Apple and Tesla expert says Apple is getting into the car business

Is Apple going to build a car, partner on a car, or offer software and services for cars? You’ve heard all of those theories — and heard them retracted. Now what?

“I think it’s important to make a distinction between when Apple works on something compared to when it sees the light of day,” says Gene Munster, co-founder and managing partner of Loup Ventures and a keen watcher of Apple and its automotive doppelganger, Tesla. “It’s very clear Apple has ambitions to build a car. It was not clear six months ago.”

Our conversation was booked as rumors flew that Hyundai or Kia were about to announce a deal to build cars with Apple. By the time the interview took place a few days later, those automakers had stated they were not partners with Apple. And so the see-saw has been going, unequaled since the hype around a once-expected Apple television.

Why would Apple want to get into the car business, an industry known for chewing through capital, often returning slim and uneven profits and generally hemmed in by federal regulations on one side and state dealer franchise laws on the other? “The addressable market,” says Munster without missing a beat. “It’s orders of magnitude larger than anything Apple’s gone after before. What keeps tech companies awake at night is growth.”

Munster suspects that Apple would easily hurt traditional automakers, facing its only really interesting battle in its own backyard. “I think Apple is the biggest competitive risk that Tesla [will] face.” The two have been the object of merger speculation, but Munster thinks a merger could never work as each is unrelenting when it comes to control of any product with their name on it.

So we wait to see when Apple might become the biggest challenge to an industry beset by existential challenges. “We don’t have a signed deal with any automaker, but that does not change this direction that Apple is going.”

Credit: C Net




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