Why Apple Is Tinkering With Cars

This week's biggest rumor is news that Apple is developing a driverless, electric car.

Whatever happens, this story is not really about a driverless car, but something more immediate. Something bigger.

Let's quickly review the driverless car scene to eliminate it from the conversation:

I'll begin with the premise that the driverless car is inevitable and the only real debate should center on the timeline. Will it be in a decade? Sooner? Later? Eventually the world will be dominated by driverless cars. It will be seen as a societal change. This will be despite a massive backlash that will occur against the technology for a variety of reasons. The backlash should delay the car for decades.

You see, when analyzed objectively, the driverless car will become a commodity and actual ownership will be unnecessary. It will be replaced by car sharing, which means fewer cars sold. Ford, GM, and Toyota know this. Everyone knows it.

As various states allow driverless cars on the road, the likelihood of a horrendous accident will increase, resulting in hand-wringing and staged complaining. I say "staged" because the car companies, which will have to produce these vehicles, all know that it is not in their best interest to make a market for transportation like this.

Another backlash will occur from major municipalities. They will lose hundreds of millions of dollars in parking ticket revenue, traffic violation revenue, etc. Look up these amounts in various large cities. The numbers are huge.

Driverless cars will eventually be banned from places like San Francisco because of the massive revenue losses. This alone will hold up any kind of complete switch-over. It could take 50 years if resistance mounts. And it will mount. Because money is involved.

So why is Apple even bothering? The driverless car, when examined objectively, is a political hot potato.

First, Apple has been interested in finding other uses for its operating systems. Knowing it has expertise Google can't match, Apple realizes that research for a driverless car will result in an excellent patent portfolio. Now is the time to develop the intellectual property of the future.

Second, this is a poke directly in Google's eye with a sharp stick. After all, Google stole the iPhone idea and developed the primary competitor to the iPhone in the form of the Android operating system. Retribution.

Third, Apple knows that the "connected" car is the next big thing. Apple could dominate the fancy connected software found in most cars today. This seriously began with Microsoft Sync.

Fourth, like it or not, the computerized fly-by-wire car is the future of the automobile as it moves towards a self-driving model. Apple can do all this work now. Perhaps its research on the driverless car is actually research on the future of the automobile. It wouldn't have to get into the business for years.

After all, is automobile manufacturing an industry that Apple wants to be in?

Apple, with its cash in the bank and market cap of over $700 billion, could easily buy any of the car companies. Easily. The most obvious would be Fiat-Chrysler, which Apple could buy outright. It could easily leverage a deal to buy GM, too.

Whatever Apple picked, just imagine what it could do for that vehicle brand. With some of the top designers in the world working for Apple, their talents could be re-directed towards creating a tour de force of vehicular design and features and coolness.

Just imagine a Dodge Caravan completely designed by the Apple designers. Hello, cool soccer mom! Who knows what they'd do with the Dodge Viper.

What other reason would Apple have to be screwing around in the car space?

With Apple stock creating an outrageous potential for leveraging big deals, maybe it's time the company did something big. This would be gigantic. It's the only thing that makes sense.