Is the Apple Car the Next “Big Thing”?

If you, dear reader, are a great follower of Apple products, you will surely look forward to the already famous presentations that the company makes year after year to show its new products and, in particular, the moment towards the end of the presentation where the CEO announces the latest surprise of the event (“one more thing”).

Well, for several experts and fans of the brand, this last element of surprise has begun to be lost. There is no doubt that Apple products, starting with the iPhone, have generated substantial profits for the company and have made it the most valuable company on the planet with a capitalization value of more than $ 2 trillion. However, it is also true, there is a certain feeling that this high innovation that characterized the company has not been as significant or impactful as years ago.

But these experts could be wrong. Last December, Reuters put Apple back on the scene by stating that the Californian company was well on its way to launch and produce its first vehicle in 2024. A car that promises to be completely autonomous and use cutting-edge battery technology, which would drastically reduce its cost, while significantly increasing the driving range.

The notice is not new. In 2014 it became known that Apple was working, with some secrecy, on the so-called Titan Project, a project that sought to develop an electric and autonomous car with the Apple brand. At the time, the project attracted a lot of attention from the sector. However, with the passage of time and the appearance of rumors about the difficulties in its development, the Titan project was losing relevance among the public.

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However, this time it could be different. A new management team and the fabric of new alliances could be relaunching the project to a new level. However, the question remains: is Apple really worth the effort to have a place in the history of the automotive industry?

There are many reasons to think that this project makes sense. Definitely, a vehicle with the aforementioned characteristics would relaunch the image of technological innovation that for so many years has distinguished Apple. Additionally, with a huge base of loyal customers, many of them with high purchasing power, the success of such a product could be practically guaranteed.

On the other hand, if there is someone with experience building global production chains, it is precisely Apple because it has known how to weave a vast supply network, subcontracting the assembly of its products to manufacturing companies such as Foxconn and connecting all this with different points of sale starting with the already famous Apple stores, located in the best locations in big cities.

However, as we know, there is a great distance between making cell phones and making cars. It has taken Tesla more than a decade to learn how to design and build vehicles and put them on the road on the road, and only last year has it started to make a sustainable profit.
Several experts have questioned the reasons that lead a company with really high operating margins like Apple to enter a business whose margins are usually in the single digits such as the automotive industry. However, if anyone has the resources to undertake a project of this magnitude, this is undoubtedly Apple.

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The last word will be Apple and, of course, the market. The project, despite the difficulties, excites and would further revolutionize an automotive industry that is undergoing profound structural changes. It only remains to see if Tim Cook, Apple’s CEO, will finally mention the magic words “one more thing” before unveiling the outcome of the Titan project.

* Professor of the Operations Management area of ​​IPADE Business School

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