The news Friday that Apple has up to 1,000 employees actively working on some kind of car — a kind of "electric minivan," not just software in the dashboard — set off a nuclear bomb of speculation, jokes and lukewarm takes. At one extreme came the Detroit-centric reaction, the "oh, this carbuilding business is sooo hard and costly" view, which felt dated when it was deployed against Preston Tucker. From the left coast came the Silicon Valley excitement at impending disruption and the potential profits, epitomized by investor Jason Calacanis predicting Apple will buy Tesla for $75 billion in 18 months.
Those extremes have a fingertip grip in reality; car building is hard, which is why Tesla was the first successful U.S. automaker start-up since the Dodge Brothers in the 1920s, and won't be profitable until 2020. And Silicon Valley already boasts a growing automotive industry focused on the software needed for most every component, from dashboard dining apps to self-driving vehicles. But if Apple decides to build a car, it will be because cars are turning into the kind of products Apple excels at.
The real clue to Apple's goals arrived in a different article this weekend — a long New Yorker magazine profile of Jonathan Ive, Apple's senior vice president of design and the man who's given Apple its signature look in everything from iPod Nanos to Apple Stores. (The long tables in those stores are mirrors of the ones Ive uses in the design studio.) Like many designers, Ive cops to being a bit of a car nut; he owns an Aston Martin DB4 and rides in a Bentley Mulsanne for commuting. And in the profile, Ive admits to critiquing current car design with recent hire Mark Newson (who has a Ford concept in his portfolio) and finding it wanting:
He and Newson are car guys, and they feel disappointed with most modern cars; each summer, they attend the Goodwood Festival of Speed, where vintage sports cars are exhibited and raced in the South of England. “There are some shocking cars on the road,” Ive said. “One person’s car is another person’s scenery.” To his right was a silver sedan with a jutting lower lip. Ive said, quietly, “For example.” As the disgraced car fell behind, I asked Ive to critique its design: “It is baffling, isn’t it? It’s just nothing, isn’t it? It’s just insipid.” He declined to name the model, muttering, “I don’t know, I don’t want to offend.” (Toyota Echo.)
Ive shouldn't have been so shy; there's nothing that redeeming about the Echo, and much of mainstream modern car design is either too conservative by half or a few good ideas surrounded by several bad ones. No designer in the auto industry wields the power that Ive does at Apple, and for a reason; it only takes one poorly received design to ring up hundreds of millions of dollars in losses and take a designer's career down a notch. Elon Musk may be the great disruptor, but he's had the Tesla Model S and the upcoming Model 3 designed to look like other luxury cars rather than spaceships to attract as many customers as possible.
Apple's strengths lie in taking designs by Ive's team, building them at high quality and low cost and selling them at a premium. Where it succeeds best is integrating the software that manages how customers use those products to keep them satisfied — all of which sounds exactly like the goals any auto executive would tattoo on their soul. Looking at what was on the road and not just wishing, but knowing, one could do better has been the motivation for every automotive innovator from Henry Leland to John DeLorean.
So what could Apple do that an automaker couldn't? Battery tech is at a dead-end at the moment, and there's no breakthroughs on the horizon aside from slightly lower cost. BMW has the best electric-car chassis at the moment with the carbon-fiber i3 and i8 — and electric cars require a custom chassis to maximize range — although aluminum can also work, but that knowledge is widespread. Plus, automotive software is a separate subculture for a good reason: It has to be far more robust than typical consumer grade work. We're now at the point where a "blue screen of death" at the right moment in a vehicle can actually be deadly, and that fear will slow the rollout of true self-driving vehicles for the next decade.
The answer may be the one that Apple doesn't want to highlight most: Chinese manufacturing. After decades of false starts, the first Chinese-built car aimed at everyday American buyers — a Volvo — will arrive this year. China has scores of automakers itching to export to the United States, but the Chinese government has been wary of allowing such plans before the home-designed products were world-class, which they're generally not. A Chery, Geely or Great Wall vehicle imported from China would have to overcome a wariness by American consumers due to its manufacturing source that an Apple iCar would not. If Apple built in China, it could beat the industry on design, technology and software while still selling the product at Apple-like margins.
It's not like these are new ideas to automakers. The car at the top of this article was the Infiniti Emerg-E concept, an electric plug-in hybrid from 2012. Since then, most major luxury automakers — BMW, Audi, Porsche and Infiniti to name a few — have begun working on Tesla-like luxury electric models, with far greater ranges, far better performance and more striking designs than the city-only EVs they focus on today. Apple could be just noodling around, trying to embrace a transportation ecosystem, or even keeping its employees from getting poached by Tesla. And Apple isn't infallible; see the Apple TV for exhibit A.
But when Apple has an idea, it tends to stick with it until it succeeds. If you doubt for a second that Apple could peel off a few billion dollars and upset the auto industry without blinking, there's a Walkman for you.