Is Apple building a car?

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Credit: Wei-Te Wong

Early last week, a somewhat bizarre Apple rumor emerged from out of nowhere. Specifically, rumor has it that Apple is seriously investigating the prospect of developing its own branded automobile. The wave of rumors began a few days ago when Business Insider posted a report claiming that Apple was working on an exciting project that was luring back former employees from Tesla.

... We got an unsolicited email from an employee at Apple about "vehicle development" at the company. This person said Tesla employees were "jumping ship" to work at Apple. "Apple's latest project is too exciting to pass up," the person said. "I think it will change the landscape and give Tesla a run for its money."

Initially, it was easy to scoff at the report. Not only does the notion of Apple getting into the car business seem absurd on its face, but it's not as if Apple employees are exactly known for sending unsolicited emails about top secret research initiatives to tech publications. At most, the prevailing attitude was that Apple was simply keen on deepening their exploration into automotive-based software such as CarPlay. The very next day, Bryan Chaffin of Mac Observer chimed in with a report of his own. Citing sources presumably "in-the-know", Chaffin relayed that Apple has been hiring automotive engineers with the requisite expertise needed to develop and engineer full fledged vehicles.

From another source who travels in more rarified circles than yours truly, I also learned that a lot of people at the top in Silicon Valley consider it a given that Apple is working on a car. This is circumstantial, at best, but if you're going to crowd-source wisdom, you could do a lot worse than polling the C-suite. I should add that when I asked one of my sources flat out to put a percentage chance on Apple working on an actual car—rather than some kind of car-related technology—I was told, "80 percent."

Still, at this point, the Apple car rumors were essentially more smoke than fire. Apple has an astonishingly massive R&D budget and who's to say just what they've been looking into. Remember, Apple explores products and files patents for inventions that never see the light of day. But a car? A car is different. A car is far beyond the realm of the traditional consumer electronic product Apple specializes in. Much more than delivering a new product category, a car would represent Apple entering into a completely new industry altogether. Which is to say, it was still hard to see any merit in the notion that Apple would be entering the auto industry of all things.

But this past Friday, the Apple/Car rumors became too numerous to ignore.

First, the Financial Times reported that Apple recently poached Johann Jungwirth away from Mercedes-Benz where he served as president and CEO of the company's Research & Development arm. The Financial Times, which has a stellar record with respect to Apple rumors, added that Apple is shoring up a team already staffed with "experienced managers from its iPhone unit" and that the team is actively "researching automotive products." Next, the venerable Wall Street Journal entered the fray with a report of their own. The Journal has a similarly impressive track record when it comes to Apple rumors and they echoed previous reports about Apple's car aspirations.

The Cupertino, Calif., company has several hundred employees working secretly toward creating an Apple-branded electric vehicle, according to people familiar with the matter. The project, code-named “Titan,” initially is working on the design of a vehicle that resembles a minivan, one of the people said.

The reported size of the team certainly suggests that Apple is taking this research initiative quite seriously.

Mr. Cook approved the car project almost a year ago and assigned veteran product design Vice President Steve Zadesky to lead the group, the people familiar with the matter said. Mr. Zadesky is a former Ford engineer who helped lead the Apple teams that created the iPod and iPhone. Mr. Zadesky was given permission to create a 1,000-person team and poach employees from different parts of the company, one of the people familiar with the matter said. Working from a private location a few miles from Apple’s corporate headquarters in Cupertino, the team is researching different types of robotics, metals and materials consistent with automobile manufacturing, the people said.

Additionally, the Journal relayed that Apple executives have already flown abroad to "meet with contract manufacturers for high-end cars..." Not to be outdone, the Apple/Car rumor bonanza continued over the weekend with Reuters, citing its own sources, reiterating that Apple is working on an electric and perhaps autonomous car.

The Cupertino, California-based maker of phones, computers and, soon, watches is exploring how to make an entire vehicle, not just designing automotive software or individual components, the auto industry source said. "They don't appear to want a lot of help from carmakers," said the source, who declined to be named. Apple is gathering advice on parts and production methods, focusing on electric and connected-car technologies, while studying the potential for automated driving, the source said.

Without question, the notion of an Apple branded automobile arguably represents the strangest and most outrageous Apple rumor we've seen in years, if ever. Having said that, even if we assume that the reports are true, getting a car from the design phase to market is a multi-year process, which is to say don't expect to see an Apple car on the road anytime soon.

As for the practical and logistical considerations which make an Apple branded car seem beyond the realm of reason, the rumor mill notwithstanding, we'll get into those in a subsequent post.

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