There hasn’t been this much hype about a nonexistent Apple product since Steve Jobs was quoted in his official biography as saying he had finally “cracked” TV.
It was the line that kicked off a thousand blog posts: When is the Apple television coming? What will it be able to do? What will it look like? Analysts like Piper Jaffray’s Gene Munster assured us the Apple television was imminent.
That was over three years ago, and Apple has yet to launch a television or even an updated version of the Apple TV box.
Starting last Friday and through the long weekend, all anyone in the industry could talk about were the various reports that Apple is working on a top-secret car project. The Wall Street Journal said the car will be an Apple-branded electric vehicle that currently resembles a minivan. (A minivan?) Reuters reported Apple is working self-driving technology. The Financial Times reported Apple has a secret research lab filled with automotive experts trying to work on new products for cars. And an Apple employee emailed Business Insider to say the company’s working on something that will “give Tesla a run for its money.”
Within a few days, there was so much smoke about Apple’s secret ambitions for the car that there has to be fire. But as neat as it sounds, there are some who are overly optimistic about Apple’s ability to turn cars into its next major business.
A Cantor Fitzgerald analyst implied that Apple’s car could be the company’s next iPhone. Silicon Valley entrepreneur and investor Keith Rabois thinks Apple will be able to turn cars, which are modestly profitable, into something that’s suddenly and magically able to mint profits.
All of those thoughts are wildly optimistic.
As Business Insider’s Jay Yarow wrote a few years ago, the iPhone is a once-in-a-lifetime megahit. I’ll probably be an old dude or dead before someone comes up with a product that fundamentally changes the way people live and interact with each other.
For all the talk and criticism about Apple “needing” to find its next big thing, Apple has proven that it can do just fine as the iPhone company. The iPhone happens to be wildly profitable and sells in massive quantities, unlike cars that cost tens of thousands of dollars and are subject to a lot of uncontrollable factors like personal taste.
That doesn’t mean Apple is wrong to start experimenting with cars, even if it doesn’t turn into a revolutionary money machine like the iPhone. Instead, like Apple’s other, less profitable products such as the iPad, Mac, and (soon) the Apple Watch, it’s part of building a perfectly curated ecosystem. iOS is already sneaking into cars thanks to CarPlay, and the latest rumours of Apple’s car ambitions could be a greater extension of that.
Plus, the car is the next fertile ground for tech to take over, and with competitors like Google already openly experimenting in the space, it makes sense for Apple to play too. Apple could make its own car, and it sounds like that’s exactly what it’s doing, but it could also bring its innovations to others thanks to CarPlay, which just requires an iPhone and a car that supports it.
It’s all about building out Apple’s most valuable asset, the iPhone and the ecosystem that supports it.