The Rumored Apple Car Is Bad News for Elon

Hey, everyone. As we creep into a year of lockdown, I am buoyed by the vaccine and terrified by the variants. Triple masks, anyone?

The Plain View

“Where should we go next?” asked Steve Jobs. It was almost exactly 10 years ago, and Apple’s CEO wasn’t asking for advice, but rather opening up the subject of Apple’s future, one that would unfold without him. I was meeting him informally, alongside fellow reporter John Markoff, with the unspoken understanding that this might be our last conversation, and indeed it was. Jobs died later that year. This week was his birthday; he would have been 66.Markoff suggested speech technology. I noted that Apple had not really made its mark on living room entertainment. Jobs had another idea. People kept asking him, he said, if Apple was going to design a car. “If I were 10 years younger and healthier,” he said, “I’d do it.”
A decade later, Apple devices can talk back to you, and the company is producing Hollywood movies. And now credible sources are reporting that Apple is serious about making that car. A few years ago, the company reportedly pulled back on an effort to develop an autonomous vehicle, but multiple sources are now reporting that Apple has put the project back in gear. We hear that key executive John Giannandrea (Google’s former AI chief) is in charge, that Apple may partner with Hyundai to manufacture it, and that the company is shopping for lidar sensors to help the cars drive themselves.Some observers are cool on the idea, noting that the profit margins in the auto industry are puny compared with those in the software world. But Apple is a 2 trillion-dollar company whose main product, the iPhone, is approaching market saturation. It needs to move into a business that will keep pushing its stock price up. The Wall Street valuation of Tesla, Apple’s natural competitor in cars, is now around $700 billion. Where else could Apple get a jump like that? One analyst opined that if Apple got 1 percent of the auto market, it would reap $50 billion in revenues. That’s an interesting way to look at it, because when Jobs announced the iPhone in 2007, he made the low-balling remark that if the new device got a single percent of the market, it would sell 10 million units. That was many billions of units ago.