- Apple may not seek a partnership with a major automotive company, reports Bloomberg.
- The company could use a contract manufacturer to assemble its cars, while outsourcing its own parts.
- Foxconn and Magna International may be likely to partner with an Apple car, according to Bloomberg.
- See more stories on the Insider business page.
Apple is considering working with a contractor to find its own car parts and assemble them, a strategy that would not involve partnering with an automotive company, according to a new Bloomberg report by Mark Gurman and Gabrielle Coppola.
If it decides to go that route, the technology company would be employing a strategy similar to its approach to making the iPhone, which would leave out the big automakers, with which Apple has been talking in recent years.
In the past few months, there has been a lot of speculation about which company Apple might choose to partner in the development of its first car, which is codenamed Project Titan.
In December, Reuters reported that Apple was planning to launch an autonomous electric car by 2024, but speculation about Apple cars dates back to 2014.
This year, Apple’s negotiations with major automakers appear to have reached an impasse so far, but Bloomberg says contract makers Foxconn and Magna International are the main candidates for a potential car partnership with Apple.
Apple is in talks with several companies, including Hyundai and Kia. Bloomberg reports that the company even met with Ferrari last year, but that the negotiations have gone nowhere. A deal with a major automaker would require Apple to convince a major automaker to manufacture a product that could end up being a major competitor to the automaker’s own offerings, which Bloomberg reports was a difficult sale.
If the technology company employed a tactic similar to the iPhone manufacturing process, it would be able to avoid building its own factories and could acquire its own material, while avoiding depending on a potential competitor.
Magna was reported to be in talks with Apple when the company first expressed interest in creating a car years ago. The manufacturer also assembles cars for several automakers, including BMW.
On Tuesday, BMW’s chief financial officer, Nicolas Peter, told Bloomberg that he is not concerned about competing with Apple.
If the tech company launched an electric car, it could hurt the margins of other automakers, including Tesla. The car, entitled “Project Titan”, would allow Apple a slice of a $ 10 trillion market, according to Morgan Stanley.
In January, analysts at Morgan Stanley said that an Apple car could also bring financial ruin, especially if the company follows its current business model, which is more vertically integrated than many other automakers.