Please go watch Bloomberg Television’s interview with Apple CEO Tim Cook. One exchange particularly grabbed me because Cook gave a rare peek behind Apple’s curtain. Apple is typically hush-hush. Last July, when every form of life on Earth knew Apple was six weeks away from releasing a new iPhone, Cook wouldn’t acknowledge it. “I don’t want to talk about phones that aren’t announced,” he told a stock analyst. Mind you, Apple Inc. had unveiled overhauled iPhones in September or October in each of the previous five years.
Apple’s Spending on R&D in the last year – $10.8 billion. That’s Apple. Many companies are secretive, but Apple’s air of mystery is more mysterious than most.
That’s why it was so odd to hear Cook tell Emily Chang that his company is working on technology that could power self-driving cars or other things. And yes, that wasn’t a secret. You’ve been reading on Bloomberg about Apple’s automotive ambitions for a while now, and the company had to apply for public permits from regulators to test-drive its autonomous car prototypes.
Still, it was unusual for Cook personally to give more than a hint of what Apple is cooking in its laboratories, and it’s intriguing to ponder why he felt motivated to be a bit more revealing now. Let me offer a couple of semi-educated guesses about Apple’s possible motives.
Apple knows it can’t go it alone in cars. It takes a village to make an iCar. If Apple winds up making the underlying software and systems for driverless cars, it most likely needs a coalition to bring them to life. Apple must work with automakers, car parts makers and regulators. It needs cooperation among disparate Apple product groups and it needs to win over the driving public. To do all of that, it’s helpful to say out loud what you’re working on.
Apple wants credit for innovation. Cook in another recent interview said Apple didn’t get enough credit for its role in artificial intelligence, one of the cornerstone technologies of self-driving cars, because the company doesn’t talk about its plans for the future. Cook said Apple doesn’t “sell futures” as other companies do. Then in the Bloomberg interview he … dabbled in future selling.
By keeping itself in the conversation about self-driving cars, Apple, which has so far been a laggard in this emerging field, can build credibility with technologists. It may also get some slack from investors who are scrutinizing Apple’s recent spending surge on research and development, to $10.8 billion in the last 12 months.
It wouldn’t hurt, either, if Apple’s valuation got a little of the fairy dust from Tesla Inc. The carmaker’s shares trade at a stratospheric 65 times Tesla’s estimated adjusted earnings for 2019. Apple is trading at 13 times analysts’ fiscal 2019 expected earnings under generally accepted accounting principles.
It’s still not clear what Apple will actually do with autonomous technology or how it might make money doing so. “We’ll see where it takes us,” Cook said. That’s fine. The world doesn’t need full disclosure from Apple. Just a few hints will do.