Over the past week, rumors have persisted that Apple is preparing to enter the auto manufacturing business. This speculation was first fueled by the appearance of Chrysler minivans dotting the country that are registered to Apple, Inc. The Wall Street Journal took things a bit further, reporting that Apple has been hiring former, high-level auto industry employees, and has roughly 100 people working on an electric vehicle under the codename “Titan.”
Needless to say, many folks in the auto industry are rightly skeptical of a new entry from Apple. Breaking into the auto market is not exactly easy, and building a fully functional, crash tested, and consumer-ready electric vehicle complete with a nationwide dealership/service/charging network is not an easy task; just ask Tesla Motors.
One former auto executive that is making his voice heard loud is in clear is Dan Akerson. Akerson helmed General Motors from September 1, 2010 until January 14, 2014. Akerson, speaking with Bloomberg via telephone seemed puzzled by the mere thought of Apple producing a vehicle for the masses.
Former GM CEO Dan Akerson (Source: Commonwealth Club/flickr)
“I think somebody is kind of trying to cough up a hairball here,” said Akerson. “If I were an Apple shareholder, I wouldn’t be very happy. I would be highly suspect of the long-term prospect of getting into a low-margin, heavy-manufacturing.”
Getting back to the whole issue of government regulations and producing a vehicle that meets stringent safety requirements, Akerson added, “A lot of people who don’t ever operate in it don’t understand and have a tendency to underestimate.”
Tesla Motors is an outlier in that a Tony Stark-esque CEO leads the company, and relishes the thought of taking on the old guard. Elon Musk has made it his mission to ensure that EVs send internal combustion engine-powered vehicles to an early grave. Musk is definitely making a very strong case with vehicles like the Model S P85D, but it has to prove its ability to sell to the masses with the upcoming $35,000 Model E.
But one has to ask, what exactly is in it for Apple? Why would Apple want to produce its own vehicles? It’s one thing to sell consumers tablets and smartphones that range from $300 to $1,000 and computers that range in price from $900 to $4,000, but stepping up to build cars is a whole new ball game that is fraught with obstacles.
If you’re looking for one company on the planet that has expert supply chain experience, plenty of engineering talent, and has more than enough money to tackle the automotive industry head on, it’s Apple. But I buy more into the notion that Apple is looking to plant its flag on your vehicle’s dashboard and take over telematics services. Why would Apple want to produce its own, limited line of vehicles when it could have its technology and services embedded in millions of vehicles across the globe from a multitude of auto manufacturers? That plays more into Apple’s modus operandi.
Akerson seems to agree with that sentiment, adding, “I would’ve signed it over [to Apple]. I’d have turned over the infotainment and interconnectivity of every GM car.”