Apple's Path from Expensive Wearables to Cars

March 13, 2015
By: Doug Mohney

The announcement of a gold-plated Apple (News - Alert) Watch starting at $10,000—before you put a band on it—only signals the company's positioning and destiny into more exclusive and luxury goods. The Apple Watch Edition is the first step towards an automobile but must be placed into context as to how the company views itself.

Apple's penchant for design and elitism started in 1984, with Steve Jobs (News - Alert) defining the Macintosh exactly as he wanted it.  The Mac was a product of numerous people and inventions, owing inspiration to the Xerox PARC research lab.  However, Jobs set the tone, at times choosing design over practicality, such as locking the original Mac into 128 KB of RAM (News - Alert) memory and a single-sided 400 KB floppy disk drive with no way to upgrade other than cracking the case or buying a new computer. 

Out of that design decision came another "feature" for Apple, design obsolescence. PCs of the era were always improving with faster drives, more storage, more RAM, better graphics, and faster CPUs.  Expandable tower-style computers from Apple were the exception, while "The rest of us" were expected to buy devices based on style over function—sound familiar?

Mac users were happy to pay a premium for their computers, boasting of the elite qualities, ease of use and the “cool” look. They would imply (and still do today) that the Mac and the family of iProducts is more secure than anything in the Windows or Android (News - Alert) world because, well, it is made by Apple and the company is a priori just so much better than the rest of universe.

Apple continued to build its brand around design, each rollout of a new product or refresh of an existing one highlighting the style, the materials, the warmth, the care given to think out every feature, even if that feature disagreed with conventional wisdom.  Making smartphones with big screens was gauche, simply rude and impractical, said the company, until it bowed to market demand and introduced the iPhone (News - Alert) 6 Plus. Then, deemed Apple, big screens were a new and improved feature that the rest of the world just has to have, shaping its delay in adapting the feature not a failing, but an attribute.

The company's emphasis on design and looking good has made a difference.  Microsoft's Surface Pro line of tablets is the best example where a competitor has taken Apple's design philosophy and applied it to their own products. The original MacBook Air foreshadowed the appearance of the Windows ultrabook.

How does the establishment of an elite brand known for design lead to car manufacturer?  Certainly Apple has established its credentials for well-crafted products using the finest materials, with the Apple Watch Edition the current pinnacle of that reputation.  It can be placed into the category of luxury brands such as Bang & Olufsen, BMW, and Mercedes-Benz.  

Add that reputation to the evolution of automobiles as technology-laden devices.  Tesla is the current thought leader in tech-cars, but the traditional auto makers have all put their cards on the table to have autonomous operations in the next seven years or so—assuming the regulatory environment can get worked out to everyone's satisfaction.   But integration of car telematics systems with iOS and Android operating systems has been rough going until this year and begrudgingly so.  

Auto system security is coming up as a hot button, with real world hacks (and over-the-air software patches) to bypass electric car locks already occurring. More ominously, researchers have demonstrated ways to take over auto systems to remotely put on the brakes and accelerator. 

Enter Apple, a luxury brand name, an aura of being "more secure" than the Windows world.  The company could build a low-volume production line, competing against names such as Mercedes-Maybach, Lotus, and Ferrari.  Apple could afford to charge more than the typical Detroit or Asian model because it would presumably be all about style and limited numbers—along with perfect integration with your iPhone, iPad and Apple Watch Edition.

Time will tell if Apple is serious about building vehicles.  But if it does, these won't be cars for the rest of us,  but the one percent.




Edited by Dominick Sorrentino