The Apple Car Is Dead - Long Live CarPlay

Apple is known for its innovation in technology and creating products that fit seamlessly into people's everyday lives. Its strategy focuses on combining hardware, software, and services for a smooth user experience. Although the electric car industry is growing and could be an exciting new field, it's quite different from what Apple usually does.

Getting into cars would mean Apple stepping into unfamiliar territory. The company is great at tech and design but making cars involves a lot more, including heavy investment, long development cycles, dealing with complicated regulations, and competing against car companies with years of experience. Plus, it would have to focus on challenges like building cars and figuring out a completely new supply chain, which is a significant shift from its current business.

Working with car manufacturers could help Apple by letting it stick to the tech side of things. However, this move would still be risky due to high capital . It could cost a lot of money, take attention away from Apple's main products, and if it doesn't go well, could hurt Apple's reputation.

High investment costs, the need for extensive R&D in unfamiliar territory, the potential for brand dilution if the venture fails, and the diversion of focus from Apple's core products and services are considerable. Just think about the distribution and aftersales challenge. Would you bring your car to an Apple store to change tires?

Another aspect is the valuation of automotive firms, which are trading at fractions of those of technology companies. Another aspect is the nature of Apple's products and their availability and accessibility to customers. Traditionally, Apple products are priced at a premium but are available to large consumer groups through immersive experiences.

An Apple Car would have to be either priced at an absolute premium or luxury range - or compromise the premium aspect of the brand if made for later audiences. While an actual car might not be the best bet for the automotive industry, this works, e.g. via its entertainment platform CarPlay or the just announced collaboration with Porsche to launch a VisionPro racing app.

In short, while the idea of Apple cars sounds exciting and could offer new ways for Apple to expand its ecosystem, there are better moves than this. The risks of entering the car market—like the huge costs, the need to dive into unknown areas, and the chance of affecting its core business—outweigh the potential benefits.

Apple has been successful focussing on tech products like iPhones and Macs, and it might be best to keep shining in that space instead of venturing into the complex world of cars that put risk to another level - and even if this decision means to write off the estimated $10 billion in development costs.