Apple Car Has an Apple Problem
By: Aravind Sanjeev
Tags: Tech, Tesla, Apple, Technology, Electric Car

Apple Car Has an Apple Problem

Rumors on Apple working on its own electric car have surfaced once again. But Apple being Apple has its own pros and cons for such a development. Aravind Sanjeev Follow Dec 24, 2020 · 5 min read

Creative depiction of Apple’s logo

Read the original post in humaneer.org

Ever since 2014, rumors have surfaced about Apple’s electric car project. It is learned to be codenamed “Project Titan” and is yet to receive any official acknowledgment about its existence from Apple. The prospects in an Apple-branded car have made the tech community curious. This curiosity had its peaks during rumors and leaks from time to time. But the reported layoffs from the project last year also subsidized the user interests.

However, the recent report from Reuters suggests that Apple is still working on the project. This has revamped the interest and curiosity of the tech community again. Reuters’ report also suggests that Apple plans to start car production by 2024. But pandemic related issues might push the production to early 2025. The backbone of the project is reportedly a new battery technology that can reduce its weight while providing high energy density.

This renewed interest from Apple is likely because of Tesla’s recent success. 2020 has been so far the best year for the electric car company. It has sold over 300K units, attained high-profit margins, and its stock went up over 600%.

Elon Musk recently revealed that he tried to sell Tesla to Apple somewhere in 2014. At the time Tesla was having a hard time getting through the manufacturing process and developing a sustainable business model. However, Tim Cook refused to meet him and the idea died. This is probably because Apple likes to be a self-made company. All its products are a first of its kind and want to lead the rest of the industry in its footpath. Apple rather aims for a more direct competition to a company like Tesla with its gust of inventiveness.

When Project Titan was launched in 2014, Tesla was a struggling electric car company with little promises. But in 2020, it is as successful as an electric car company can be. The name is synonymous with electric vehicles and it is way ahead of the curve compared to any other EV manufacturers out there. Tesla has its charging station built all across the US and Europe which is something Apple needs to work on.

Elon has reportedly also offered Apple to use Tesla’s charging stations, but it isn’t in Apple’s nature to depend on another company. They’re more likely to make their own or partner with a third-party to develop them.

When it comes to developing totally new technologies, the way Apple works comes with its own limitations. Apple is a company that likes to be different and set its own standards. When Apple removed the headphone jack, Google and Samsung followed. Now Apple removed the charger and Samsung is deleting the posts where it made fun of Apple for doing that.

This attitude will prove to be a challenge for Apple as EV is not something they’re going to invent. An iPhone is something they invented and it is a first of its kind. EV is pushed forward by Tesla, sometimes almost unilaterally and it is now the default brand for EV standards.

Apple is also a slow-patient learner that only improves its devices in small incremental steps. If you look at their products and compare year-on-year, the improvements are little. But the time has run out for Apple to employ the same tactic on an EV because a multitude of companies is already ahead.

It took Tesla 17 years to become a sustainable business model. The supply chain required to build an EV is extremely complex and can take years to optimize and perfect. These are things that can only be appropriated after you’re already in the market.

But if Apple is going to launch an EV, people are not going to just look for an Apple-branded car. They will look for something like an iPhone. They will be looking for groundbreaking innovation. Apple car must be a complete product that is the top of the line in all realms of EV. Because that is how Apple brands its company to be and it will have to live up to its word.

On the other hand, some inside sources from Apple said that the company wants the EV to be in an affordable range. It is understandable why Apple’s EV will need to be affordable. It probably has to be cheaper than Tesla to put on the real competition. But on all other products, Apple is known to be the luxury type. Its phone, tablet, laptop, and even headphone cost a dime. It is branded to be premium products.

But if Apple actually wants to take on the already established EV companies, it will also have to be cheaper. That’s is a look in the reverse direction as far as Apple’s branding tactics are concerned. The profit margins in the EV industry are also pretty low compared to Apple’s average profit margin in all the industries it works in.

Even in the long-term, companies like Tesla aspire to bring the cost of EV down. Elon Musk repeatedly asserted that he wants EV to cost only as much like a regular car. But Apple who is a premium branded company will have to keep its stakes high. But unlike a premium product in markets like phones, tablets, or laptops, a premium car isn’t going to be affordable by most of the population. It will have to go against its own branding style to keep up with the market.

But regardless of all this, Apple has a promising hook for its Apple car story. It has over 2 billion active devices across the globe today and it is mostly because of one thing, Apple’s ecosystem.

When the original iPhone was launched, Apple used iTunes as a way to lure iPod users to the new iPhone. As far as the users were concerned, they now only have to carry a phone while also being able to use it as an iPod.

They used the same techniques to get users to buy iPad, Mac, Apple Watch, Apple Homepod, Apple TV, etc. Because of mutually integrated software solutions, these products look easy and promising against one another. This is the power of the ecosystem and Apple with its 2 billion active devices has a strong one. This could be Apple’s strongest pitch. But how they exactly plan to integrate their car into the Apple ecosystem remains to be seen.

Apple also has enormous amounts of money and resources to pull this project off. While companies like Tesla started from scratch and developed from the bottom, Apple can afford to have multiple Tesla-level failures and still walk away scot-free. This gives Apple a lot of room for experimentation and go through repeated cycles of trial and error.

Plus, Apple is exceptionally good at marketing. Apple fanboys are literally a cult. They know how to market their products much better than any of their competition. This is also something that’s going to set them apart from the rest of the gang. But, do treat this with caution. As much as Apple’s optics are a recipe for success, it is can also be a recipe for disaster if things don’t go smoothly.

Like what you read? visit humaneer.org/blog to see all the latest posts.