Why would Apple make a car?
It's a reasonable question. Sure, Apple has made some pretty revolutionary products in its history, but a car is an entirely different product to manufacture than, say, an iPhone or a Mac. Apple has no experience at all designing or building most of what goes into an automobile. It's hard to see how it would compete against established carmakers like General Motors and Ford, not to mention Tesla--which has an enormous head start in both electric vehicles and self-driving capabilities.
The iPhone, however, is actually a very good way to think about Apple's venture into building a self-driving vehicle. When it was introduced, Apple had no experience building mobile phones.
Famously, Palm's CEO at the time, Ed Colligan, once said of Apple's chances at delivering a successful smartphone:
We've learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They're not going to just walk in.
As we all know now, Colligan was embarrassingly wrong--the iPhone is maybe the most successful product ever sold--but he wasn't the only one. From the outside, building a smartphone made very little sense for a company whose most popular product at the time was a small music player with a click wheel.
The problem is that people couldn't think past the preconceived notions of what they thought a smartphone was. It didn't help that the company's first attempt was a partnership with Motorola that resulted in the Rokr, also known as the "iTunes Phone." It was basically just a branded version of a device Motorola was already selling, with some software from Apple. Mostly, it was just bad.
It's impossible to know what you don't know. It's also difficult to really understand something you haven't seen or experienced. If it doesn't exist yet, you can't have experienced it, making it hard to understand.
The Apple Car is similar.
Apple isn't trying to make just another car--or even a better car. It's trying to make the thing that will redefine what we mean by "car," in the same way the iPhone has completely redefined what we think of when we say "phone."
This is why it's so hard to grasp why Apple would want to make a car--we have a hard time understanding what Apple is actually building. From that lens, it actually makes a lot of sense.
The pandemic certainly took a huge bite out of automobile sales, but they have been in decline since 2018. There are plenty of reasons for this, including stricter emissions standards around the world, the rise of ridesharing apps, and the overall saturation of the market (most people who need a car have one, and they don't seem to be in a hurry to "upgrade" just yet).
Mostly that means that there are few products more ready to be disrupted than the automobile. Tesla has certainly done that to some extent, but right now, the conditions are pretty close to perfect for someone to come in and define what comes next for the "car."
Even Tesla represents an incremental change to the automobile in the way that Palm was an incremental change to the cellphone. It took the thing you knew and added to it, or changed it in some way, but it wasn't a new thing the way the iPhone was.
Integration With iOS
The most obvious area that Apple might apply its expertise to is the software. Apple already does this to some extent, though its current efforts involve offering CarPlay to manufacturers who may have their own ideas of what the user experience should include. As a result, the entire experience isn't great, and certainly not Apple-like. An Apple Car would be designed from top to bottom to provide a completely different experience.
The other area where Apple has some experience is in building battery technology. Obviously, Tesla has experience here, but even the world's largest manufacturer of batteries hasn't fully cracked the secret sauce for a long-range, high-performance battery that doesn't weigh an actual ton. If Apple is able to deliver on what is being reported as "next-level" battery technology, it will be a game changer.
The real paradigm-shifting reason Apple will likely take its time to release a car is autonomous driving. Right now, even the best self-driving systems aren't really that at all. What Tesla describes as self-driving still requires a driver to be able to take over.
Apple has invested heavily in both the software and hardware to allow computers to see and navigate the world around them, and is reportedly looking for partners to make the lidar sensors necessary to make it possible.
Right now, most people can't wrap their brains around what it might be like to get in a car, tell it where you want to go, and sit back to enjoy the trip while watching a movie or taking a nap. If someone told you it was coming in the next five years, you'd rightfully think they were dreaming.
Of course, no one could really grasp carrying around a small device in their pockets that would act as the primary computer in most people's lives. If Apple can sell anywhere near the number of cars as it has iPhones, that idea could easily become more than a dream.