Apple’s car obsession is all about taking eyes off the road

At first glance, the forays Apple Inc., Google and other technology giants are making into the world of cars don’t appear to be particularly lucrative.

Building automobiles requires factories, equipment and an army of people to design and assemble large hunks of steel, plastic and glass. That all but guarantees slimmer profits. The world’s top 10 carmakers had an operating margin of just 5.2% in 2020, a fraction of the 34% enjoyed by the tech industry’s leaders, data compiled by Bloomberg show.

But for Apple and other behemoths that are diving into self-driving tech or have grand plans for their own cars, that push isn’t just about breaking into a new market — it’s about defending valuable turf.

“Why are tech companies pushing into autonomous driving? Because they can, and because they have to,” said Chris Gerdes, co-director of the Center for Automotive Research at Stanford University. “There

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Apple’s Lengthy Flirtation With The Car Enterprise Divides Analysts

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A Car Could Drive Apple’s Market Cap to $3 Trillion, Analyst Says. Here’s How.

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Apple has the resources to make a car, says Citi analyst Jim Suva.

Eric Thayer/Getty Images



Car is coming, and it could be spectacular. At least, that’s what Citi analyst Jim Suva thinks.

In a deep-dive research note Friday, Suva writes that entering the automotive market could be the catalyst that drives Apple’s market capitalization to $3 trillion from $2 trillion. While there has been plenty of talk about an Apple car, the company hasn’t addressed the possibility, and has a policy of not discussing future product plans.

“Yes, we do believe Apple will likely make an Apple Car via outsourced production and that this will be part of the road for Apple to travel from a $2 trillion market cap to $3 trillion,” Suva writes.

He concedes that cars would have margins below the current corporate average, but thinks the returns to Apple would be

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