Slices of Apple

Matthew Guy
by Matthew Guy

In social situations, general convention holds that, unless you want to incite a riot, certain topics remain off-limits: politics, religion, and — increasingly — one’s choice of technology. Vocal cords have been inflamed and dinners have been ripped asunder with invectives hurled at Android or epithets tossed towards Apple.

Bob Lutz is on record opining that Apple’s efforts in developing a car are “going to be a gigantic money pit” — and he’s probably right.

Here’s the thing though: Apple has a history of figuring out how to make big profits with products traditionally considered to be low margin. Add this to the fact that Apple is rich enough to spend huge bucks on developing a car, only to drop it all and walk away if they’re unhappy with the project.

Think they won’t?

Years ago, rumours abounded of an HDTV from Apple. Not the hockey puck of a device we know as Apple TV today, but an actual flat screen you could hang on your wall. After months of development, Apple scrapped the whole thing because it couldn’t come up with a product differentiated enough from its competitors that’d justify a sticker price high enough to generate Apple’s legendary profit margins.

Now, it’s a big leap from a flat-screen TV to a four-wheeled iCar that’ll ply public roads. However, and this is critical to understand, Apple’s high-margin/differentiated-product corporate goals will remain, no matter if we’re talking about a phone or a car.

This is not to say that Apple is in the business of throwing money away. Far from it, in fact. But they are in the business of disrupting conventional markets. The telephone’s been around for a hundred years. Apple showed up in 2007, transforming the phone into a social and career hub, to the point many people need the glass and metal iDevices surgically removed from their hands upon death.

The past is rife with examples of Traditional Big Guns underestimating on-the-horizon competition. The newcomers appear, offer a fresh take to a thirsty public, and leave the Big Guns scrambling in their wake. Apple has a history of entering a market, making its competitors look old-fashioned, and proceeding to take a huge piece of the pie while leaving the traditional competitors scrambling for the remaining crumbs.

How many readers are viewing this on a PalmPilot? BlackBerry? Compaq Presario? Exactly.

Look at Tesla. Elon Musk, who has a background in facilitating electronic payments and being a Bond villain, just raised in excess of $300,000,000 virtually overnight in (admittedly refundable) down payments on a car the public hasn’t even sat in yet, let alone driven. Cook & Co. undoubtedly watched this activity very closely, likely seeing it as an affirmation they should plow on, for now, with Project Titan.

Apple fanatics tend to form lineups long enough to challenge the ones seen during Siberian rationing, so its logical to think any vehicle bearing the Apple logo will grab formidable market share.

I don’t know if Apple will ever build a car. What I do know is if they do, you’ll probably pay a premium if you want one in Rose Gold … and you better not talk about it at the dinner table.

[Image: John Mitchell/Flickr]

Matthew Guy
Matthew Guy

Matthew buys, sells, fixes, & races cars. As a human index of auto & auction knowledge, he is fond of making money and offering loud opinions.

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  • Thegamper Thegamper on Apr 15, 2016

    Personally I think it is a great idea. Not because I think Apple would make spectacular cars, but because I think there are plenty of people willing to pay spectacular money to own/drive one. Look at what Elon Musk has done with Tesla, I have to believe if he can start a car company with incredible fanfare and built in customer base, so can Apple, probably with better results to be honest. We all know that companies like Mercedes, BMW, etc. can sell on brand alone for a premium. As such, it is a license to print money. An Apple car would be much the same in my opinion. It would be a real threat to Mercedes, BMW, Audi...all the companies that that cater to high end shoppers who only care about image really (not to say that's every Merc, BMW, and Audi customer...but a lot of them). If an Apple car turns more heads and starts more conversations than BMW, well.....unless you are a die hard enthusiast for German cars, you probably go for an Apple car if you are buying for image like most luxury car shoppers. Would love to see it happen, even though personally, I would only buy a Google Nexus car on principle :)

  • Fred Fred on Apr 17, 2016

    If I have to register my Apple car with Itunes I will never have one.

  • CanadaCraig You can just imagine how quickly the tires are going to wear out on a 5,800 lbs AWD 2024 Dodge Charger.
  • Luke42 I tried FSD for a month in December 2022 on my Model Y and wasn’t impressed.The building-blocks were amazing but sum of the all of those amazing parts was about as useful as Honda Sensing in terms of reducing the driver’s workload.I have a list of fixes I need to see in Autopilot before I blow another $200 renting FSD. But I will try it for free for a month.I would love it if FSD v12 lived up to the hype and my mind were changed. But I have no reason to believe I might be wrong at this point, based on the reviews I’ve read so far. [shrug]. I’m sure I’ll have more to say about it once I get to test it.
  • FormerFF We bought three new and one used car last year, so we won't be visiting any showrooms this year unless a meteor hits one of them. Sorry to hear that Mini has terminated the manual transmission, a Mini could be a fun car to drive with a stick.It appears that 2025 is going to see a significant decrease in the number of models that can be had with a stick. The used car we bought is a Mk 7 GTI with a six speed manual, and my younger daughter and I are enjoying it quite a lot. We'll be hanging on to it for many years.
  • Oberkanone Where is the value here? Magna is assembling the vehicles. The IP is not novel. Just buy the IP at bankruptcy stage for next to nothing.
  • Jalop1991 what, no Turbo trim?
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