How Apple Scaled Back Its Titanic Plan to Take on Detroit

The biggest challenges were being extremely energy efficient to get acceptable battery life out of a tiny battery, and being extremely data efficient to get acceptable costs from expensive cellular carriers. People pointed out, and rightfully so, that Apple wasn't good at either.

They didn't anticipate that Apple would build a phone that was basically a thin shell around a (relatively) huge battery, or that they'd manage to convince a major carrier to offer an "unlimited" data plan. Suddenly, the stuff that the incumbents were good at didn't matter that much.

I don't see any way to do an equivalent move in the automobile industry. I don't think there are any areas that everybody is failing to fundamentally rethink, the way they were with energy and data usage a decade ago, where Apple could jump in and change the whole game. But I wouldn't bet money on it....

They are obviously mass produced, as they are consumer electronics, not boutique items.

They still cater to the high end of the laptop/desktop market (which is not the same as the "gamer laptop" or the "high end 20-core rendering workstation" niche market).

What competition do you think they have at that?

They are if not the most, some of the most well designed, well thought out, and innovative custom solutions (from heat dissipation to machining and assembly). The parts they use are the cream of the crop of the respective yields too -- when they mass order Samsung SSDs or AMD cards or memory, they get the best production runs. They don't use the most screaming, 1000 watt, 2-fans greatest speed AMD/Nvidia cards, but for the ones they do use, and that fit the energy/power profile they want to have in their boxes, they use their mass purchasing power to get the best units.

Margins is super complicated. iPhones don't cost more than Samsung flagships -- Apple's margins seem to come mostly from controlling manufacturing costs. Could Apple assert similar control over manufacturing costs for cars? Maybe! But maybe not. Cars are more complicated than phones.

If a margin inflation gets passed along to consumers, well, there are more people willing to pay an extra $200 (compared to a lower-cost competitor) every few years to have an iPhone than there are people willing to pay an extra $20,000 every few more years to buy an iCar -- just because it's a lot more money. And to be clear, $20,000 is an equivalent margin to the $200, scaled up for costs.

Macs have always historically been high-end and Apple's marketshare has historically hovered around 10%. Apple has come to dominate the high-end computer in recent years ― specifically the high-end laptop segment; at one point attaining 90% marketshare of laptops priced over $1,000 ― but that peak has receded and Apple never did penetrate the desktop market as much (which is another important segment foe high-end computers)

On the other hand, Apple's first mobile device (the iPod) was decidedly mass market and mass produced as Apple offered products for every price and segment ending up with over 70% marketshare for ALL mp3 players.

The iPhone is an interesting inflection point. Like the iPod it started out priced at the high end but Apple didn't quickly followup with cheaper products for all segments. Why not? The reason instead is that Apple went the mobile carrier subsidy route. The iPhone is mass market, mass produced and has ~50% marketshare in USA. However in markets where carrier subsidies aren't the norm e.g Europe, Apple has less than 20% marketshare.

Guess which other major technology purchase receives subsidies/payment plans? Cars. Apple could feasibly sell 'high-end' cars on mass market contracts and still retain their margins. However car manufacturing is very hard and Apple doesn't have any leverage from their existing products to force an advantage from the car parts factories...