Is Apple a $50 Billion Car Company?

Burney Simpson

Recent news reports indicate that Apple (AAPL) is making moves to enter the driverless vehicle industry, though it isn’t clear in what form and how deeply. Still, people pay attention when you have $178 billion in the bank and a market cap exceeding $700 billion.

There’s a logic to Apple getting into driverless. It is the hot tech topic of the moment, and vehicles have become mobile computers, filled with a variety of active safety systems, telematics capabilities, and driver-machine communications.

But jumping into a business as difficult, competitive, and regulated as auto production and marketing is a perfect way to lose a lot of money, hence the joke in our headline that Apple’s $178 billion could soon become $50 billion. (OK, Colbert wouldn’t use it; it’s good enough for Jimmy Fallon).

Reports have it that Cupertino, Calif.-based Apple named Steve Zadesky to lead an off-site skunk works where several hundred staff are developing an electric car in a project called Titan. The Wall Street Journal said it would be an electric and driverless vehicle.

An enterprising reporter searched LinkedIn and found that more than 40 Apple employees used to work at Tesla (TSLA), a company that knows how to create, manufacture, and market a consumer car. And Apple may be offering its staff huge bonuses to join the Titan project.

The story gets hazier. PC Magazine reported Apple is looking at electric vehicles but that Tesla has hired as many as 150 Apple-ites. The driverless angle is bolstered by reports of Apple testing “mysterious” minivans equipped with cameras, disc-shaped antennas, and LIDAR technology around San Francisco. The state DMV confirmed to a local TV station that a Dodge Caravan leased to Apple has this equipment.

That settles it! We’ve got proof.

But wait, there’s more. Reuters interviewed a “senior auto industry” Deep-Throaty type who said Apple is in talks with carmakers and suppliers to learn how to make an electric car that will evolve to be driverless. Then it became connected vehicles. Finally, Forbes quotes some analyst saying Apple could generate $50 billion from Titan.

Enough. There’s a lot of fascinating work going on in this space. Let’s stick to it.