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Will Apple be breaking into the auto industry? -- What we know

Speculation of an Apple car came in 2015

Speculation of an Apple car came in 2015 when the A123 Systems electric car battery company sued Apple Inc. for poaching some of its employees.

Ever since then, there’s been talk about whether the company would build a computer car, and the buzz is now getting to a point which there’s discussion of where and how Apple would develop it.

Gartner auto analyst Mike Ramsey said the idea of Apple getting into the car business grabs attention.

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“You can sort of imagine in your mind what a car designed by Apple -- the interior, the exterior, the ability to work with all your Apple devices seamlessly could be -- and of course it’s intriguing,” Ramsey said.

But Guidehouse Insights auto analyst Sam Abuelsamid said he is not so certain.

“They like to get into high margin businesses where they can make 35%-40% profit margins. Nobody in the auto industry has ever made those kinds of profit margins. It just doesn’t happen and it is not likely to happen any time in the foreseeable future,” Abuelsamid said.

Industry headlines have recently included notions that Ford could possibly build the Apple Car, then Hyundai and now there’s also Canadian auto supplier, Magna.

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“If it does get built, Magna is the most likely candidate because as a contract manufacturer, they build vehicles for a lot of different companies. They have experience doing contract manufacturing. That’s the kind of company that Apple likes to work with and the rest of their business,” Abuelsamid said.

“I can promise you that anyone selling a premier automobile would be really intimidated by the idea of Apple entering the market,” Ramsey said.

Local 4 reached out to Apple and Magna but did not receive a comment.


About the Author
Rod Meloni headshot

Rod Meloni is an Emmy Award-winning Business Editor on Local 4 News and a Certified Financial Planner™ Professional.

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