By Daisuke Wakabayashi And Mike Ramsey
Apple Inc. has revolutionized music and phones. Now it is aiming
at a much bigger target: automobiles.
Apple has several hundred employees working secretly toward
creating an Apple-branded electric vehicle, according to people
familiar with the matter. They said the project, code-named
"Titan," has an initial design of a vehicle that resembles a
minivan, one of these people said.
An Apple spokesman declined to comment.
At best, it will be several years before an Apple car could hit
the road, even if development goes smoothly and if Apple decides to
proceed with the project.
Apple may decide not to proceed with building a car. In
addition, many technologies used in an electric car, such as a
long-life battery and in-car electronics, would be useful to other
Apple products, including the iPhone and iPad. Apple often
investigates technologies and potential products, going as far as
building multiple prototypes for some things that it won't ever
sell.
But the size of the team and some of the people assigned to it
indicate that the company is serious, these people said. Apple
executives have flown to Austria to meet with contract
manufacturers for high-end cars including the Magna Steyr unit of
Canadian auto supplier Magna International Inc. A Magna spokeswoman
declined to comment.
"There are products that we're working on that no one knows
about," Apple Chief Executive Tim Cook told Charlie Rose in
September. "That haven't been rumored about yet."
Mr. Cook approved the car project almost a year ago and assigned
veteran product design Vice President Steve Zadesky to lead the
group, the people familiar with the matter said. Mr. Zadesky is a
former Ford Motor Co. engineer who helped lead the Apple teams that
created the iPod and iPhone.
Mr. Zadesky was given permission to create a 1,000-person team
and poach employees from different parts of the company, one of the
people familiar with the matter said. Working from a private
location a few miles from Apple's corporate headquarters in
Cupertino, Calif., the team is researching different types of
robotics, metals and materials consistent with automobile
manufacturing, the people said.
In September, Apple hired Johann Jungwirth, who had been the
president and chief executive of Mercedes-Benz Research and
Development North America, which has operations in Sunnyvale,
Calif., near Apple's campus, according to his LinkedIn profile.
The Financial Times reported earlier that dozens of Apple
employees are researching automotive products, citing people
familiar with the company.
Over the past 15 years, Apple has built a track record of
upending industries. Its iPod music players and accompanying iTunes
service accelerated the shift to digital music. The iPhone
established the smartphone market and changed the notion of mobile
computing. Apple plans to introduce its Apple Watch in April, which
the company hopes will create a market for wearable devices.
Manufacturing a car is enormously expensive. A single plant
usually costs well over $1 billion and requires a massive supply
chain to produce the more than 10,000 components. Elon Musk, the
chief executive of electric-car maker Tesla Motors Inc., said last
fall that it is "really hard" to make a car, as the company
struggled to ramp up production on its Model S sedan.
The expense is a barrier to entry to many potential competitors,
but would be less of a hurdle for Apple, which reported holding
$178 billion in cash as of Dec. 27, 2014.
Tesla was able to ramp its manufacturing quickly and relatively
cheaply by buying a former Toyota Motor Corp. factory in Fremont,
Calif., for $42 million in 2010. Tesla has since invested hundreds
of millions of dollars to tool up the factory and still only
produced 35,000 vehicles in 2014.
Auto makers tend to operate their own factories. Apple has
relied on contract manufacturers to build all of its products. That
has helped Apple keep a lean supply chain and reduce inventory
exposure.
Apple has been working with auto makers on bringing its software
expertise into the car. More than two dozen auto makers plan to use
its Car Play service, which allows a driver to access Apple
services like iTunes music, maps and Siri through the vehicle's
dashboard information system.
Apple's industrial design team is staffed with several designers
that have work experience at European auto makers. Last year, Apple
hired Marc Newson, a famous industrial designer and close friend of
the company's design guru, Jony Ive. In the past, Mr. Newson has
created a concept car for Ford.
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