Hyundai Motor says it is in early talks with Apple
reuters.com
reuters.com
This makes no sense whatsoever - Hyundai Motor has a strong labor union with a long history of frequent and drawn-out strikes: http://www.koreaherald.com/view.php?ud=20200426000206 . So it's a complete nonsense to mention the labor union as a possible reason to avoid US automakers and choose Hyundai.
Hyundai's assembly line in the US seems to be in Alabama:
Furthermore, non-unionized partners seem unlikely to be part of the criteria on the face of it, if you're attempting to build a presumably high-end product like an Apple car. If worker benefits deriving from union activity are a large enough threat to your product, it's unlikely that you're going to be able to command high margins on it, as Apple seems to do.
Lastly, while it's one of many minor concerns, perhaps, I find all of this quite implausible, given the stature of the Apple brand. It's a huge risk to potentially dilute the Apple image with a failed or likely initially not-quite-great partnership with a company like Hyundai. Why do that and not approach one of the dozens of other higher end manufacturers like Mercedes Benz, or BMW, that are likely wanting for battery tech anyway?
If the US becomes as civilized as every other OECD nation in terms of health provision, making it available to all residents and untying it from employment status, then the burden of that cost will be removed.
Basically all the bits which make a car valuable are outside any of Apple's competencies - transmission, suspension, air conditioning, heck even passenger seating and ergonomics.
The proposal is functionally Apple trying to buy from the ground up a whole new industrial function with near zero overlap to things they're actually good at.
Except for maybe passenger seating all of the things are commoditised by now, I think.
I hope they take a shot at it, because competition never hurts and they still (despite their size) deliver outstanding innovative products
Honda sells commodities. Maserati sells status.
Motorola sells commodities. Apple sells status.
Computers are commodities, smart phones are commodities and at the end of day none of that stops people from buying from apple
Cars make a ton of sense for apple because it’s a product which a decent percentage of people will all pay a premium to get the cool version.
But they don’t make very expensive stuff either, the type of stuff whose status is independent of its function, like the equivalent of $800 jeans. They’ve tried a couple times (gold Apple Watch for example) and it did not catch on.
So, I think it’s fair to ask what unique functionality Apple will bring to a car to differentiate it from all the other cars.
And from an internal perspective, Apple leaders have repeatedly said that they are only interested in new markets when they think they can have a transformative impact. So again, I think it’s fair to wonder what that impact might be. There’s undoubtedly more to their thinking than just slapping an Apple logo on a Hyundai.
I think the only real difference between entering car business compared to other categories Apple has transformed is regulation. Cars need to look and behave a certain way because of laws in many cases.
It's easy to buy some bolt-on aftermarket automotive product and attach it to your vehicle. Actually integrating that thing in a way that meets (sometimes conflicting) safety, reliability, manufacturing, cost, manpower, etc. requirements can be a special sort of hell that you wouldn't wish upon anybody.
For most workloads a normal person performs on their computer, the hardware is ridiculously over-provisioned. Most of it is idling 90%+ of the time, the utilized portion is mostly wasted in a sea of inefficiencies. Performance improvements of 100x are not uncommon. To simplify a bit - Apple's business model boils down to selling mediocre hardware at premium prices, and concealing that fact by a large amount of optimizations and polish.
Cars are nothing like that; they're already at their efficiency plateau. An improvement of 10% is considered astonishing. Cars are much more like gaming rigs - raw power is required there, the games are already reasonably optimized, and no amount of sleek design and UI polish would hide the lackluster price/performance ratio. There's a reason Apple is not in the gaming business.
For Apple to maintain their margins, they'd have to sell something like Nissan Leaf for the price of Tesla Model S.
So... doesn’t optimizing and polishing something make it a better product?
Because that's going to bat in the market that Mercedes, BMW and the like are already in. What is Apple going to uniquely improve via it's current core compentencies, as opposed to winding up where Tesla is: a fantastic on paper product that they can't deliver off the production line reliably, with fit and finish issues because they're a young manufacturer shaking out their production lines?
Hyundai can do these things, but they're already doing them. Where's Apple sit in there other branding which essentially makes the product a gimmick?
You don't want to qualify that statement to reflect the fact that Apple just become the clear leader in the market segment that cares about battery life, weight and computing performance?
But more importantly, they were integrating something obvious: people wanted an iPod that was also a phone, that was also a PDA. Which meant they got to carry one device, and they wanted that to work well. Apple as a computer manufacturer and software company did have core competencies across these fields.
Where is that for the automotive industry though? Apple have nothing to bring to the core issue of transportation which is transportation and their manufacturing expertise is in solid-state electronics, not the automotive supply chain (which is massive). They don't work with traction-scale systems, and they don't work with human enclosures or really any of the types of processes and problems which cars have. The only competency they bring is software, but as a company they don't have a safety-oriented engineering function (AFAIK) so the synergy is essentially "iOS but in the entertainment system".
Apples contribution is "the head unit", and maybe that's enough, but that's not an "Apple" car, and that's a problem - they'd be trying to build up a manufacturing capability from scratch and that takes time. It puts them behind Tesla in a race to execute, and as Tesla has been discovering you can't just automate your way out of a lot of the problems there.
Which leaves you at, what is an Apple car? It's rebadged Hyundai with an Apple headunit in it.
TONS of people saw the utility of the iPhone almost immediately. Camera phones we getter more and more popular, some phones were getting basic web browsing capabilities. When the iPhone was released everyone I knew was immediately interested.
The only ridicule from that era was about the price, Ballmer thought it was too high.
Making the analogy of the iPhone to a car is a huge stretch.
You really don't understand cars if you believe this.
Cars are second only to property in terms of the biggest investments someone will make in their lifetime. As such people decide what to buy based on a number of factors including "how it feels to drive" and "what this car says about me". Because in most cases they are sticking with that decision for a decade.
If it was based purely on the cheapest way from A to B then there would be no brands like Ferrari, Lamborghini, Aston Martin etc because they are based on desire rather than value. And if there's one company that understands desire it is Apple.
Those brands account only for a tiny fraction of the car market though. For the rest the cost of buying and maintaining a car is certainly a bigger fraction of the acquisition decision.
Apple sells an ecosystem as a brand. Whether you buy into the branding or the ecosystem is up to you. Their brand is about status, quality, privacy, identifying their customers as the people that buy their hardware and services, not people they can sell the data to.
Vehicles are about to become yet another electric/electronic device you own. In the same way that my mobile phone has a network of cell towers that someone sells me access to, I could see Apple doing that with charger providers.
If charging stations become self-provisioning, with local power generation and storage, then the cost of actual power transfer to my vehicle has a zero marginal cost.
So in the same way that my mobile plan is "all you can eat" in terms of calls (and data, mostly), I could see how vehicle charging could work the same way.
So buying a car becomes: 1. Choose a vehicle based on status, branding, equipment 2. Choose a vehicle "plan" based on usage
So in the same way as iPhones and iPads sell Apple Music, Apple Pay etc, iCar sells all the existing services, plus allows Apple to co-brand with electric networks. So think "Apple iCar and Shell EV, your safe and effective partners for travel".
When autonomous vehicles become available, you can integrate that autonomy into the Apple ecosystem, in the same way that Apple Maps learns your travel patterns and makes suggestions, Apple can use that data to send a vehicle to you when you "need" it.
The title would be more helpful if it included that information
I couldn’t process which way an acquisition would make sense and then I read the article and it made more sense.
There is already a presumption that "in early talks" means in discussion of possible acquisition/merger so I think this would be the time to deviate from the source's title.
Possibly like "Hyundai in discussion with Apple about electric car collaboration", or "Apple and Hyundai considering a joint venture for cars".
Oh you mean it isn't about an acquisition like the title sneakily implied?
> The title would be more helpful if it included that information
Do you really expect any better from these people? I pretty much expect clickbait headlines or misinformation from news, news wire, etc.
MacRumors has a statement from Hyundai saying, "We understand that Apple is in discussion with a variety of global automakers, including Hyundai Motor. As the discussion is at its early stage, nothing has been decided."
So, Hyundai has confirmed that Apple is talking with them, but they also said that they believe that Apple is talking with other car companies as well. At this stage, it doesn't seem like there's anything special about Hyundai. Rather, the news leaked about Hyundai while it didn't leak about other talks.
I'm skeptical of an Apple entry into cars, but it seems like it would make sense for them to contract out the manufacturing to an established player - as they do with their phones and laptops. It would allow them to create top-notch vehicles from day-1 with superb fit and finish rather than trying to build the plants and workforce to handle it. They might want to bring manufacturing under their own control eventually, but I think Apple would want to be able to offer Apple-quality vehicles to a mass market sooner than they could build that capability themselves.
This isn't a criticism of Tesla, but it took them a long time to get to where they are today. They were founded in 2003 and its first mass-market car (the Model S) rolled out in 2012. Even then, the Model S wasn't really mass-market. The Model 3 launched in 2017. Again, this isn't a criticism of Tesla as much as noting that it takes years (or decades) to launch a car company with large-scale manufacturing capability. Tesla's global capacity in 2020 was only 500,000 vehicles (our of a 92M vehicle industry).
Plus, even today, Teslas tend to receive some criticism for their fit and finish. My friends love theirs and say that it's like how the iPhone was a complete re-imagining of the phone. They also note gaps and things that make it feel less premium. I think Apple would like to avoid that.
If Apple can produce the designs and partner with another company to manufacture the vehicles, it could get to market a lot quicker with a higher quality product than if it tried to start manufacturing from scratch. There's a lot of politics and tariffs around cars and major companies like Hyundai have created manufacturing to make sure to avoid those tariffs. Apple would likely need American, Asian, and European manufacturing if they wanted to do a global launch.
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To switch gears a bit, the part of this story that seems really fishy to me is the idea that Apple has "breakthrough battery technology". That seems unlikely. Battery chemistry advances don't seem like an area where we see "breakthroughs" a lot and it would seem like something that would also appear in their phones if it existed. In fact, a big portion of the economy is run off rechargeable batteries at this point - people demand phones with bigger batteries, Tesla is doing everything it can to make batteries cheaper and better, VW/Hyundai/Kia/GM/Ford/etc. are all trying to get electric cars that work well, power grid storage gets talked about a lot...
To me, it seems like this Apple Car would be more about the experience of an Apple designed product than about breakthrough automotive technology. Elon Musk has said that electric cars aren't that complicated compared to internal-combustion cars and it seems like where Apple would do well would be focusing on the part that people buy their products for: the experience. That is, at least initially.
Initially, the iPhone didn't have any special hardware. While the iPhone might have special cameras or Apple-designed processors today, it was initially all commodity stuff that anyone could buy brought together by Apple's casing and software. Apple might want to design its own suspension or whatnot in the future, but it seems like an initial vehicle (for 2024) would be more about the Apple experience than about automotive tech.
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Personally, the auto industry doesn't seem like a great market. Tesla's market cap is enormous, but as people have noted, it's higher than the ten largest auto makers combined. Whether Tesla is worth its market cap can be debated, but it almost certainly isn't worth its market cap based on the automotive industry alone. If you're a Tesla bull who believes they'll become huge in electric grids, home solar, and a bunch of other industries, great. But when we're talking about Apple, we're talking about a company launching a bid to likely become a niche car company with the possibility of being worth $50B like BMW. It seems like a very big bet for an industry that isn't worth that much. Mazda is a $5B company. Subaru is a $16B company. Even Volkswagen is under $100B. Toyota is worth less than 10% what Apple is worth at $212B - and Toyota is a huge outlier.
It feels weird to enter into an industry mostly unrelated to your core competency when it would move the needle 2-3% - maybe 5-10% if you're really lucky and create the next Volkswagen or Toyota. Why enter that market?
With an iPhone, Apple's competency was in writing software for electronic devices. People loved their iPods, why not a phone that is also an iPod? People loved their iPhones, why not an iPhone HUGE (aka iPad)? It's basically the same device. Watch? Again, same stuff. Cloud services to accompany those devices? You already employ a ton of software engineers, might as well get some premium recurring revenue services. Even if one of these isn't the biggest hit ever, it's using many of the same skills and competencies as the rest of Apple's stuff.
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With the car, it feels like it's a relatively small market without the margins that Apple is used to and far away from their competencies. Then again, maybe Apple thinks that they'll do to the car market what they did to the phone market: eliminate most of the incumbent players and the market will coalesce into two players (Apple/Google for phones or Apple/Tesla? for cars). Maybe they're thinking that they have more core competency around the future of vehicles (sensors, processors, machine learning, etc.) and that the competencies around current cars (suspensions, engines, etc.) will somewhat fall away in the new world.
I mean, a month before Jobs introduced the iPhone, everyone was creating renderings of a device with a iPod click-wheel on one side and a phone dial pad on the other. Maybe Apple has something much nicer in store.
Assuming it doesn’t require different conditions, e.g. larger capacities.
Every hardware piece was special in the initial iPhone - from cornea glass, sensors, processors and what not
Can you give an example of "blocking" foreign companies? My understanding is that under recent trade agreement with America, for instance, American import cars are exempt from South Korean's regulation and don't even have to satisfy Korea's local safety standard. There are also similar arrangements with EU and Japan. Also due to the country's lax product liability laws that often favor business than consumers, a lot of domestic, foreign car makers have been getting away with defects that would have certainly raised ire elsewhere. The share of imported cars likewise has been increasing quite a bit: in 2019, there were 1.5M new passenger car registrations in South Korea; 250K were imports -- mostly Germans though -- or about 16% of all registered cars. The share of foreign companies' cars almost tripled in 10 years.
>> It's much easier for kakao to watch how other companies do it and simply copy it. SK is more similar to China in that regard ... Uber isn't in the Chaebol so why should uber operate?...
I don't think I could agree with this either. Both Uber and other domestic ride hailing services, most notably Kakao and Tada, faced significant pushback from taxi drivers. Tada as mentioned by @albertshin was forced to shutdown after the National assembly essentially made it illegal after such pushback from organized labor unions and the taxi industry:
https://www.scmp.com/week-asia/economics/article/3076144/sou...
Perhaps you are unfamiliar with the militant labor movement in SK, but I don't there is hardly anything equivalent to this elsewhere in China.
Sure, Uber was the first to arrive in the SK market and it immediately faced fierce pushback from the taxi union and regulators. South Korea's transport law does not allow private vehicles for commercial purposes, but it makes an exception for "car pool." Uber was declared illegal because it used private vehicles for commercial purppose and the company subsequently pulled out in 2015. Kakao launched the following year, but avoided Uber's misfortune by using registered taxis only. It appeased the taxi union, but it also meant that the company couldn't make any money and it is probably not the best example of the "shared economy" business model promoted by Uber.
South Korea's "domestic" companies like Tada and Kakao tried to enter carpool business afterward, but, after no fewer than 3 taxi driver suicides in protest, two in horrific self-immolation, and the gov't intervention, Tada was forced to close their shop this year; Kaokao's capool service is limited to only 4hr/day and during rush hours on weekdays. That is not what Uber would have pursued in SK.
I don't think Uber's failure in SK is good evidence to prove your case as many domestic companies, big or small, suffered similar legal troubles and fierce resistance from the taxi industry. I'd generally agree that SK doesn't have the best business climate, but I just don't see where it is necessarily hostile to foreign companies, or where "domestic" companies are favored over foreign competitors; or where all they do is to copy foreign companies similiar to China.
as trendy as tsmc might be these days - apple might end up going for abb, siemens, toshiba engines
A quality car made by Hyundai with Apple technology and brand image is an incredibly good idea for both companies.
To me/my circles, that means they know their cars are excellent and are prepared to bet real money on it.
Many of those cars are now coming up on the tail end of their manufacturer warranty, and still command insane resale price for what they are.
That's not even mentioning Mitsubishi's 10 year-warranty, Tesla's 8-year warranty, and Kia's 7-year warranty.
Hyundai is good but not that exceptional.
Ref: https://www.whichcar.com.au/car-advice/which-car-manufacture...
I know Hyundai and Kia have a crazy amount of engineering overlap, but regardless you are correct.
Hyundai/Kia have steadily turned into top tier car companies over the last few years, and Hyundai’s Genesis luxury brand has been receiving glowing reviews lately.
A partnership with these ascending and well-established companies to manufacture their cars would give me much more confidence in Apple’s car ambitions.
But, here are the big questions. Will it work with my Android phone and my relatives' Fire tablets? And will it continue to work well in 20 years when it stops getting updates?
If the answer to both of those is "yes", then I'm excited.
Almost certainly not
> will it continue to work well in 20 years when it stops getting updates?
Mostly likely, yes. Apple products very often have much longer lives than their competitors (if taken care of, obviously)
They won't make a product for you and they'll make lots of money.
LOL probably true. I hope that doesn't become the norm however. I refuse to take the depreciation loss on a new car, and if cars can't reasonably be expected to last 20 years (with repair/parts availability) I'm not sure what I'll do. Keep an old Red Barchetta in a barn I guess.
source: work in the industry in this area.
Source: android auto data notice from the app
"Certain vehicle information (for example, headlights, parking brake, compass and gear) will be available to Android Auto-compatible apps to help customize the app experience, such as displaying different graphics for day and night, or setting screen interaction limits based on when you are driving. To learn more about a particular app developer's handling of data, please consult that app's documentation.
Google may access other data about your vehicle, such as the make, model, fuel level, wheel speed, odometer and gear, and whether the passenger seat is occupied. This data is not linked to your Google account and will be used in accordance with the Google Privacy Policy."
I've worked extensively on automotive sensors. You cannot obtain these without CAN bus access. This is just a subset of channels in their disclosure.
The IVI has access to CAN.
The specific sensor CAN messages, for example, can then be translated to any protocol and passed over an API to the phone from the infotainment device. The phone does not have access to CAN.
No car manufacturer would be crazy enough to allow a USB device direct access to a CAN network (unclear how you would even accomplish that electrically).
I never claimed the phone can connect to CAN.
[1] https://www.wired.com/2015/07/hackers-remotely-kill-jeep-hig...
If you want to learn more, please let me know.
Initially, you can check out the Android Auto wiki page: https://en.m.wikipedia.org/wiki/Android_Auto
"The most common way Android Auto is deployed is via an Android mobile device running the Android Auto app, acting as a master to a vehicle's dashboard head unit that supports this functionality.[2] Once the user's Android device is connected to the vehicle, the head unit will serve as an external display for the Android device, presenting supported software in a car-specific user interface provided by the Android Auto app.[2][3]"
They already have your location via phone if permission is granted. ...
There is a specific, fairly narrow protocol between the phone and vehicle that enables android auto.
Source: work in the industry in this area.
That could be very interesting if things go well with Apple.
Hyundai seems like they might be paying their employees, which seems a little off-brand for a company like Apple.