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Opinion: why Apple won’t build an 'iCar'
As Apple hires a top Chrysler engineer, Paul Horrell explains why an electric iCar is unlikely
This week, the Wall Street Journal reported that Apple has recruited former Fiat-Chrysler quality chief Doug Betts, reigniting rumours the Silicon Valley giant is plotting an electric car. Back in February, Top Gear’s Paul Horrell explained why he thinks an ‘iCar’ won’t happen. Here’s what he said:
So the normally well-informed and rumour-averse Wall Street Journal says Apple has hired hundreds of automotive engineers to work on something codenamed ‘Project Titan’. It’s a car.
There have been photos of adapted Chrysler Voyagers in New York and San Francisco, with boxes of equipment and sensors on the roof. As you’d expect, really. If Apple is working on a car, it’s a highly autonomous one.The internet lit up with the fevered assertion that obviously Apple is shortly to smash down the elderly, sclerotic, lumbering giants of the auto industry. But I fear the internet is saying this because the internet hasn’t given the matter a moment’s thought.
First off, let me say I like Apple products. They’re beautifully built and designed, making them satisfying and easy to use. Given the proportion of my week I spend pounding an Apple computer, those qualities handsomely justify the firm’s non-basement prices.
There are ample openings for those Apple characteristics to be applied to our world of motors. Cars are getting increasingly complex and user-hostile. Many of them are ugly, or shonkily assembled from cheapskate bits. Lots of people would throw their cash at an iAlternative, something delightfully designed, obsessively well-made and marvellously easy to use.
They’d pay a premium, as they do for other Apple stuff. And, by the way, many of them couldn’t give a fig about on-the-limit handing or epic performance or other Top Gear desiderata.
In particular, Apple is supremely good at designing the interfaces where you meet the product and the product meets the outside world. That talent of course was made most diamond-clear on the day they launched the first iPhone. It gives a putative Apple car a huge open goal. Because almost without exception the entertainment interfaces and connectivity setups in today’s cars absolutely (to use a Jobs word) suck.
Touch screens are jerky and unresponsive. Graphics are hideous. Connection to your phone randomly fails. Voice activation is dismally ineffective. Menus are diabolically counter-intuitive. And so on. It’s not getting any better either, because as soon as a carmaker solves a problem on one level (visual design and haptics are OK in the German brands now), they get more ambitious with the apps and fail there instead.
But as far as we know, Apple’s automotive project isn’t just about the infotainment, or about the driving automation. Apple has been hiring car engineers from all specialisms. Besides, that’s always been its culture and inclination: it has always hated its designs getting adulterated with others. Macs run the Mac OS, they integrate through the iCloud with iPhones and iPods, and Apple sells the apps and content through its iTunes and App Stores.
On that form, Apple would doubt want to control large tracts of the related businesses around its car - the ecosystem of service and integrated mobility and energy (Petrol? Electricity? Hydrogen? Who knows?). That’s the sort of end-to-end user experience on which the company was built.
This, I would speculate, is the scope of Project Titan. No small laundry list. Let’s take them in turn.
First, designing, engineering and manufacturing the basic car. Normally when I see start-ups, I say this is near-impossible. But you know what, with Apple’s cash pile, it probably isn’t. Apple currently has a mind-boggling £118 billion (yes, that’s billion with a ‘b’) sitting in bank accounts and paper investments.
Apple famously doesn’t want to give this money back to shareholders because if it did it would be taxed. My heart bleeds. I’m not a tax lawyer but maybe sinking a few billions into the notoriously capital-hungry car business would help give the money a home.
Whatever, £118bn will easily get you a car, and a mass-volume factory to build it. In fact I’d say ‘just’ £10-15bn would probably do it. Yes, £15bn is a colossal hurdle for anyone else, but not for those guys.
In fact, a sizeable portion of the required investment would be in the manufacturing, and it’s reported Apple people have flown to Austria to see Magna Steyr, the company that has manufactured the first-gen X3 and current Mini Countryman for BMW, the Voyager for Chrysler and G-class for Mercedes. Getting others to do the building would be standard Apple practice. Most of its stuff except the big computers is subcontracted to locally owned and run plants in China.
Apple could probably build a pretty satisfactory car. It’d have to get the right engineering structure in place, and employ the right people. They seem to be taking their time, and they will be free of unhelpful heritage. Doing ‘just another car’ isn’t that hard. Especially if team Titan engage the right systems suppliers: there are companies out there that can supply powertrains and suspensions and driver-assist systems off the shelf.
But Apple probably doesn’t want to do it off-the shelf. It doesn’t want to calibrate its ambition towards the conventional. Apple likes to be disruptive. And in the car business, disruptive means risky. Disruptive cars tend - whether done by new entrants or even experienced companies - to be late and over-budget and lagging in quality.
Look at Tesla. Losing money again. And beyond the electric drivetrain and big screen, the Model S sensibly uses known engineering in its aluminium body and air suspension. The ‘falcon-door’ Model X is two years late, with admitted quality problems. The BMW i project has been a vast investment which BMW has only been able to cover by writing it down across its plans to electrify its mainstream cars.
Secondly, what about the ‘user experience’? Tesla and BMW i both show the enormous effort Apple would need to apply if it wanted to go beyond just building cars, and stretch itself further into customers’ lives.
Tesla wanted to sell its cars directly, but came up against the enormously powerful motor trade lobby. BMW i has launched a portfolio of services and apps under the ‘360 degrees Electric’ banner. They cover charging, parking, integrated transport, and loaner vehicles. Most have got off to stuttering, patchy starts. Not BMW’s fault, because they involve so many external actors. But the difficulties reflect badly on BMW’s brand. Apple wouldn’t like that one bit.
So although Apple could afford to do a car, why should it? Apple likes doing very high-margin goods and services over which it can exert enormous control. And it likes to dominate the markets it enters.
Apple might well do a lot of research and early engineering on a car, but that doesn’t mean it won’t drop the idea before it hits the market. It’s done that with other new ventures before. I suspect this one will drop too.
Why? Because the car business is difficult, complex, sprawling and littered with legislation, lobbies and entrenched rivals. And its profit margins are tiny. BMW has done its i cars because it sees new mobility as the only way it can survive. Tesla launched itself because its founders have an evangelical mission: to end the grip of petroleum. Google posits its self-driving car as another project for the common good: to reduce the vast casualty toll especially in countries where mass motorisation is new.
But Apple isn’t an evangelist company any more. It looks that way, but what it really loves is profit. Why would it bother?