NEW YORK (The Street) -- No competent automobile industry executive is likely to underestimate or dismiss the reports - not yet confirmed officially - that Apple (AAPL) - Get Report  is working on a car.

Misguided skepticism about Google's (GOOGL) - Get Reportself-driving car project already abounds. A frequent dig in the auto industry is: "Google doesn't build cars and doesn't know anything about building cars."

Yes, Google is mainly a software company better versed in programs that crash than vehicles that do. It's okay to question a programmer's ability to bend metal, though it could be a colossal mistake to underestimate either of these two Silicon Valley enterprises.

Cupertino, California-based Apple, whose sensational consumer products include iPhone, iPad and MacBook, may hold the potential to be more formidable competition than Google to auto industry incumbents.

Apple, first of all, possesses prodigious capital, with cash and cash equivalents of $32 billion in fourth quarter and shareholder equity of more than $123 billion. Those, plus the world's largest market capitalization, indicate a very strong ability to enter capital intensive business such as auto making.

Its CarPlay infotainment format has begun appearing on automobile dashboards. And the company commands admiration from consumers worldwide. A universe of potential automotive partners is slavering to partner with Apple and furnish any expertise it needs to start building cars.

Many of the world's brightest engineering and design talents no doubt are eager, too, to design and plan a car that inspires the same avid devotion and loyalty as Apple's other products. Indeed, Apple is reportedly attracting some of Tesla's brightest engineers from nearby Palo Alto. Tesla's(TSLA) - Get Report customers could be next.

"Given the way Apple CEO Tim Cook has run the company, it seems likely that Apple will follow its existing model of only offering premium products where it can charge higher prices and earn some decent margins," said Sam Abuelsamid, a senior analyst for Navigant Research in Boulder, Colorado. "In this scenario, the first company to feel the pain of an Apple car is Tesla Motors, followed by the German premium brands, BMW, Daimler's Mercedes-Benz and Volkswagen's Audi."

The Apple project, code-named Titan and populated with hundreds of workers, supposedly is working on an electric minivan, the Financial Times reported, citing people familiar with the company. Its choice of vehicle category -- if the story is true -- seems odd since minivans represent a category quite out of fashion at the moment. Only a few automakers still build them.

But Apple planners and engineers may envision a minivan comeback. Or perhaps they're designing something truly groundbreaking, in terms of packaging of space, energy efficiency and, of course, connectivity to the Internet. Legions of loyal iPhone users might be only too willing to consider an iVan unlike anything on the road.

Investors might question why Apple is interested in investing in a business that produces profit margins between 8% and 10% on a good day, compared with margins of 30% and more for its current array of products.

One likely answer is Carl Icahn, king of the activist investors, who thinks that Apple stock trading at a record high of more than $124 a common share remains grossly underpriced. In Icahn's view, Apple should be trading at about $216 a share.

"This is why we continue to own approximately 53 million shares worth $6.5 billion, and why we have not sold a single share," Icahn said in a letter to his Twitter followers, as reported by Reuters last week.

Cook must keep deploying capital in an effort to expand Apple's sales and fulfill investors' expectations, which means expanding the company's vistas into unexplored markets such as automobiles. Otherwise, he likely will hear louder demands to increase share buyback programs, pay out higher dividends and take other steps to return investors' capital.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.