Is The Apple Car Rumor Overblown?

The Apple car saga has seemed to plateau to where it’s a highly accepted rumor. However, no one really knows what’s ahead. Will Apple manufacture electric cars? It’s unconfirmed. Will they just purchase Tesla Motors? The answer is still, maybe, someday in the future. However, in a recent town hall with shareholders, Apple CEO Tim Cook was asked directly about a possible Apple Electric Car.

According to Bloomberg, during an annual shareholders meeting, Apple CEO Tim Cook was told by a shareholder, “Quite frankly, I’d like to see you guys buy Tesla.” That comment reportedly generated both laughter and applause. However, the response from Cook was a bit of a sidestep and plug for their infotainment system.

Cook responded to the shareholder by saying, “We don’t really have a relationship with Tesla. I’d love Tesla to pick up CarPlay. We now have every major auto brand committing to use CarPlay.” But, it wasn’t just one investor. Another shareholder brought up Tesla. According to Bloomberg, the shareholder said, “There’s something else I’m in love with that’s not Apple — that every time I see it just blows my mind — and that’s when I open my garage and see my Model S. Am I insane to imagine something might happen here?” Again, Cook sidestepped the question and again mentioned Carplay. Cook replied, “We’re very focused on CarPlay.” At least for the moment, Apple is being coy on the Apple Car and Tesla Motors subject.

For all the articles that posit that Apple will either buy Tesla or get into the car business, others don’t share that view. Rather it’s often wondered just why Apple would get into the car business. After all, they are used to making large profits on their products. This would be in sharp contrast to the automotive realm.

A report by BGR indicates that 10 percent profit on a new vehicle is considered quite good. BMW is put in the 8 to 9 percent range. The typical profit enjoyed by Apple products is in the 35 to 39 percent range. Jean-Louis Gassée, a former Apple executive, wrote in his personal blog that Apple likely is just working on projects that make it seem like they are building a car. His post, dated February 15th reads in part, “Johann Jungwirth, the Mercedes Benz R&D executive that Apple hired last September, worked on infotainment systems which makes him a natural for Apple’s work on CarPlay. The mystery vans are most likely part of the company’s maps product.” For the time being, it appears that for all of the hype that Apple is building a car, there is a lot of doubt that they’re entering the market.