Will Apple (NASDAQ:AAPL) really make a car? And if so, will it "disrupt" the established automakers in the same way that Apple's iPhone shook up the cellphone landscape?
At this point, only Apple executives know for sure whether an Apple car is in the cards -- and it's possible that they haven't yet decided. It's even possible that the car is intended for an upcoming Apple car service, not for sale to consumers directly.
If it enters the car-making business, Apple has what it takes to be a very big deal
When news of the potential Apple car first broke, I said that if Apple did decide to enter the auto business, it would be a fearsome competitor to the incumbent giant automakers.
Apple's huge war chest ($178 billion in cash on hand as of the end of 2014), design chops, ability to lure top talent, and powerhouse global brand and distribution network give it the potential to quickly become a competitor on a scale far beyond what Tesla Motors has so far managed.
Automakers like Ford and GM don't fear Tesla, at least not yet. They're intrigued by Tesla, they're watching Tesla carefully, they're making preparations to jump into the electric-car market in a bigger way if Tesla continues to succeed -- but they don't fear Tesla.
But I suspected that the auto giants would feel very different about the possibility of competition with Apple -- and it has since become clear that they do.
Global automakers are hustling to show that they "get" technology, too
Executives at GM and Ford haven't said much about the possibility of an Apple car yet, but other auto leaders have made their opinions known over the last week. Fiat Chrysler CEO Sergio Marchionne told BBC News this past week that Apple's moves toward the car business could certainly be "disruptive" -- and that he felt that Apple and Google (NASDAQ:GOOG) (NASDAQ:GOOGL), which is known to be developing a self-driving car, were "incredibly serious" about moving into the automotive space.
And Dieter Zetsche, CEO of Mercedes-Benz parent Daimler (NASDAQOTH: DDAIF), said that while he saw it as "positive" that the tech giants were eyeing the car business, he also noted that "it's clear that new technologies can have a destructive quality," according to The New York Times. He also emphasized, as many other industry figures have, that designing and mass-producing modern cars is a much more complicated and expensive endeavor than most industry outsiders realize. (And we should note that Daimler is hardly a technological slouch: It already has a car on the market with some self-driving features.)
Like Fiat Chrysler and Daimler, Ford and GM have both taken pains to show that they "get it" when it comes to technology. GM's presentations at this past week's auto show in Geneva, have focused heavily on the latest incarnation of OnStar, which now brings 4G connectivity to many GM vehicles. GM is also no slouch with advanced technology: Its "Super Cruise" system will bring limited self-driving capabilities to some 2017 Cadillac models.
Ford executives have recently played up the company's penchant for "innovation,", launching a new (and reportedly much-improved) version of its in-car SYNC system and emphasizing a much greater use of lightweight materials in vehicle construction, such as the aluminum body panels on its new 2015 F-150 pickup. (There was a lot of "innovation" involved in developing the systems and tooling needed to build that new pickup, by the way. Not all advanced technology looks like a cellphone. Mass-producing vehicles to globally competitive levels of quality is much harder than making cellphones -- and much more expensive, as Tesla has been discovering recently.) And Ford has waded deeply into the possibilities of "big data," hiring a slew of software engineers and laying the groundwork for what executives refer to as Ford's transformation into a provider of "personal mobility."
Apple could be a competitor to fear, but it may have other plans
To answer the question posed in the headline, all automakers should take the potential competitive threat posed by Apple (and Google) very, very seriously. And it appears that most of them are -- and they may not be quite as ripe for "disruption" as some tech enthusiasts would like to think.
Of course, it's not yet clear exactly what kind of threat the Silicon Valley giants will present to the established automakers -- or if they'll ever really present a threat at all.
Google is hoping to have its self-driving cars ready for prime time by 2020 or so. But many experts think that it may take much longer for autonomous-car technology (and the legal framework around it) to come to the fore. Apple's ambitions may also hinge on self-driving technology -- but they may also be limited to a car service that is aimed more at Uber than at Ford or GM, at least initially.
And it's possible that both tech giants will instead choose to focus on in-car systems that play well with Apple's iOS and Google's Android -- a focus that Detroit might actually welcome.
It's clear that the pace of innovation in the auto business is accelerating rapidly. But while it's important to take Apple and Google very seriously, it's not yet clear that they'll be willing -- or able -- to "disrupt" Ford and GM and the other big automakers.