AAPL Apple Inc

Christopher Mims 

On its face, a car seems like a disastrous thing for Apple Inc. to build. Cars are a brutally commodified, terrifically expensive, generally low-margin industry. Entering the car business is like getting into a land war.

But the mounting evidence seems undeniable that Apple is forging ahead anyway, despite lack of confirmation from the company. Clearly, Apple thinks it has the chance to make a unique contribution to a category chockablock with ho-hum user experiences and barely differentiated models. Sort of like the phone industry before Apple crashed the party.

No one knows what the company's internal logic is. But if you spend time examining the industry, it becomes apparent that transportation, more so than cars, is ripe for disruption in a way that could give Apple an opening.

But reordering the status of a device as entrenched as an automobile--tied up as it is with vast public spending, the direct and indirect employment of tens of millions and layers of politics--isn't something that happens overnight.

So here's my first prediction about the Apple car: If Apple does go forward with it, the company is playing a long game, one that could easily span decades.

Technology is set to radically transform everything from who owns automobiles to how they work, and much of this change is driven by the very mobile devices that are Apple's bread and butter. If Apple is serious about maintaining its gargantuan size, it needs to participate in this change, even if it's just at the level of experimenting with how it can integrate its software and hardware into the transportation system of the future. Even if, as Apple has often said about its ventures into television, cars start out as just a "hobby."

Take self-driving cars. There's plenty of evidence, from hiring and patents to an open records request by U.K. newspaper the Guardian, that Apple is at least thinking about building them.

Estimates for when self-driving technology will be ready for widespread adoption range from the wildly optimistic-- five years, according to the head of self-driving technology at Google Inc.--to decades after, perhaps even somewhere beyond 2040.

That's an eternity in technology years. Plenty of time for Apple to work out the advances in its mapping software and countless other components that will be required to power the cars of the future.

In the meantime, Apple has the resources--including enough profit generated every 12 months to buy BMW AG for cash on the barrel--to indulge its executives' very public love of cars. Jony Ive, Apple's chief design officer, told the New Yorker that many car designs leave something to be desired. Apple senior vice president Eddy Cue is on the board of Ferrari, and Ive collaborator Marc Newson has said that car design is currently "at the bottom of a trough."

"I don't think Jony Ive or Tim Cook ponders the possible second or third order effects for the auto industry," says Horace Dediu, a fellow at the Clayton Christensen Institute for Disruptive Innovation, a tech think tank. "They just say 'Cars suck, we can do better, let's do it.' That's the artisan logic: 'We make great things.'"

Given such a long time horizon, it's worth remembering that even if Apple did release a car sooner rather than later--the company's talks with BMW about BMW's production system suggest it is at least possible--whatever it unveils should hardly be judged as the exemplar of the company's efforts. If Apple is serious, there isn't just one Apple car coming--there will be wave after wave, including disjunctions in form and design as jarring as the shift from desktop PCs to mobile devices.

Partly this is because transportation itself is rapidly changing. As revealed by real-estate values in dense urban cores and falling sales of cars among millennials, ours is an age in which the real luxury is being able to not own a car at all.

If Apple really is looking at a 10-or even 20-year time horizon, what place does an Apple car have in a future in which most of us treat transportation as a service, like gas or electricity? In a universe in which Uber Technologies Inc., with its potential fleets of self-driving vehicles, is the public face of transportation and Google the brains, Apple building a luxury vehicle is like some company perfecting the world's best home dynamo right before everyone's homes are connected to the electric grid.

The answer to this riddle requires some imagination, but here goes: In a self-driving, vehicle-on-demand future, why build what we think of as cars at all?

What if the same algorithms that route packets of data around the Internet reveal that the most efficient size of people transporters is some combination of self-driving buses, vans and single or two-person vehicles, with only a smattering of cars thrown in?

This is the vision embodied by, among others, Arcimoto, a startup that will unveil its latest prototype of an all-electric vehicle in October. The projected cost is $11,500, and while it holds only two people, it shows how electric drivetrain technology, and eventually, automated vehicles, can take any form we can imagine, says President Mark Frohnmayer.

"Why do you use a vehicle capable of carrying five to seven people hundreds of miles to drive alone to the grocery store 5 miles down the road?" says Mr. Frohnmayer.

So here's my second prediction about the Apple car: Who says that, in its ultimate form, it will resemble a car at all?

Follow Christopher Mims on Twitter @Mims or write to christopher.mims@wsj.com

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(END) Dow Jones Newswires

August 31, 2015 00:15 ET (04:15 GMT)

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