Why You Can’t Have An Apple Car

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In the past, Apple's product introduction was as secretive as a sieve, and the whole world was shocked by it. From the PowerBook G4 in 2001 to the Apple Watch in 2014, keynote speeches at Apple events were filled with major announcements. But how likely is Tim Cook to announce and showcase the car again at an upcoming Apple event?

This is a rumor that has been circulating for a long time, and it has been greatly promoted recently. Sanford C Bernstein's auto industry expert Ardnt Ellinghorst said that Apple may pay close attention to the industry. According to data from the automotive industry, the largest consumer industry, people are increasingly buying cars because of their technological connectivity. For more than a decade, futurists and other experts have predicted that cars will one day be nothing more than mobile computers.

Sam Livingstone, founder and director of Car Design Research, believes that another factor is self. Given their proficiency in attractive consumer durables, this is the ultimate reward, you just have to imagine that someone in the organization thinks that is the case.

From the appearance, this is a good match. However, in 2014, Ellinghorst began writing rumors about Apple cars, when leaked data about the construction of the Apple car project codenamed Titan first appeared. Seven years have passed since then. What happened—or more precisely, what did not happen?

Ferdinand Dudenhöffer, head of the Duisburg Automotive Research Center in Germany, described it as the "Nessie of the automotive industry." It's like hearing about an Apple car and then seeing it disappear like a Nessie. This has been shown to us in the past 10 years. I don't think it will take 10 years to achieve. In my opinion, they either let service providers build cars for them, or enter the hardware field and produce cars themselves. According to recent industry rumors, if Apple intends to make cars, it may have to forge ahead on its own.

Manufacturing cars is very complicated, and Apple does not yet have the expertise in this area. This is a large part of it. In order to gain a foothold in the market with the help of manufacturers, you must talk sweetly about an industry that is known for protecting its interests.

As a business partner, Apple is not considered the most considerate. As one of Apple's most important business partners, Intel relied on itself after being eliminated, and Steve Jobs was known for rubbing mobile phone network operators in the wrong way while improving the iPhone's market position.

In the final analysis, it comes down to Apple's tenacity and the struggle for survival in the auto industry. If Apple enters the automotive industry, it will become the 800-pound gorilla in the room.

According to Ellinghorst, if Apple enters the market in 2024 or 2025, it may sell between 10,000 and 150,000 cars by 2030. Competition in the automotive industry is fierce, right? In addition, he believes that if Apple wants to join the auto business, they will do it at the high end. Some people are not so sure about this. It is estimated that 15% of the 85 million vehicles worldwide are sold in this high-end market segment. Ellinghorst added that with Apple’s entry, “the industry will become very crowded” and automakers are worried about competitors entering the market.

As automakers worry about losing valuable revenue, the auto industry is very independent and hardly ready to let other companies use car navigation systems or entertainment devices in their vehicles. Livingstone said that the ability to create value will increasingly rely on digital services provided by automobiles. "Existing car brands can usually see this coming to them at a certain speed," he added. He believes that when digital giants such as Apple and Google come up with innovative ideas, it is dangerous for automakers to only develop tedious mechanical parts.

To put it more bluntly, "Who wants to be the Foxconn of the automotive world?" Who wants to be manipulated? When negotiating with suppliers, Apple is known for its steadfastness. One of the largest and most capitalized companies in the world is knocking on your door.

Historically, automakers have outsourced most of the production process to third-party companies, although this practice often occurs where customers never see results: Coventry-based Lear Corporation produces cars for many manufacturers Seats, but the production profit margin is very low and modest, and consumers rarely check the seats before getting in the car.

As far as consumer loyalty is concerned, the Apple-branded entertainment system will be much more than a small label on the seat, because companies such as Epic Games and Spotify are very familiar with it.

Ellinghorst warned that disclosing your car's operating system is a bad idea. Therefore, Apple will completely affect the fate of the entire automotive industry. Therefore, Dudenhöffer believes, "If you give up control of the software system, you are just the hardware deliverer." At this point, he added, "You are kimchi."

Some automakers worry that Apple may increase the price of its in-vehicle operating system, which will put their customers in trouble.

Whether Apple does this or not, Livingstone has additional concerns. In addition, users must register or register to become part of the service product, which is different from their connection with cars. This is what he wants to say.

However, rumors about Apple's entry into the automotive business continue. The Titan Project continues to be the subject of rumors. Apple’s rumored car has many new hardware partners.

According to reports, Canadian automaker Magna is in talks with Apple; Hyundai Motor confirmed earlier this year that it is in talks with the company. As Erlinghorst suggested, Foxconn can develop electric cars with Fisker and put them into production at the end of 2023, thus becoming the Foxconn of the automotive industry.

Foxconn’s involvement may be the first step for Apple to build its own car with one of its oldest manufacturing partners with Foxconn’s help. This expertise gained by Fisker may be passed on to Apple through Foxconn.

As an alternative, considering that Geely’s many brands share the electric vehicle architecture, the company may be attracted by Apple to build its own car series instead of a single nameplate. Geely currently produces Lotus, Volvo, Polaris and other brands

Ellinghorst added: "In principle, it makes sense to have two types of companies." First, it may be the mass market or low-end players claiming that they are not competitors because they are not in the high-end market. Hyundai, Renault or Nissan would be a good choice, as would Nissan or Chinese manufacturers; nonetheless, the latter is a possibility because Apple wants to produce globally. Cars cannot be transported around the world like mobile phones.

Despite all the doubts and previous failures, Ellinghorst believes that it is still possible to cooperate with existing high-end manufacturers such as BMW. Around the mid-'10s, discussions between Apple and BMW allegedly broke down because BMW did not want to give up control of the production process, nor did it want to become a hardware supplier to the iPhone manufacturer.

BMW’s chief financial officer claimed earlier this month that if Apple joined the auto industry, he would “sleep comfortably”. However, this requires a thorough reassessment of the business relationship between the two companies. According to Ellinghorst, an agreement must be reached with Apple, stating: "You are not my Foxconn, you are a true partner. We manufacture together with you and provide you with the right to use all of our technologies.

The latter situation seems unlikely, but not impossible. According to Livingstone, “there is a point of friction: car companies know that if they give up control, they will lose something”, but “they must also know that they cannot deliver on the promises people demand in the field and these famous Software companies can," he added.

Although no car manufacturer is willing to take the risk of signing a cooperation agreement when they are a junior partner, they also know that Apple cars are likely to be a large enough deal that everyone else will not be unrelated to one of them. If the manufacturer does blink and register, then the most famous cool brand in the world.

If a joint product between Apple and cars comes out, both Apple and the auto industry will need to make major changes. It has been determined so far that you cannot square a circle. On the other hand, Apple never ceases to be surprised.