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How Apple Scaled Back Its Titanic Plan to Take on Detroit

bloomberg.com

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Re: How Apple Scaled Back Its Titanic Plan to Take on Detroit

#41

Post by ChemicalWarfare »

The dilemma here is this - make your own car or partner with a manufacturer.

Partnership means smaller profit margin in a very tight market. The Big 3 for example barely make any money when selling cars (as opposed to pickups) these days, so to get a reasonable margin the price would need to be jacked up...

Making your own - the barrier to entry in that industry is VERY high which the article kind of alludes to talking about how it's hard to find suppliers willing to sell small batches of parts etc. There's a reason there aren't that many auto manufacturers around, and the ones that are out there aren't exactly the kinds of revenue generating machines as apples and googles of the world.

Re: How Apple Scaled Back Its Titanic Plan to Take on Detroit

#42

Post by applecarcont »

AppleCarThrowAw wrote: post #35
applecarcont wrote: post #25

Earlier quoted context omitted.

The interesting question is what has Jony Ive been up to? The Apple Watch needed a design reboot (and the Edition is practically dead) and now supposedly so does the Apple Car (at his behest[1]). A third iteration of the iPhone design and no new Macs designs (yet). He/Cook seized power from Forstall but there's been little outright success/breakthroughs to show since then [1] http://appleinsider.com/articles/16/01/25…

From what I've heard (and take this with a pyramid of salt because it's an anonomous internet comment) Jony Ive is essentially on a sabbatical and hasn't been seen on Apple's campus since before Summer. If I had to guess, he wants to leave Apple, but is staying on either until some unspecified product reveal or because he has to wait-out stock options or something.

He wasn't at the Fall iPhone event iirc...

Re: How Apple Scaled Back Its Titanic Plan to Take on Detroit

#43

Post by twoodfin »

mikeash wrote: post #32
csydas wrote: post #27

Earlier quoted context omitted.

Please excuse typos as I am on phone in the metro I appreciate that a lot since I was one of the naysayers. Admittedly I was a bitter PPC Mac user upset that we weren't getting attention on the desktop side but I was still worried. However, even if hindsight is 20/20, I do feel that a lot of the infrastructure and resources necessary for an iPhone were just there already and apple seized an emerging market. With cars…

I don't even think the naysayers were particularly wrong. Apple succeeded by fundamentally changing what a smartphone was, not by beating Blackberry and Nokia and such at their own game. 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 r…

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.

I'd reword your first challenge as moving what had been theretofore a desktop OS onto a handheld device with acceptable performance/power consumption. Once that was done, it provided massive leverage for Apple over any of their competitors due to the maturity and flexibility of their toolchain, as well as a wealth of developers both inside and outside the company who could exploit it.

Re: How Apple Scaled Back Its Titanic Plan to Take on Detroit

#44

Post by hiringmanager »

AppleCarThrowAw wrote: post #35
applecarcont wrote: post #25

Earlier quoted context omitted.

The interesting question is what has Jony Ive been up to? The Apple Watch needed a design reboot (and the Edition is practically dead) and now supposedly so does the Apple Car (at his behest[1]). A third iteration of the iPhone design and no new Macs designs (yet). He/Cook seized power from Forstall but there's been little outright success/breakthroughs to show since then [1] http://appleinsider.com/articles/16/01/25…

From what I've heard (and take this with a pyramid of salt because it's an anonomous internet comment) Jony Ive is essentially on a sabbatical and hasn't been seen on Apple's campus since before Summer. If I had to guess, he wants to leave Apple, but is staying on either until some unspecified product reveal or because he has to wait-out stock options or something.

Apple Kremlinology is a hobby of mine. I have seen a lot of little data points that support your hypothesis. Ive has a house in London, his family is in England. He brought in a major designer recently-a friend that was played off as a partner, but might well have been him naming his replacement. He does not appear in any keynotes, but does appear in videos- or used to. This is in decline as well. (which is good because he was getting stale. "we stripped it down to the essential of what is a [timepice/phone/car] and once you remove what's unnecessary blah blah".

I believe that a creative type like him has trouble operating under the demands of a corporation like Apple at that level, and that he did so for so long because his collaboration with Jobs was very intense and personal, and that this is not something he can have with Cook. Under Cook he is supposed to be the one who replaces Jobs in that role (while Cook is an execution guy.)

I believe he is participating and staying around only so long as necessary to get things ready for him to leave.

He's earned a retirement and some time to follow interesting design work that is not relevant to Apple's business.

Re: How Apple Scaled Back Its Titanic Plan to Take on Detroit

#45

Post by hiringmanager »

aetherson wrote: post #36
coldtea wrote: post #18

Earlier quoted context omitted.

Low margin? They wouldn't be making Yugos. Like with their laptops and such, they'd be targeting the higher end of the market. Cyclical is also great -- that's exactly what the laptop and especially the phone market are.

I don't think he means "cyclical" like "they obsolete themselves quickly so you have to buy a new one," but rather "cyclical" like "when the economy is down, people just hang on to the car they have for 5+ more years rather than buy a new one." 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 si…

ICE cars are more complicated than phones, but I'm not sure pure-electric cars are that much more complicated.

One of the nice things about the electric car business is the the part count is a lot lower, they are basically much simpler devices, and thus should be able to be made much more cheaply.

We may see a Yugo level electric car for $10,000 in a few years.

This would allow for margin expansion, especially if Apple can innovate in the manufacturing side (eg: go one better on automating the factory)

Plus since currently a Toyota RAV4 level vehicle goes for $30k-$40k, if Tesla gets down to the low $30k, Apple could produce a car for the $40k price point and be making $10k-$15k profit on each one.

Lower gross margin than the phone business, but offers the opportunity of significant revenue upside.

Plus with Apple there would be follow on revenue as well.

Since people are in the habit of paying mid $30k for a car right now, while there will be cheaper electric cars at the lower end of the market, Apple wouldn't require people to change behavior to be able to afford a car that gives Apple the kind of margins it wants.

Plus I expect there will be several innovations that are things "only apple can do" that add value-- the interiors of cars and especially the electronics and instrumentation of modern cars are terrible. Even the Tesla which tried a new approach, I think has bad usability. There's a lot of opportunity there.

Re: How Apple Scaled Back Its Titanic Plan to Take on Detroit

#46

Post by aetherson »

hiringmanager wrote: post #45
aetherson wrote: post #36

Earlier quoted context omitted.

I don't think he means "cyclical" like "they obsolete themselves quickly so you have to buy a new one," but rather "cyclical" like "when the economy is down, people just hang on to the car they have for 5+ more years rather than buy a new one." 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 si…

ICE cars are more complicated than phones, but I'm not sure pure-electric cars are that much more complicated. One of the nice things about the electric car business is the the part count is a lot lower, they are basically much simpler devices, and thus should be able to be made much more cheaply. We may see a Yugo level electric car for $10,000 in a few years. This would allow for margin expansion, especially if App…

The fundamentals of electric engines aren't very complicated. Manufacturing an actual all-the-bits modern luxury electric vehicle is way, way, way more complicated than making a phone, and also hard in a very different way than making a phone.

One of the things that has made me never really believe in Apple's competitive advantage with cars is that beyond an ultra-high talking points level ("design!"), I don't see any reason to believe that Apple has relevant expertise.

Re: How Apple Scaled Back Its Titanic Plan to Take on Detroit

#48

Post by samfisher83 »

maxerickson wrote: post #16
samfisher83 wrote: post #10

Earlier quoted context omitted.

For all the hate GM get the EV1 was way ahead of their Time. Its sad that GM didn't have the leadership that supported that effort. We would probably have viable low cost EVs by now.

What's the path they would have followed? The battery in the EV1 was crappy and expensive, is the thesis that billions of automotive dollars would have accelerated progress in battery research? Is it useful to lose money producing electric vehicles while doing that research?

Usually you have to spend a lot on research to make advancements. You have to experiment with different materials.

Re: How Apple Scaled Back Its Titanic Plan to Take on Detroit

#49

Post by evo_9 »

rdlecler1 wrote: post #2

Making cars, while a hard problem, isn't as hard as making cars self driving. Seems sensible to master the second first.

Not only that but it positions them better. If they were to develop the defacto standard in autonomous driving systems they could then license it to anyone they want, use it in their own offering and even use the technology in other markets such as robotics.

Re: How Apple Scaled Back Its Titanic Plan to Take on Detroit

#50

Post by mikeash »

twoodfin wrote: post #43
mikeash wrote: post #32

Earlier quoted context omitted.

I don't even think the naysayers were particularly wrong. Apple succeeded by fundamentally changing what a smartphone was, not by beating Blackberry and Nokia and such at their own game. 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 r…

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. I'd reword your first challenge as moving what had been theretofore a desktop OS onto a handheld device with acceptable performance/power consumption. Once that was done, it provided massive leverage for Apple ov…

It's both. They shrank their OS down to fit on a handheld device, but they also massively expanded what a "handheld device" could do. After the iPhone was announced, RIM supposedly couldn't figure out how Apple could possibly be doing all this fancy stuff and still have acceptable battery life. The answer, of course, was that they just made a gigantic battery. Amusing post about it here:

http://www.edibleapple.com/2010/12/28/rim-was-in-disbelief-f...

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