Apple car. Vroom vroom!
It seems Apple is determined to make cars. This has been corroborated by the WSJ.
An Apple car terrifies me. I can’t even begin to count the ways.
A car has remarkably low margins. While the sales will be huge, the profits are small and it will majorly mess up their financial statement.
A computer doesn’t kill people. A car does. How will the notion of possibly killing people fit into Apple’s corporate culture.
What possible value-add will Apple have? Can they make a better suspension? Will their leather seats be more comfortable? Will their headlights be brighter? Will their glove box have more compartments? What will Apple possibly do to improve a car?
A car leverages off nearly none of Apple’s existing infrastructure. You aren’t going to shop for one in an Apple store, you aren’t going to go to a genius bar to get it fixed, and it is unlikely to run OS X or IOS. So, where is the synergy?
Jonny Ive is retired now. He sucked at software design, but her was a mechanical genius. But with him gone, how will Apple design the Apple Car Air?
It seems to me that at best, Apple would take over the user experience. They can design a better dashboard. But, frankly, I think it starts and ends there. I can see Apple teaming up with Tesla where the car is a Tesla car with an Apple user experience. That one makes sense.
But I just don’t see Apple being competent at designing ABS systems, and living under a heavily regulated environment where every design decision must go through the lawyers (worrying about federally mandated icons to the required illumination brightness of heater controls.)
I will also put forth that Apple is much more lethargic than even General Motors. GM may take 3 years to make a new car model, but a car has tens of thousands of parts. An iPhone has dozens of parts and takes Apple more than two years now. Apple is a bigger, fatter, and slower bureaucracy than is any car manufacturer.
Oh, and then there are the unions.
Yes, the thought of Apple being in the car business terrifies me.
One more thing…
GM has a total valuation of about $50 Billion
Ford has a valuation of $56 Billion
Volkswagon has a valuation of $72 Billion
Daimler has a valuation of $86 Billion
While Apple could purchase all of these companies with the cash they have, why would they want to?
And, how does becoming even the largest car manufacturer in the world grow Apple’s value by more than 20%?
This just makes no business sense.
Apple would be better off buying Disney.