An Apple Car could allow Tim Cook to step out from behind the shadow of Steve Jobs

An Apple Car could allow Tim Cook to step out from behind the shadow of Steve Jobs

Tim Cook

Apple Inc. co-founder Steve Jobs has been dead since October 5, 2011. Tim Cook took over as CEO the same year. Apple has posted a huge stock and revenue run up since then, but the company’s primary product line has not changed. The rumored launch of an electric and autonomous car finally would put Cook’s stamp on Apple’s portfolio.

A look at Apple’s earnings for the year that ended September 26 shows the extent to which Apple’s revenue comes from products and services launched before Cook’s tenure as chief executive. Apple’s revenue was $274.5 billion. iPhone sales accounted for $137.8 billion of that. The first iPhone was released in 2007.




Mac revenue was $28.6 billion last year. The computer was first sold in 1984 as the Macintosh. The brand name was shorted to Mac in 1998. The first iPad was released in 2010.

Cook can take credit for much of Apple’s portfolio of wearables, home products and accessories. This includes the Apple Watch. However, none of these individual products contributes considerably to Apple’s revenue. As a portfolio, the revenue from this segment was $30.6 billion last year.

Arguably, Apple’s biggest success in the past three years is its services business. Its revenue for the 12 months that ended in September was $53.8 billion. However, the heart of this part of Apple is well over a decade old. Its foundational parts include iOS and iTunes, which are over 10 years old. Granted, new products like Apple TV and Apple Pay have been added.

An Apple car represents the company’s chance to move into one of the largest consumer product sectors in the world. Global auto industry revenue will hit $2.7 trillion this year. That figure is expected to reach $3.8 trillion in 2030.

A great deal of the growth in the auto industry will be in the electric and autonomous vehicle segment. Some U.S. states and a number of the world’s largest countries have mandated a move to environmentally friendly engines. China actively promotes the sales of zero admissions vehicles. The United Kingdom plans to ban the sales of fossil-fuel-powered vehicles by 2030.

One sign of how valuable electric and autonomous car products could be to Apple’s market value is Tesla. Its current market capitalization is $627 billion, although it will sell only 500,000 cars this year. Its revenue is dwarfed by Apple’s, and its market cap is 28% of Apple’s.

Reuters was the first media organization to post the news about Apple’s car. One key to the potential success of the project is battery technology that Reuters describes as “breakthrough.” Critics have pointed out the immediately evident hurdles. The infrastructure necessary for auto manufacture is huge, expensive and complex. That is not to mention marketing, distribution and support. However, Apple has manufacturing expertise matched by few companies and could outsource some of this. It also has brand recognition that may be superior to any in the world.


The chances of Apple’s success received a visible endorsement from Volkswagen. Bloomberg quotes its CEO, Herbert Diess, as writing about Apple’s “practically unlimited access to resources.”

Electric car sales could reach 20 million worldwide by 2030. The battle for market share will be furious. Tesla leads the market already. Every major car company in the world wants to be a leader as consumers migrate away from gasoline-powered cars.

Apple’s chances to do well in the electric vehicle market are as good as any company, particularly if it has a next-generation battery technology that has not been matched by other manufacturers. Cook has started down a road that will take Apple well beyond consumer electronics products and services.

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