DEAR MR. BERKO: I think that the driverless car being developed by Apple is the car of the future and that this will produce more profits for Apple than the iPhone, the Apple Watch and the iPad. There are so many advantages to driverless cars, and I don’t understand why the Big Three are not actively making them. Dealers should be selling them by 2020, and I want to buy 60 shares of Apple. I think Apple will take off because profits from these cars will be tremendous, and Warren Buffett knows that. Don’t you agree? – PE, Buffalo, N.Y.
DEAR PE: I can only please one person per day. Today’s not your day, and neither is tomorrow. Frankly, if I agreed with you, we’d both be wrong, and so would Mr. Buffett.
Self-driving cars?! Bah, humbug, balderdash, poppycock and baloney! I may be as wrong as that flying Irishman Doug Corrigan, but I think driverless cars, autonomous vehicles or whatever they’re called will have the road life of a Yugo. The initial response will be positive, as it was with the Apple Watch. The fanfare, trumpets and media excitement will be awesome. But the added $70,000 costs (that’s the stripped-down model) for engineering, computer requirements, software and sensors will be prohibitive. Frankly, I’d be uncomfortable transferring my driving responsibility to a computer that can wink out and place me in a more dangerous situation than I would be in if I were driving the car myself. Driverless car sales will take off like a rocket and then fizzle and flatline.
There are five things most Americans won’t give up: beer, pizza, televised sports, paid holidays and their cars. Most Americans are extensions of their cars. We brag: “My ride zooms from zero to 60 in six seconds.” “Listen to those awesome pipes.” “This baby will do the quarter in 13 seconds.” “Watch her take this corner.” “Feel that torque at 40 miles per hour.” We anthropomorphize our cars, and they have become our nation’s sex symbol. You won’t pick up a chick in a driverless car (unless she’s 85), but you can in a red Trans Am. You won’t impress a lady with a Civic, but she’ll smile if you pick her up in a yellow Corvette. Most of us will enjoy putting the pedal to the metal and then hearing the growling turbo as it passes Grandma’s driverless car creeping the interstate at 55 mph. Our cars and how we drive them define who we are or who we’d like to be. For decades, Americans have had love affairs with their cars. The car, its performance and speed, has been embedded in our egos, our pop culture and our national history since the early 1950s. Cars’ mechanical testosterone suffuses drivers with the intoxicating feel of power and freedom. Turn on the ignition; you can figuratively stroke the power that can be dialed up on demand. Driverless cars are for left-wing liberals, wusses, wimps and milksops who proudly putt-putt to the museum or the tearoom while tediously minding every driving rule in the handbook.
Tim Cook, who some believe will be the next CEO of IBM, is off his bloody rocker, wasting Apple’s (AAPL-$94) resources on another product that will fail like the “hockey puck” USB mouse, the G4 Cube, the Newton, eWorld, MobileMe and the Bandai Pippin. AAPL’s driverless car expects to debut in late 2018 or early 2019. The media frenzy, advertising hype and hoopla will be an extravaganza of biblical proportions. And for part of the year, Apple will encourage investors to believe they’ve got a Golconda as fashionistas, the glitterati and other prominents queue up to buy these cars and garage them. To give the impression of high demand and ensure continued hype, AAPL may even invent a waiting list. Then, like AAPL’s numerous other market failures, the “driverless” will vanish into the ether with the Edsel, the Corvair, the Pinto, the Geo, the Saturn and the Aztec.
Buying AAPL based on the improbable success of driverless cars makes as much sense as washing your feet with your socks on. As Congress debates a multibillion-dollar funding program for driverless cars, my dad would remind me that “fools and their money have good parties.”
Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at email@example.com.