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Glaring flaw in Apple car hype-gasm: The iGiant likes to make money

Cupertino's idiot tax doesn't carry over to autos – in-dash system more likely

Despite rumblings of secret research projects and hiring sprees, Apple is not going to be building its own cars anytime soon, says one analyst.

Edison Investment Research analyst Richard Windsor told The Register that Apple's preferred model of high profit margins wouldn't translate well into the world of auto manufacturing.

"Apple typically makes around 40 per cent gross margins on the hardware that it sells, and to start making cars would probably have a devastating effect on its gross margins," Windsor explained.

"This is because the auto industry is just not that profitable, and in many cases car companies make far more money on the financing surrounding a car purchase than from the vehicle itself."

This amidst ongoing rumblings that Apple is working on a mystery auto project. Various reports have noted the Cupertino giant hiring away engineers from Tesla and looking to purchase time at a Bay Area testing ground for autonomous vehicles.

Windsor believes these moves are merely part of an effort by Apple to develop an in-dash platform that could be integrated with cars from other manufacturers, rather than any sort of Apple-branded vehicle.

In that case, says Windsor, the Apple platform could make up the "infotainment" portion of the car, providing the mapping, music, and video features and integrating with Apple's own iOS phones and tablets in the process.

This, the analyst reckons, would allow Apple to step further into the auto market without having to sacrifice its lucrative business model or spend out on massive manufacturing plants. At the same time, however, Windsor cautioned that both Apple and the automakers will have to strike a delicate balance to provide integration without sacrificing their own independence and ability to work with other companies and products.

"This will require the cooperation of the automakers, as all of the critical interfaces are completely proprietary," he explained.

"Without their cooperation, any infotainment unit produced by Apple will be little more than an iPad glued to a dashboard."

Currently, the talk of an Apple auto product, whether a car or a dashboard system, is purely speculative. Cupertino has yet to reveal any plans to build on CarPlay, and there has been no talk from the manufacturing side on any plans to begin work on hardware units. ®

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