I've held off writing about Apple and cars. Then my colleague, Rene Ritchie, went and offered some of the first good analysis of Apple Automotive. So, I thought I'd riff just a little. Some of this is based on the pre-show chat Rene, Serenity Caldwell, and our guest, John Gruber enjoyed prior to recording our new podcast, Apple Talk. The rest... well, history does tend to repeat itself.
iPod + rotary dialer = iPhone!
Back at the end of 2006, rumors were swirling fast and furious about Apple and phones. Much of the presumption revolved around an iPod-like product with a keypad (or keyboard). It would be an extension of what Apple had done so successfully in the past.
At the time, there were also three models for selling phones.
- Full priced and unlocked. Nope, Apple wasn't going to do that. There was no appetite for that model, especially not in the U.S.
- The MVNO — mobile virtual network operator — route. Nope, Apple wasn't stupid enough to do that, either. It was a disaster for folks like ESPN, after all.
- The carrier-supported model. Also nope. Wasn't going to happen. Certainly not at the moment in time where carriers were exerting more control over handset vendors, dictating exactly what phone hardware and software should look like, and collecting all service revenues for everything — including ringtones.
In other words, Apple wasn't going to go with any of them. Did that mean there was no phone in Apple's future? No. It did mean that any phone Apple would bring to market would not look like anything anyone expected. Nor, more importantly, would it be sold under any of the current business models.
If Apple hadn't been able to deliver on both, it wouldn't have shipped. But, of course, it did. Apple showed iPhone in January of 2007, arguably the biggest unveiling in the company's history.
The phone, both in hardware and software, was industry changing. And so was the carrier relationship. Apple controlled the entire user experience. Apple controlled so much there wasn't even a physical carrier logo anywhere on iPhone. And Apple owned 100% of the services revenue. iPhone ran iTunes and that meant Apple had as much, if not more, of an ongoing customer relationship — and the credit card numbers that went with it — as the carrier.
In short, Apple essentially became a virtual MVNO. It was a business model so radical that many in the press and analyst community failed to understand it and labeled it an immediate flop. We all know how that turned out.
Snake + Cow = Elephant!
Today, iPhone growth is "slowing", much as iPod was a decade ago. And much like a decade ago, we have rumors of a new "pivot" to a new product, this time a car.
As before, we're stuck in the dark trying to identify the many unknown parts that make up an elephant. Whatever anyone, including myself if I were to predict, will almost certainly be right... and 100% wrong. We're all good at conceptualizing the future based on what we know today. That's why so much of the talk of a car centers around what we know a car to be today… with multitouch, apps, and of course, Siri.
Rene pointed out that an Apple Car will be essentially the next Apple computer. I think he's right. And I'm sure we're probably both wrong. Here's my only "prediction": Whatever, whenever, and if ever, Apple enters the transportation market, I guarantee you it will not look like anything on the market today. It will not look like some weird extrapolation of today's designs or technology. It will not be sold or marketed through any existing transportation model. It almost certainly won't follow Tesla's model, (for one thing, that model simply can't scale the way Apple would want it to).
It will be different. It will be so radical, so unique, and so game changing for that industry that, a few years later, we'll all look back and say, "How utterly predictable that was".
It will be met with skepticism. Apple will be criticized for not being Tesla. Riots will break out at the Spaceship, with angry Wall Street analysts demanding Tim Cook be fired and Elon Musk brought in as new CEO.
The "car" will be a huge success, and redefine an industry.
Doing that will take time. If it exists, as Rene said, this has been a vision for a long time with work done with a level of secrecy that would put the intelligence community to shame. Different teams would be working on different things in a vacuum. Only a very select few would see the big picture.
As with the iPhone, Apple would need to spend a lot of time on education, teaching the world of the revolution it started. And it would take time. A lot of it.
When iPhone was announced, Apple spent January though June teaching the world about iPhone. A car? Well, that's going to take a lot more effort than a phone.
The one about the car...
Okay, I can see you're not satisfied. I'll make a bolder prediction: Apple won't make an electric car — it will make a hybrid by partnering with an existing manufacturer. That will eliminate hurdles, remove unreliable technology (see Tesla), and make it a more mainstream product for more people in more parts of the world.
Instead of a starting-at-$35,000 niche vehicle that'll take years to meet even initial demand (see Telsa), it'll be a mass-market car that once again makes luxury affordable.
But none of that will happen, because it assumes Apple would simply extrapolate on today's technology and business models.
See what I did there? I set myself up to be as wrong as everyone else.
Apple might or might not bring some sort of "car" to market. The only thing that's certain is that no one outside a very small group of people have any clue as to what that may or may not be. Trust me: those who know aren't speaking, and those who are speaking don't know anything.