Opinion: Apple and the iCar

By John Naughton
When Steve Jobs was alive it was tempting to draw analogies between Apple and a religious cult.
Product launches in the Moscone centre in San Francisco seemed more like evangelist
congregations than capitalist rituals. And in the days before the revered new products actually
appeared in the cults retail outlets, excited worshippers could be seen camping out in
surrounding streets.
I remember once being in a British shopping arcade on the day that the local Apple Store opened
for the first time. Long queues had formed from the moment the arcade gates had been
unlocked that morning. Then came the magic moment: the glass doors opened, a hush fell on
the assembled crowd, a group of T-shirted staff walked out, formed a human avenue leading into
the store and then clapped rhythmically as the mob surged in. It was a truly extraordinary
moment in which the conventional marketing mantra about the customer being king was turned
on its head. In the case of Apple, it seemed, the customers felt privileged to be allowed to enter
the store.
At the time, I concluded that much of this Apple worship could be put down to the astonishingly
charismatic personality of Jobs. He was, after all, the only chief executive in the history of the
world to be accorded the kind of adulation normally granted to rock stars and messiahs. Apple
was obviously a one-man band and he was the Man. It seemed reasonable to conclude when he
died, therefore, that the cult of Apple would diminish or at any rate that its share price would
have peaked.
How wrong can you be? Jobs has been succeeded by Tim Cook, a nice man for whom the phrase
charisma deficit might have been invented. But the cult of Apple is still going strong witness
Stephen Frys oleaginous piece in the Telegraph the other day, which was based on a recent trip
he made to Apple headquarters at No 1 Infinite Loop, Cupertino (described by Fry as the
coolest address in the universe). And as for the share price, instead of declining gracefully it
continues to rocket. As I write, Apples stock market valuation is $746.7bn (489.1bn) which
makes it the most valuable company in the world and one that is set, according to Fry, to
become the worlds first trillion-dollar company.
When Jobs was in his pomp, we used to say that he was surrounded by a reality distortion field
that made it impossible to have an objective view of him. No such field surrounds Mr Cook, but
it certainly seems to envelop his company. At any rate, people have come to believe that, as far
as Apple is concerned, anything is possible. Hence the fevered speculation that its next target is
the car industry.
All kinds of portents from straws in the wind to chicken entrails and recent corporate hirings
are leading people to conclude that Apple must be working on a car. I call it an iCar but the
codename for the project is apparently titan. Classicists (and readers of Wikipedia) will
immediately recall that the titans were giant Greek deities of incredible strength. This implies
that the iCar will not be just a mobile iPhone docking station, but something more substantial
hardware powered by an electric motor or two, perhaps.

There must be something in the water in Silicon Valley (assuming they still have water) which
leads geeks to become obsessed with the car industry. Theres Google with its self-driving car
(which in its first manifestation is likely to be more like a self-driving golf cart) and Elon Musks
Tesla company producing electric cars for millionaires who do not suffer from a new condition
known as range anxiety. And now theres Tim Cooks Apple apparently trying to get in on the
act.
Why this obsession with cars? There are only two possible explanations. One is the kind of
lunacy that is brought on by smoking your own exhaust: the car industry, despite the blatherings
of Jeremy Clarkson, is a tiresome, low-rent, low-margin, grisly business. The other possible
motivation is at least rational, based on a strategic view that the information technology
industry will eventually peak and that it makes sense to have a beach-head in industries such as
healthcare and transportation, for which there will always be stable consumer demand. If this is
indeed what is driving project titan, then maybe its time to consider whether those Apple shares
of yours might be approaching their peak. As the ancient Greeks knew, those whom the gods
wish to destroy, they first make mad.

John Naughton is professor of the public understanding of technology at the Open University.
He is the author of From Gutenberg to Zuckerberg: What You Really Need to Know About the
Internet
Source: The Guardian, May 31, 2015

Additional information from other sources:

Apple turned each dollar of sales into 29 cents of operating profit [in 2014].
GM had operating profits of under $4 billion on revenues of around $150 billion in 2014.
Ford reported an operating profit margin of just under 4% on $135.8 billion in revenue in 2014
for its automotive business.