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The Beaten road

Beats gives Apple foretaste of car-making woes

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Richard Beales
The iPhone maker is recalling 233,000 speakers made by the firm it bought last year. Apple has dealt with faulty goods before. But the scale of the recall and the reason, fire hazard, may underline for Chief Executive Tim Cook one of the challenges of joining the auto industry.

Reuters and other news outlets have gathered anecdotal evidence that Apple may be working on an electric car. And the company is certainly interested in filling vehicles with electronics that tie in with its other products. Jeff Williams, Apple's senior vice-president of operations, last week called them "the ultimate mobile device."
 
Until now, Apple has only had to deal with faults that cause annoyance and inconvenience to its customers - not real danger. These include everything from dodgy on/off switches to batteries that run down too quickly and a Maps app released before it was up to the task.

What has prompted the Beats recall, though, is the potential for the speaker units to burst into flames thanks to overheating batteries. As with car faults, that raises the possibility of a calamitous outcome.

It's a reminder that new products bring new risks, especially when a company lacks tight control over the manufacturing process. Cook will have been reading other news reports too. Recent airbag faults have forced car-parts maker Takata to recall 34 million vehicles in the US alone. General Motors recalled almost as many after last year's faulty ignition-switch fiasco prompted the company to take a broader, more conservative look at the road-worthiness of its entire fleet.

Fixing even small flaws can be costly, with GM putting the total 2014 expense of repairs, compensation and other expenses at $4.1 billion. That would be a drop in the bucket for Apple, which had $194 billion in cash at the end of the last quarter. The reputational cost of potentially lethal glitches, though, would be far higher than the damage caused by an app that sends users the wrong way at a junction.

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First Published: Jun 04 2015 | 9:21 PM IST

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