Although Apple Inc. (NASDAQ:AAPL) doesn’t comment on rumors as a policy, it is increasingly becoming difficult for the company to distance itself from claims that it is developing a car. It is highly likely that the Apple Car or iCar, if those turns out to be the names, would be an automated vehicle with an electric engine. However, does Apple stand a chance of success in car business?
Despite the fact that Apple Inc. (NASDAQ:AAPL) has transformed its business model multiple times (or at least diversified its revenue sources) over the years, the company lacks automotive experience. That is a problem. Manufacturing cars is nothing like manufacturing iPhones and iPads.
Apple has cash hoard of about $200 billion. With that, the company has the resources to absorb shocks in virtually any business that it decides to go into, but facts are stubborn.
Car manufacturing is hard
The iPhones and iPads that Apple makes are mostly treated carefully when in use or sit in the comfort of the pockets or a cashing. But cars have to withstand extreme conditions –rough roads with potholes, freezing temperatures and severe deserve heat. Apple doesn’t have an experience in manufacturing products capable of working flawlessly in extreme environments.
Of course, the company can decide to learn the ropes to become a reliable carmaker. However, the complex engineering works required in car design means that it will take years before Apple can make any meaningful progress in designing a reliable car to sell or even show off.
Production complexities
Despite its vast resources, Apple Inc. (NASDAQ:AAPL) cannot get a car factory up and running in a month or two. On the minimum, it requires a year to put in place a vehicle manufacturing plant worth its salt. If you combine that with a lengthy design process, it looks like the earliest Apple can have a reliable vehicle on the road is after 2025.
Car production is full of pressures
Apple Inc. (NASDAQ:AAPL) will counter far stricter regulations in the car manufacturing than it has seen in smartphone business.Additionally, for the most part, Apple sells an experience and reputation – mostly reputation. However, there is no guarantee that Apple will maintain its good reputation forever, and without it, selling a car could prove more difficult than selling handsets.
Sources: Forbes
