Is Apple really going to build a car?

No, the proper noun that fills in the blank this time is not Google, but Apple.

Rumors suggesting that Apple is developing an electric and possibly driverless iCar to rival Google and Tesla are proliferating like jackrabbits on a fertility drug. As evidence, media reports have cited Apple supposedly poaching Tesla employees and Apple also being sued by battery-maker A123 Systems for allegedly stealing car battery experts. The Wall Street Journal on  Feb. 13 cited unidentified sources in reporting that Apple’s top secret electric car efforts exist under the code name "Titan” and that there are "several hundred” Apple employees working on the project. Apple hasn't commented on the report.

We’ve heard some of these musings before. In 2012, speaking at Fast Company’s Innovation Uncensored event former Apple board member and J.Crew CEO Mickey Drexler revealed that before he died Apple co-founder Steve Jobs dreamed of designing an iCar.

OK, but sentimentality aside why would Apple want to do this?  Elon Musk’s Tesla Motors, which is considered to be a big success by everyone who doesn’t care about financial reporting, sold 35,000 cars last year but the company saw its bottom line shrink from a loss of $74.0M to an even larger loss of $294.0M despite an increase in revenues from $2.0B to $3.2B. What’s more, the auto industry runs on a 5% or 6% margin (at best) so it requires bigtime volume to make a go of it.

Admittedly, automobiles seem to be mesmerizing Silicon Valley these days. People’s exhibit number one: Google has created a working prototype of a self-driving car. Using lasers, cameras, radar and GPS to decipher the world around it--all of which sit in a module directly on the roof--a prototype driverless car has been built and will soon undergo formal road testing. The car, according to Google, will comply fully with California DMV rules during testing. Still, Google has stated all along that when the car is ready for market it does not intend to produce the car itself. Rather, it is looking to partner with auto manufacturers to bring self-driving cars to market within the next five years.

(element14.com)