Managers from the company's iPhone unit are leading employees in automotive research projects at a secret Silicon Valley lab, according to a report in the Financial Times Friday.
Apple designers have met with executives and engineers at auto makers and in some cases recruited them, including the head of Mercedes-Benz's Silicon Valley research and development division, the report says.
If Apple is indeed building a car it will quickly run into one of its biggest rivals -- Google, which is far along in its development of an autonomous vehicle. Traditional automakers are also getting smarter about incorporating technology in their vehicles. Chevrolet's cars can come with built-in LTE hotspots, and in January Audi ferried journalists from Silicon Valley to Las Vegas in a self-driving car.
But the idea of Apple as an auto maker was met with some skepticism. The Financial Times quoted a senior industry figure who doubted Apple would make a car when it doesn't even manufacture its tech products - that work is outsourced to companies such as Foxconn.
Still, given the engineering and design background of Apple's hires, another source allowed that a car could be in the works.
Thus far, Apple's interest in the auto industry has been limited to CarPlay. The software allows components of iOS, like the Siri and iTunes, to be controlled through a car dashboard. Volvo and Volkswagen have offered the technology in vehicles.
Apple could of course team up with an auto maker to develop a car. Google might pursue that course as well as its vehicles get closer to release. The search giant has talked to Ford, General Motors and Toyota, among others, to decided whether to build the car itself or provide its software and technology to others.
Apple didn't respond to a request for comment.
Fred O'Connor writes about IT careers and health IT for The IDG News Service. Follow Fred on Twitter at @fredjoconnor. Fred's e-mail address is fred_o'connor@idg.com