In another sign that Apple might get into the auto business, the Cupertino, Calif., tech giant has quietly hired a former senior executive from Chrysler.
Doug Betts, who was Chrysler’s quality chief and a senior vice president until November, now says on his LinkedIn profile that he works for Apple in a nonspecific “operations” position. Before Chrysler, Betts worked for Nissan Motors Manufacturing and Toyota Motors Manufacturing.
The hiring was first reported by the Wall Street Journal. Apple also has hired Paul Furgale, a Swiss autonomous vehicle and robotics expert, the Journal said.
Another hint of Apple’s designs surfaced in a lawsuit filed against Apple this year by electric car battery maker A123 Systems. The company, which makes batteries for BMW, Daimler and Tata, accused Apple of poaching its employees.
Some analysts believe Apple is considering a move into electric vehicles and is hiring various experts, conducting research and evaluating the market. Apple itself has not talked about its automotive plans outside of developing CarPlay, an interface that allows vehicle infotainment systems to tap apps driven by the iPhone.
“It makes sense to me, like Tesla, you would be brainstorming, and thinking: What could I do if I started with a clean sheet of paper?” said Frank Gillett, an analyst at Forrester. “This is not about going against General Motors. This is reinventing the entire idea of transportation.”
The auto and tech industries are clearly on a collision course, however. Tech companies like Apple and Google — which is researching self-driving cars — are competing with automakers for revenue that might be derived from automation of cars and the applications that people use while driving.
While tech companies are inching into the car business, automakers — including Ford, Honda, BMW, Volkswagen, Nissan and Toyota — are setting up research and development operations in Silicon Valley, and playing key roles in developing technology for autonomous vehicles, communication and smartphone integration.
“Cars have become the new smartphone,” said Thilo Koslowski, vice president and automotive practice leader at Gartner Inc. “It is the ultimate mobile device.”
Technology companies are exploring a range of options, including offering an entire vehicle, providing phone tethering services such as CarPlay and creating the complete human-machine interface for a vehicle, Koslowski said.
“Over the next 12 to 18 months, we will hear of at least one technology company announce an auto offering,” Koslowski said.
In a report to investors this year, Adam Jonas, auto industry analyst at Morgan Stanley research, noted that Apple generates billions of dollars in profits and has scads of cash available for investment in a capital-intensive project such as car design.
Just one quarter’s worth of free cash flow at Apple, about $15 billion, is equal to nearly four months of the combined research and development spending of all of the world’s automakers, he said.
Apple reported a third-quarter profit of $10.7 billion Tuesday on record revenue of $49.6 billion.
Any vehicle Apple designed would be electric because, Jonas said, that’s the future of the industry as autonomous vehicles hit the roads, speeding a transition from individual car ownership to shared transportation.
Others are more skeptical.
“It would be completely out of Apple’s sweet spot to create a car,” said Tim Bajarin, a technology consultant and president of Creative Strategies. “Everything that they’ve created so far, even the Watch, we could have forecasted. But I would never have thought, and I still am not convinced, that Apple is doing a car.”
Bajarin believes Apple’s automotive hires and research are aimed at creating the electronics ecosystem that is part of the next-generation’s car intelligence. That includes obvious components such as the entertainment system.
But it also could include other items such as the “sensors, cameras and other things that could eventually affect the design of cars in the future to make them smarter,” he said. “Apple is creating the equivalent of the intelligence for a smartcar.”