14 DAY TRIAL // With roughly 200 people working on its secret car project, and many more to come according to recent industry chatter, Apple is looking at years of research and development before it can even consider competing with the likes of Tesla and GM.
Bloomberg reports that “Apple Inc. [...] is pushing its team to begin production of an electric vehicle as early as 2020,” citing people with knowledge of the secret project, which apparently isn’t so secret anymore.
Nay-sayers abound
There’s a hot debate going on whether or not Apple can pull it off. Fans of the Cupertino giant are confident that if anyone in Silicon Valley can build a car, it’s Apple before anyone else.
Auto industry people are not so convinced. They know the hardships of building a car from scratch first hand, and they don’t see Apple achieving their goal any time soon, if ever.
Dennis Virag, president of Automotive Consulting Group, tells Bloomberg that even for an experienced automaker the time frame for new developments like these is typically five to seven years. Those starting anew are looking at even more than that, he said.
“If you’re starting from scratch, you’re probably talking more like 10 years. A car is a very complex technological machine.”
Apple always does its homework
Not even Apple has a flawless track record of product releases, but the company hasn’t released a flop in more than a decade. Whenever Apple decides to enter a market, it seems to do so when it is absolutely certain it can disrupt that market. The line of iDevices is clear evidence of that, and the Apple Watch promises to be a runaway hit as well.
The general misconception is that Apple, being a computer company at heart, should have no place playing with the big boys in the automotive industry. That’s until you look at their cash hoard ($178 billion / €156 billion on last count), and the willingness to spend where the world needs changing.
Cars have low profit margins, but Apple could fix that too
Financial analysts have weighed in with their own take on the matter, saying that the car industry isn’t exactly known for high profit margins, something that may conflict with Apple’s views, and implicitly the views of its shareholders.
At the same time, not all phones and tablet computers have high profit margins, yet Apple somehow squeezes plentifully from both. An electric Apple Car with intuitive controls and a novelty aura would probably convince many to spend premium, making the iCar as profitable as anything else in its lineup.