investors. Off the back of a slump in its share price in early 2014, Apple had resolved to develop new revenue streams, and an Apple Car would certainly count as a major source of new income.
However, an Apple Car would certainly be a significant departure for Apple. An Apple Car would obviously necessitate a level of manufacturing which the company simply has not engaged in previously. Although Apple already has an outstanding supply chain in place in order to produce its wide range of consumer electronics products, manufacturing something on the scale of a motor vehicle would be an entirely different undertaking.
Additionally, Apple would not be able to draw on the immense cachet it carries in the electronics niche. With an Apple Car, the corporation would have to convince the notoriously fastidious motoring press that it had produced something of merit. The Apple badge alone would not be able to sell an Apple Car to punters and the critical community.
Apple would also face huge challenges in this area, not least of the number of employees that are required for a production of this scale. It is likely that the production of an Apple Car would necessitate Apple to significantly reorganize its operations internally, at least if it is to produce this mooted vehicle on any sort of industrial scale.
But Apple is in a strong position to take risks should it choose to do so. The company is sitting on an absolutely massive pile of money, and has just enjoyed one of the most successful years of any company in recorded business history. When you’re backed up by these sort of fundamentals, there is always the possibility to roll the dice on a risky new project.
Rumors rumble after Apple acquisition
If there wasn’t already enough speculation about an Apple Car, then the corporation’s acquisition of Coherent Navigation, a GPS company with expertise in mapping and self-driving vehicles, was always likely to further incite these rumors. This company is one of the world leaders in a technology which is referred to as high integrity GPS, which enables geographic positioning data to be accurate to a matter of centimeters.
Although there are many other possible utilizations of this technology, it has naturally been suggested that it could be used in the Apple Car in the foreseeable future. The company which Apple has purchased also has experience working in autonomous navigation and robotics, which has further lead to suggestions that its acquisition would be ideal for the development of an Apple Car. Similarly, Apple has also been investing heavily in fields such as in-car and battery technology, which fits neatly with the suggestion that Apple could eventually develop an electric vehicle.
Apple Car to be accompanied by Apple TV
With Icahn also suggesting that Apple should manufacture UHD televisions in the near future, there could be some exciting products to whet the appetite of Apple fans before the end of this decade.
Naturally, Apple remains extremely tight-lipped on the subject, and perhaps an Apple TV is more feasible than an Apple Car. But don’t write off the possibility of the latter, as Apple is a company which is always full of surprises.