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On the face of it, Apple getting into the automobile business seems an unlikely departure from the technology giant’s lucrative business of selling computers and consumer electronic devices.
Nonetheless, the Cupertino company has several hundred employees working on an Apple-branded electric vehicle, according to the Wall Street Journal. The initiative, dubbed “Titan,” is exploratory in nature, said one person familiar with the matter, and may never result in Apple producing a car.
Several auto industry observers say the idea is not as outrageous as it might seem.
“The industry is ripe for disruption right now,” said Doug Newcomb, a long-time automotive industry journalist and president of the C3 Group, which hosts the Connected Car Conference. “Car makers have been doing the same thing, pretty much, for the last 100 years — selling a chassis with an engine. Cars have not changed that dramatically.”
And Apple has a history of shaking up entrenched industries, from the music business transformed by the iPod portable music player to the telecommunications world revolutionized by the iPhone. And it certainly has the cash to burn — $178 billion in cash as of the end of December — to invest in such blue-sky projects.
The company has made tentative moves into the automotive space with Car Play, an in-dash system that connects to Apple’s iPhone and takes advantage of the smartphone’s features, including driving directions and Siri’s voice control. The stereo will be offered in a range of new vehicles made by more than 30 automakers.
It’s the sort of experimentation Apple did in 2005, when the company partnered with Motorola and Cingular Wireless on a phone loaded with its iTunes software (the Rokr) before creating its own device, the iPhone. The partnership lent Apple insight into the workings of the industry.
Increasingly, cars are becoming computers on wheels. Semiconductors are pervasive in modern vehicles — controlling systems under the hood, operating facets of the drive train, offering enhanced safety features such as collision warnings and parking assists and delivering in-vehicle entertainment.
Thilo Koslowski, leader of Gartner’s automotive practice, said the industry that long ago mastered the mechanical side of transportation is becoming more and more dependent upon advances that come from software.
“I see this as an evolution that’s happening,” Kozlowski said. “We’re entering an era of the software-defined car. It will actually elevate the importance of companies that really understand software well. That’s where Apple comes in.”
Auto executives seem to appreciate that their future hinges on closer ties with the technology world. No fewer than 10 automakers exhibited at the International Consumer Electronics Show in Las Vegas, a trade show that typically showcases televisions and gadgets.
Ford CEO Mark Fields used the trade show to talk about the rise of semi-autonomous vehicles, which help people stay in their lanes or automatically adjust speeds based on traffic conditions, and the future of mobility.
Google, meanwhile, has been talking with major automakers about partnerships to build self-driving cars.
Behind the scenes, Apple has been plotting a possible turn behind the wheel.
Last year, it hired noted industrial designer Marc Newson, who created a concept car for Ford. It also lured about 50 employees who previously worked at Tesla, according to a report in Business Insider.
A company spokesman declined to comment on reports of an Apple car. Though Chief Executive Tim Cook hinted, in a September television interview with Charlie Rose, that the company has many riddles wrapped in mysteries inside enigmas.
“There are products that we’re working on that no one knows about,” Chief Executive Tim Cook told Rose. “That haven’t been rumored about yet.”
This article originally appeared on Recode.net.
