If Apple was going to make a car, it would be ten times easier to just buy Tesla. But Apple doesn t want a single branded experience, it wants Apple in many, many cars.
— Tim Bajarin, analyst with Creative Strategies, on reports that Apple is working on an electric vehicle. Bajarin tells USA Today it makes more sense that Apple is instead working on owning the car dashboard — by integrating an iPhone-like platform in different makes and models of vehicles.
Last week, the Wall Street Journal reported that hundreds of Apple employees are working on an electric car. The report came after other speculation along the same lines, which Troy Wolverton wrote about. Friday, Julia Love quoted a couple of analysts, including Bajarin, who rejected the idea.
Although Apple extended its iOS software to the car with CarPlay last year, analyst Jan Dawson of Jackdaw Research said much of auto manufacturing is foreign to the company. He finds it unlikely the disciplined firm would veer so far from its strengths.
The parts of the car that Apple is good at are a tiny fraction of the experience, he said.
Other naysayers point to the fact that making cars is a low-margin business.
- This is a business with 5% to 6% margin, says Richard Wallace, director of transportation system analysis for Ann Arbor based Center for Automotive Research, according to USA Today. That s not what Apple and Google see with their products. If I was an Apple or Google shareholder, I d demand they not become an automaker and lower my returns.
- For Apple, the problem isn t paying to build the car, its getting a return on the investment, Erik Gordon, professor at University of Michigan s Ross School of Business, told . Shareholders and analysts will hate the margins and the distraction. They re not even the cool, first player. They are following Tesla and Google.
- Yes, Apple has plenty of money, but the century-old auto industry doesn t seem like a good way to make more of it. Ford, the healthiest US car company, made $835M in net income last quarter, less than 4% of their $34B in sales. Compare that number to Apple s record-breaking $18B profit. Tesla, Apple s supposed rival in the fantasy blogs, pulled in a little less than $1B last quarter, and it lost about 10% of that. There isn t an inkling of an explanation for why and how a superior product designed and built by Apple would bring superior returns. — Jean-Louis Gassée, former Apple, Be and PalmSource executive, blogging on .
Photo: Apple s CarPlay system running in a Ferrari, which USA Today says is the only one of 31 auto manufacturers cited by Apple that s offering the system in new cars. (Sandro Campardo/EPA)
