Wanted: Experienced Auto Industry Execs For Apple Inc. (AAPL)

apple inc (AAPL) Project Titan

Apple Inc. is reportedly aiming at introducing electric cars of its own, but before that it needs to answer two crucial questions. What role does it exactly see itself playing and what is the amount of auto industry know-how it needs. Apple recently had a reset within its stealth auto operation, and the build or buy question could be a piece of just that, says a report from Recode.

Apple has been on a hiring spree, looking for people with good electric car experience. Several reports claim that the firm held talks with several luxury carmakers as early as a year ago. And again, a Wednesday report in FT said that one of the car makers with whom Apple has been having discussions is British carmaker – McLaren. Despite official denial by McLaren that Apple is considering acquiring it, FT wrote that they stand by their story.

Apple Inc. AAPL, Project Titan

Making cars, is very different than iPhone, iPod

Giving a look at how Apple entered new areas in the past can be helpful in guessing Apple’s car strategy. For the iPod (music) and the iPhone (cellular), the firm hired a bunch of people with good knowledge in both the cases, and also partnered more extensively at the start, says Recode.

Apple Inc. did not have its own OS or chips or desktop software with the original iPod, and thus, relied on others to provide each of those key components. A company called PortalPlayer offered much of that first iPod’s guts while Toshiba served as inspiration for having a smaller-sized hard drive, which was a key a differentiator. Apple also played smart by locking up supply so that rivals had no option, but to use larger drives meant for notebook computers.

In the phone, Apple’s partnership with Motorola was short-lived, and led to a disappointing product the ROKR. But, Apple got some valuable knowledge from it. The iPhone maker made big leaps with its decision of moving from PCs into music and phones, but getting into the car business is a lot more complex.

Qualities that an Apple partner must have

Software plays an important role in defining the car experience, but apart from software there are lot many things involved in building a car. It is true that even cellphones have to pass through drop-tests and FCC radiation standards, but it’s a lot more serious with cars for the reason that the car-related issues have implications that are very real and often dangerous.

The company that Apple Inc. finally zeroes on in terms of buying or working with, should know how to manufacture cars, it should have ideas and skills for the future, and – the toughest of all – should be a company that is willing to work with Apple as it has a bad reputation when it comes to being a great partner, says Recode

Even though McLaren may not meet Apple’s all manufacturing needs, it is an expert in the car engines, something that Apple doesn’t have.

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Adam Green is an experienced writer and fintech enthusiast. He he worked with LearnBonds.com since 2019 and covers a range of areas including: personal finance, savings, bonds and taxes.


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