If Apple Really Builds a Car, What Will the Apple Car Be Like?

Any resemblance is purely coincidental.

Whether or not you believe Apple is really building a car, the carmakers do.

Last Wednesday, Oliver Zipse, BMW's head of production, said BMW remains open to working with Google and Apple on new cars. He took care to add that "we are in an era of win-win cooperation."

The first word of an Apple car came this February. The business news site Business Insider received an email from someone claiming to be on Apple's car team, saying that quite a few Tesla employees had jumped ship to Apple and that the two companies would soon compete head-on.

Two days later, The Wall Street Journal followed up with details of the project, reporting that hundreds of people were working on it under the code name "Titan." The reports since have sounded more and more real. Most recently, The Register reported that the Apple Car project had pulled so many people from other Apple departments that some executives were complaining.

But the real bombshell came from Apple itself.

As we have reported before, Apple's challenge is that it lives almost entirely on one product, the iPhone. It needs to find its next business as big as the iPhone. What could that be?

When someone at the Code conference put that question to Jeff Williams, Apple's senior vice president of operations, he answered: "The car is the ultimate mobile device, isn't it?"

Many people will call an Apple car a fantasy. A car is a very big thing, after all, and the iPhone is so small.

Building a car is certainly hard. But many people have forgotten that the iPod once seemed just as unlikely. When Steve Jobs returned to Apple in the late 1990s, it was a niche personal computer company selling 3 million Macs a year, mostly to working professionals. A few years later it launched the iPod and became a mass-market consumer electronics company selling 50 million iPods a year. Last year alone, Apple sold more than 100 million iPhones.

Today Tesla and Google are both building cars from scratch. For Apple, with nearly US$200 billion in cash, building a car is not an impossible task.

So here is the question: when Apple makes the Apple Car, what kind of car will it be?

Apple will keep tight control of both the software and the hardware, and will not partner with BMW

In 2006, in a Q&A with Apple interns, Jobs named the two products he thought were the worst designed: the cell phone and the car. As if to prove him right, a year later the newly designed iPhone upended the whole industry, which is why every smartphone today looks much the same.

One of the two prophecies has come true. What about the other?

In that Q&A, Jobs was even harsher about cars. He called the cars of the day "terrible," and said that if he could, he would start a car company himself and show the other manufacturers how a car should be built.

Jobs died in 2011, so we will never see an Apple car made under his direction. But his ambition to disrupt the auto industry lives on. This March, when a CNBC host asked Apple's current CEO, Tim Cook, where Apple was headed, he named three areas: health care, the smart home and the car.

Apple has made moves in all three. In health care it has HealthKit and the Apple Watch; in the smart home, HomeKit and Apple TV. And for cars it has launched CarPlay, an in-car Apple system whose partners include BMW, Fiat Chrysler, GM, Hyundai, Volkswagen and many other auto giants.

But in an industry ruled by hardware, Apple's in-car system has little say. Ferrari's CarPlay uses a resistive touchscreen, like the pre-iPhone phones you had to poke with a stylus. Other carmakers' CarPlay screens vary in size and responsiveness.

The worst problem is that CarPlay cannot reach the car's core data. It can only take over navigation and entertainment, which is not much different from mounting an iPhone on the dashboard.

Apple has tried making the software while another company makes the hardware, and it failed. CarPlay today looks a lot like the Rokr in 2005.

The iPhone was not the first phone unveiled at an Apple event. In 2005, at the Moscone Center in San Francisco, Jobs launched the Motorola Rokr alongside the iPod nano. Under the deal, Apple supplied the Rokr's music service, while Motorola handled the hardware and all the rest of the phone's software.

Jobs unveils the Rokr in 2005

But this music phone with an iPod built in was nowhere near as popular as the iPod. Its features and looks were both dated, and at the launch it was completely upstaged by the iPod nano. Working with Motorola only hardened Apple's resolve to make its own phone. In the end, pushed by Jobs, Apple built the iPhone on its own, with hardware and software designed together. At first it was described as a phone that could do what an iPod does.

Today's CarPlay has a lot in common with iTunes on the Rokr. On one hand, Apple has to keep adapting it to different models from different carmakers to make sure the experience is good enough. On the other, without control of the hardware, CarPlay cannot fundamentally change the experience of driving.

CarPlay also faces competition from carmakers' own in-car systems and from Google's Open Automotive Alliance (OAA). The first group includes systems such as BMW's iDrive, which BMW once spent heavily to develop. The second is Google's offer of a deeply customized Android system to carmakers.

To truly enter the car business and meet the challenge from Google, Apple's only choice is to control both the hardware and the software.

The Apple Car will be designed by Jonathan Ive

The most important Apple news lately may be Jonathan Ive's new job. In early July he officially became Apple's chief design officer (CDO), in charge of all of Apple's design.

Oddly, though, the two newly appointed vice presidents, Richard Howarth for industrial design and Alan Dye for user interface design, are nominally Ive's subordinates, yet they report directly to CEO Tim Cook rather than to him. That has led some to worry that Ive has been kicked upstairs and in effect sidelined.

But we think it more likely that Ive will throw himself into designing the Apple Car, and has handed the day-to-day work to his two lieutenants.

A concept car Marc Newson once designed for Ford

Apple's two biggest-name designers are Ive and his friend Marc Newson. When Newson joined Apple, the Ford he had designed was taken by some as a template for the Apple Car. But in a recent interview, Newson said he was working on the Apple Watch.

Ive's importance to Apple hardly needs stating. In the five years since Jobs's death, Ive has been the person who really sets Apple's design taste, and losing him would be a serious blow.

Ive is also a car enthusiast. Designing a disruptive car at Apple would be the greatest challenge, and the greatest temptation, of his career.

The Apple Car will not look Japanese or American, but it may well look British

We cannot guess what Ive will design, but what he will not design is easier to guess.

Both Jobs and Ive were deeply unhappy with traditional car design, and both have made it known, openly or not, that they dislike the utilitarian style of Japanese cars. The latest Jobs biography, Becoming Steve Jobs, tells a story about how he got John Lasseter to change cars.

Lasseter and Jobs were sitting outside Lasseter's house, staring at his 1984 Honda Civic, when Jobs suddenly said: "Don't tell me that's your car!" Soon Jobs had paid Lasseter's salary in advance and told him to replace the car, subject to Jobs's approval. Lasseter ended up buying a Volvo that Jobs approved of; this was before Ford bought Volvo, when it was still a Swedish brand.

Likewise, The New Yorker's long profile of Jonathan Ive touches on his attitude to cars. He believes "one person's car is another person's landscape," meaning you should take care over how your own car looks. When the writer asked him about a silver car to their right (a Toyota Echo), he said: "It's just so boring."

Ive does not like American cars either. Vogue's profile of Ive lets his friend Marc Newson say so, calling those designs "the crap we all hate."

So if the Apple Car truly carries on Jobs's dream of disrupting the auto industry, and Ive designs it, it will almost certainly look neither Japanese nor American. As for what it might look like, consider what Jobs and Ive drive.

Jobs is simple: the story of him driving a Mercedes SL55 with no license plates is well known. Ive's collection, as recorded in his biography, includes two Aston Martins, two Bentleys and more besides. Count them up and you will find that apart from an orange Fiat 500, every car comes from Ive's home country, Britain.

It would be no surprise if the Apple Car, when it finally appears, looks like a British car.

Oh, and don't expect a radical shape unlike anything before it, as with the Mac Pro or the iPhone. People still have to sit inside a car.

The Apple Car can only be electric, running on lithium batteries like a Tesla

Many auto executives doubt the rumor that Apple is building a car. Former GM CEO Dan Akerson put it bluntly: "They [Apple] should think hard before they get into this hard-core manufacturing business. We take iron, raw, unrefined pig iron, and turn it into cars. They won't know what they're getting into until they try it."

But Akerson seems to have forgotten Tesla. Founded only in 2003, the electric carmaker is now worth US$35.4 billion, about two-thirds as much as century-old GM. Making cars is not as hard to get into as he says, mainly because of lithium batteries.

Ten years ago, electric cars meant low speed and short range. Lithium battery technology, as it appeared and improved, changed all that. Compared with lead-acid batteries, lithium-ion batteries store more energy for their weight, charge faster and last longer, so the electric cars they power go much farther and are much easier to use. Tesla's rapid rise is the result of lithium batteries coming of age.

For traditional carmakers, the technology that kept rivals out was knowing how to build a gasoline engine. But electric cars do not run on gasoline at all, so the technology carmakers rely on most no longer gives them an edge.

Instead, as has happened again and again, yesterday's giants are weighed down by lucrative but outdated businesses and struggle to commit fully to change. Nokia's and BlackBerry's smartphones and the print edition of The New York Times are all examples.

So if Apple wants to get past the manufacturing barrier of the traditional car industry, the Apple Car can only be electric. This March, rumors said that Apple shareholders wanted Cook to buy Tesla, but Cook thought that would cost too much and might set off a bidding war that pushed the price up. He added, however, that Apple has been keeping an eye on the relevant engineering talent.

In fact, a month earlier, Bloomberg had reported on the talent war between Apple and Tesla. Tesla had hired 150 people away from Apple, more than from any other company, but Apple had in turn poached at least three engineering executives from Tesla: David Nelson, Pete Augenbergs and John Ireland.

This February, Apple was also sued by the lithium battery maker A123 because five technical staff Apple had hired away had broken their employment contracts. A123 said these engineers were vital, and that their departure had stalled its battery research.

But the Apple Car will not drive itself

When we talk about smart cars today, the first thing that comes to mind may be the driverless car from Google X. The search-trend chart shows that before Google's driverless car was revealed in 2009, "smart car" was the hotter term. Since then, Google's driverless car seems to have stolen the spotlight.

Blue line: the keyword "Google Car"; red line: the keyword "smart car"

With the rise of Google's car came the idea of driverless driving itself. In recent years, news has kept leaking out of carmakers and internet companies developing driverless cars. In September 2013, Tesla CEO Elon Musk said he was working on one. At CES 2015 this January, Audi, BMW, Mercedes and others showed off their own driverless technology, and in February Uber joined in. In China, Baidu and Wanda have also said they will build driverless cars.

Driverless driving looks set to be a major trend in carmaking, and its arrival only a matter of time. But from what is publicly known, we believe the Apple Car will not be fully driverless, at least not the first generation.

At this year's Code conference, which has just ended, Jeff Williams, Apple's senior vice president of operations, let something slip, which is rare. A reporter noted that 65% of Apple's revenue now comes from the iPhone and asked what Apple's next hit product would be if it wants to keep growing. Williams answered, "The car is the ultimate mobile device, isn't it?"

Apple executives are always tight-lipped, especially someone as senior as Williams, who reports directly to Cook. He would not drop such a suggestive line for no reason.

In 2013, Cook was asked at the All Things Digital conference what he thought of Google Glass. He said glasses were too conspicuous for mainstream society to accept, but "I think the wrist is interesting. It's neutral." A year later, Apple released a smart device for the wrist: the Apple Watch.

This time Williams all but spelled out Apple's interest in smart cars, which suggests Apple is seriously thinking about selling one to consumers, not just keeping it as an experiment. From what QDaily saw at CES, even if the technical and cost problems were fully solved, changing the tangle of laws so that driverless cars can go on the road would take at least another 10 years.

Williams has no need to test public reaction to a technology that may arrive only in 10 years. Driverless driving is the future, but the first Apple Car cannot wait for it.

Still, although fully driverless systems are some way off, the Apple Car will certainly drive itself partly, under certain conditions. The high-end models of many carmakers already have semi-autonomous features: keeping a set distance from the car ahead on the highway, adjusting to the speed limit on road signs, and braking automatically when a collision is imminent.

The Apple Car's steering wheel will not be the one you use now

The most direct and most frequent way people deal with a car is the steering wheel, followed by the gear lever. Given Apple's habit of reinventing how we use things, these are the two places most likely to change in the Apple Car.

Apart from the Apple II, made in the days when Apple was a garage workshop, every one of Apple's landmark products has arrived with a new way of using it.

• The Mac had the graphical interface Jobs learned about at Xerox's lab, which replaced typed commands;
• The iPod's Click Wheel turned tedious button-pressing into sliding;
• The iPhone's multi-touch screen killed off every phone with a keyboard, and is why today's smartphones all look alike;
• The Apple Watch brought detailed haptic feedback and the Digital Crown. The first gave touch a third dimension; the second, an update of the traditional winding knob, gives the watch an old-fashioned beauty.

It is hard to imagine what new way of using a car Jonathan Ive and his team will come up with for this rumored Apple Car. But like the crown on the watch, the steering wheel is the likely starting point, rather than a touchscreen that changes everything.

The buttons and readouts scattered across today's dashboard, center console and gear lever will also be sorted out.

Will the Apple Car have Siri, you may ask? Of course it will, whether you want it or not.

The Apple Car will be three things in one

If you often watch Apple events, you will know Jobs's classic "rule of three." When he unveiled the iPhone in 2007, Jobs said he was introducing three things: a widescreen iPod, a phone and an internet communications device.

Today we use the iPhone for its millions of apps, but at launch those three things were its main selling points.

Cook has kept the habit. When he launched the Apple Watch, he described it as a precise timepiece, a new and intimate way to communicate, and a comprehensive health and fitness device.

At this year's WWDC, Jimmy Iovine described Apple Music as three things combined: a music service, a 24-hour global radio station and a place for fans to connect with artists, though he did not seem entirely sure what he was doing.

So how will Cook sum up the Apple Car when he launches it? Our guess: a revolutionary vehicle, an intelligent secretary and an entertainment system, all in one.

A better car is the bare minimum. Suggesting routes and destinations automatically, based on your schedule, the weather, traffic and other information, is where a smart car begins. The third part will help the Apple Car change how people think about travel, turning a drive with family or friends into a pleasure.

But as with the iPhone, the Apple Car's future will not be decided by a handful of Apple's own software features. What third-party apps can do is what matters. At its core, after all, the Apple Car is still a personal computer.

At heart, the Apple Car is a personal computer

When Apple released the iPhone in 2007, it announced that Apple Computer, Inc. would become Apple Inc. Yet to this day, whether it makes the iPhone, the iPad, the Apple Watch or the Mac, Apple is still a company built around the computer, and all its products can be seen as computers in different forms.

Cars, in fact, have long been crammed with processors. A 2010 New York Times article said an ordinary car usually has more than 30 microprocessors, and a luxury sedan nearly 100.

That many processors is a joke. Fewer is obviously better. Remember the game machine Jobs and Wozniak built for Atari before they founded Apple? Yes, the one where Jobs cheated Wozniak out of several thousand dollars. Atari's boss, Nolan Bushnell, had offered Jobs a bonus for every chip he could cut, and Wozniak used memory to cut 50 chips.

If a car's information is processed in one place, it is not only more efficient and cheaper; combining different kinds of information also helps the software make better decisions.

Traditional carmakers have botched this. They took the crudest route, stuffing cars with sensors, to achieve "intelligent control." Apple will change all that with the Apple Car. Its aim will be to turn the car into "one" computer.

A personal computer is, at bottom, a computing device that helps us handle information. Its purpose need not be productivity. Few people do their office work on an iPhone, yet it makes our lives easier. As described above, the Apple Car will likewise combine a vehicle, an intelligent secretary and an entertainment system.

Imagine this: you walk up to the car with your iPhone, the car recognizes you as its owner, opens the door for you, and sets the seat and air conditioning to suit your body. While you drive, it navigates, plays music and reads you the news, based on the personal information stored in your iPhone.

The Apple Car will not be an iPhone accessory

The iPhone is still at the center of most Apple products. Neither CarPlay, Apple's in-car software, nor the Apple Watch works on its own. CarPlay has to connect to an iPhone: it looks as if we are using entertainment and navigation on the car's screen, but we are really using an oversized iPhone. The Apple Watch likewise relies on the iPhone's Bluetooth for data; away from Wi-Fi, it can only tell the time.

But this iPhone-centered approach may well change when the Apple car appears. A car has no limits on power or screen size and can connect to the internet and work on its own. And for the Apple car to stay online on the move, it will need the mobile carriers. Eddy Cue, Apple's negotiator with the carriers, will no doubt step in again, and people buying a car will have to choose among the three big carriers.

What role will the iPhone play in the Apple car? Quite likely it will still bring distinctive navigation aids or entertainment options, such as Apple Music.

We can also expect the Apple Car to read the driver's iPhone and automatically offer trip suggestions, music and even a driving style tailored to that person.

But the iPhone will no longer be the center.

The Apple Car will be priced closer to a BMW than a Ford

Across most of its product lines, from the iPhone and the Apple Watch to the iPod, the iPad and the Mac, Apple follows a set strategy: position the product as an "affordable luxury", price it and earn more on it than comparable products, and offer clear price tiers from low to high.

This conclusion rests not only on Apple's brand but also on its finances. Business Insider offered a sensible way to think about it: compare Apple's US$53 billion profit for 2014 with the profits of the big carmakers, and you will see that Apple is unlikely to focus on mass-market cars or to sell only at the top end.

• Porsche, a high-end carmaker, has a 20% profit margin but annual profit of only US$2.6 billion, 5% of Apple's current profit;
• GM sells 3 million vehicles a year, but its annual profit is only US$1.5 billion, 2% of Apple's current profit;
• A mid-to-high-end line like BMW's is a good choice, because it addresses a huge market of 2 million cars a year. Last year BMW made US$11 billion, 20% of Apple's current profit.

When Apple enters a difficult market in search of its next source of profit after the iPhone, it will not bother with one worth only a sliver of its own profit.

Ive believes "one person's car is another person's landscape," meaning you should take care over how your own car looks. And to reach a wider range of buyers, the first Apple car may come in more than one model.

But unlike BMW, Apple will set prices by materials, power and other features that have nothing to do with computing, rather than saving the most advanced processors, sensors and software for the top model.

Just as the Apple Watch Sport, at under 3,000 yuan, has the same processor and screen resolution as the 180,000-yuan rose gold Edition, the Apple Car will keep its computing hardware the same across models so that third-party apps can reach more users.

Sayonara: the things that may die

Finally, let us say goodbye to the things that may disappear in the Apple Car:

• The manual gearbox. Please, this is a semi-autonomous world;
• The car key. The Apple Watch and the iPhone are both keys;
• The cigarette lighter. (You say it is mainly used as a USB adapter these days? Then why not design it the other way around?);
• The air conditioning buttons. In fact, once the dashboard becomes a screen, the whole center console is redundant;
• The wiper stalk and the headlight stalk. At last we no longer have to put up with your strange design;
• The dealership. Apple Stores and online ordering are enough;
• The concept car. Any consumer product that cannot reach your hands within six months is a joke, and the concept cars shown at carmakers' launches, whose ideas won't reach ordinary models for 10 years, should have been retired long ago.