Recent speculation over Apple's entry into the car-making world has reached a fever pitch. Multiple reports have sources explaining (anonymously) that the tech behemoth has hundreds of employees working on a now-not-so-top-secret project to innovate and develop an electric vehicle. If this comes to fruition by as early as 2020, as sources have indicated, it would be a game-changer for not only the world of technology, but the automotive and transportation industries as a whole.
In the 1980s, Apple took on a similar development project, which branched the company away from its core product offering. The team developed the Newton, a PDA that was the first of its kind, even coining the phrase "personal digital assistant" to describe it. But beyond coming up with the name for a category that would come to life for a whole host of competitors soon afterward, the product flopped. Former Apple CEO John Sculley has estimated it took roughly $100 million to develop the product, only to see it completely fail. Apple had entered a new space in the late '80s and didn't get it right--and now in 2015 in nor-Cal, they're setting themselves up for failure once again. To avoid another Newton moment, Apple must build and launch this car in Detroit.
1) The right talent and know-how. Here in Detroit, we have the most talent, expertise, and focus on cars. If you want to make a blockbuster film, Hollywood is your place. But a brand new car--we have all the right resources, from talent to suppliers to 100 years of know-how. I mean, let's be clear: We didn't earn the nickname "Motor City" for nothing.
2) The right experience and mindset. We have a rich history, but a fresh approach. This Rust Belt city is in the midst of massive transformation, and we are no longer tied down by the failures of the past. After hitting bottom around 2008, then coming through on the other side of municipal bankruptcy, Detroit (and the auto industry as a whole) is crafting the most prolific rebirth in American history. So we offer the perfect balance of experience combined with open-mindedness.
3) The right leaders. Our governor is a former startup entrepreneur turned venture capitalist. Our mayor is a powerful and successful business leader. The leadership in the Big Three has never been stronger or more innovation-driven than it is today. We have the right leadership in both the public and private sectors to cut through BS and bring this vision to life.
4) The right location. Detroit is centrally located in the country, and due to the auto industry's stronghold here, there's easy access to parts, labor, and suppliers--both domestically and internationally, just across the Canadian border. Additionally, the city boasts a close proximity to University of Michigan, CCS, and others for top engineering and design talent.
5) The right cost structure. Building cars is very different than building iPhones. According to General Motors' former vice chairman Bob Lutz, in a good year, you'll see 5 percent to 6 percent profits. In a bad year, you hemorrhage cash. With thinner margins, Apple must manage its cost structure to win in the automotive sector. Detroit has significantly lower costs of talent, housing, taxes, and just about everything else versus either coast.
With Apple's resources and creativity, let's move past the debate of "if" and move on to the discussion of "when and where." It's going to happen, and the ideal spot on our planet is right here in Detroit. Your move, Tim Cook.