Apple is smart to be grabbing A123 engineers. While people seem to remember A123 for its auto pursuits, it also produced batteries for things like tools from B

Apple is smart to be grabbing A123 engineers. While people seem to remember A123 for its auto pursuits, it also produced batteries for things like tools from Black & Decker. The problem with cars was that no auto manufacturer wanted to make themselves dependent on a single source for batteries. If someone built a car around A123's batteries, that put them in a bad position. If A123 had difficulty producing the volume needed, there wasn't an alternative. Similarly, it would give A123 incredible pricing power at the end of the contract term. For a company like Black & Decker, they could offer a premium tool line based on the batteries, but they would still be selling lower-cost tools with less battery life or more weight. With a vehicle, altering the range or weight is a much bigger deal. If Apple can increase the power density of the batteries in iPhones or MacBooks, that's a big win for them. "Solving" transportation is a very attractive problem and everyone seems to want that. But better batteries have much easier applications. Apple may be working on a vehicle, but if Apple can increase its battery power density by even 30% that gives them a huge advantage in their core markets (phones, tablets, and laptops). That's a much more modest increase than A123. If Apple's battery efforts work well in their current devices, one can see how an electric car might eventually happen. But hiring people from A123 can directly help the markets where Apple makes so much money today. Maybe electric cars are in Apple's future, but even if they aren't, batteries definitely are.