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Apple's Car Could Be At Least 10 Years Away

Apple's Car Could Be At Least 10 Years Away

All signs indicate that Apple Inc. (NASDAQ: AAPL) is at least experimenting with the idea of building its own car-related technology, if not actual automobiles.

In a lawsuit filed earlier this year, A123 Systems accused Apple of poaching employees to develop a large-scale battery division. More details are beginning to surface now that the two firms have agreed to settle.

The latest tidbit reveals that A123's former CTO, Mujeeb Ijaz, worked on batteries for Formula 1 race cars before joining Apple.

This gives credence to those who assume Apple wants to develop its own automobile, but is this enough evidence to jump on the Apple car bandwagon?

"I think driverless cars are one of the long-term areas we can see Apple, as well as other technology companies, heading," FBR Capital Markets analyst Daniel Ives told Benzinga.

Cody Willard, chairman of Scutify and Futr, does not expect to see Apple release an automobile for roughly 10 years.

"I think people are missing the boat when they think Apple is gonna start building cars," Willard told Benzinga. "Apple is trying to get into the dashboard. [That's why] BlackBerry would be a fit for them. But I don't think there's any actual Apple car anywhere on the horizon for the next nine to 10 years."

Related Link: Are Apple And Tesla Secret Partners?

Batteries Are Still A Possibility

Willard may not be sold on the Apple car rumors, but he thinks the company could be interested in designing its own batteries.

"I think we very well could see Apple someday get into designing their own batteries for their devices, much like they do their chipsets," he said. "But I don't think Apple is ever going to get into the retailing batteries or car batteries business."

Willard said he has followed A123 Systems when it was public and shorted it all the way into its bankruptcy.

"It's great technology but I don't think Apple or A123 wants to be in the business of competing with Tesla on car battery technology right now," he added.

Monetary Benefits

When asked why Apple would bother getting into a market as small as the car dashboard, Willard said it was "just part of the Apple ecosystem."

"The car vendors themselves might pay licensing fees to Apple," he concluded. "If they do so, the margins would be very good because it's mostly a software thing that Apple would be selling them -- the operating system itself. I would think Apple is going to have a real high margin, software-type business model for the car dashboard."

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.


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Posted-In: A123 Systems Cody Willard Daniel Ives FBR Capital Markets FutrAnalyst Color Exclusives Tech Best of Benzinga

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