The Monday before Christmas isn't usually the time you expect to hear any sort of automotive news worth a damn. Then again, 2020 hasn't exactly been a usual year. Yesterday afternoon, Reuters dropped a hot potato of a report online for all to read: Apple's "Project Titan" — the fabled, mythical Apple Car — is reportedly back on, and could arrive by 2024.
Citing anonymous sources reportedly close to the project, Reuters reported that Apple is not planning on building an autonomous robo-taxi like Amazon's Zoox or Google's Waymo, but rather, a "personal vehicle" like you'd buy at your local Toyota dealership. At the heart of the project reportedly lies a new battery design of Apple's own creation for electric vehicles, which Reuters says uses fewer, larger battery cells to pack more electrolyte inside, giving the car greater range.
"It’s next level,” a source familiar with Apple’s battery technology told Reuters. “Like the first time you saw the iPhone.”
It's all thrilling to read about for anyone who likes Apple or electric vehicles (or is interested in the future of transportation at all), but it still does beg the question: but why?
We're not the only ones wondering such things. Even business-minded folks close to Apple are curious. "My initial reaction as a shareholder is, huh?" Hal Eddins, chief economist at Apple shareholder Capital Investment Counsel, told Reuters. "[I] still don’t really see the appeal of the car business, but Apple may be eyeing another angle than what I’m seeing.”
Apple, after all, has traditionally concerned itself with products and services that offer much higher profit margins and are easier to bring to market than cars and trucks, which are arguably among the most complex machines you can purchase without permission from the Department of Defense. Indeed, Apple has been extraordinarily successful doing just that; that strategy made it the first trillion-dollar company in history, then the first two trillion-dollar company in history, and now makes it the third-largest company in the world by market cap.
Diving into the world of designing, engineering and manufacturing cars at the volumes needed to ultimately turn a profit is an extraordinarily difficult venture for any company that's new to the field. Even with Apple's massive resources, building all that from the ground up would be nightmarishly complex.
(According to Reuters, Apple had been in talks with contract builder Magna International, who makes the G-Class for Mercedes-Benz and the Z4/Supra for BMW and Toyota, but those talks fell through. "In order to have a viable assembly plant, you need 100,000 vehicles annually, with more volume to come,” a source familiar with the talks told Reuters.)
If Apple is really gung-ho on Project Titan, however, we have a suggestion for Tim Cook et. al.:
Apple should buy Ford.
You might not realize it, but Apple has quite a history of buying up companies that can help it chase down its goals. Audio equipment maker Beats Electronics is by far the best-known example, but the list runs far, far longer; as Tim Cook told CNBC last year, Apple buys a company roughly every two to three weeks.
With a market cap of about $36 billion, Ford would be by far the most expensive purchase Apple has ever made. Still, it would be well within the tech company's capabilities; after all, Apple Inc. currently has close to $200 billion in cash sitting in its bank accounts.
And while snapping up one-third of the Big Three might seem diametrically opposed to Apple's usual modus operandi of buying little companies that easily mesh into its operations, bringing Ford under their Infinite Loop would bring not just all the expertise and R&D resources of FoMoCo into the tech company's arms, but perhaps more importantly, gives them a bounty of manufacturing facilities and supplier connections. Having trouble finding someone to build that Apple Car? Ford has eight factories in North America.
Apple traditionally buys U.S.-based companies; Ford, in case you've never seen a television ad in your life, is about as American as a company gets. Apple seeks out companies that are looking towards the future; Ford's own investment in electrification and autonomy is evident, as evidenced by the likes of the Mustang Mach-E, F-150 Hybrid and EV and CoPilot 360 semi-autonomous tech.
Taking Ford in wouldn't mean necessarily ditching the Blue Oval badge, either. After all, Beats still sells products under its own name; other subsidiaries like Beddit and Dark Sky also still exist under their original branding.
If all that's not enough to convince you, think about it this way: six years ago, when Apple first began dallying with designing its own car, buying Tesla — a fellow Silicon Valley innovator — seemed like a logical way to get a foot in the door. (Indeed, Apple reportedly made a bid for the company back in 2013, but it never went through.) Since then, Tesla's stock price has increased from around $45 a share to roughly $650 a share today, making it more valuable on paper than the next nine largest automakers combined.
That (massively overvalued) stock price puts it far out of reach for a takeover, of course. But if that's a sign of what investors think when you put together a tech company and an automaker, snapping up Ford might be the perfect way for Apple to capture some of the magic that's made Tesla's value climb like a SpaceX rocket.