How Apple became a car company
fastcompany.com
fastcompany.com
That would makes sense. A complete car development within the industry is about 5 years with some companies shortened it to 4 years.
All those articles with "Apple has the experience" are non-sense. Because, if Apple had the experience, they would not need to hire that many automotive engineers. Apple has the money to buy in those experts and Apple has to money to build things for years without the need to make profit on it.
Full development includes a new platform / new engine. Mid-cycle refreshes are only updates to the exterior / interior, with some potential refinements to the platform and engines.
Theres finally been a shift to modular platforms too - VW's MQB/MLB is the first that comes to mind and it covers pretty much their most popular sellers in the entire group (Skoda through to Audi).
The smaller manufactures (Mazda, Suzuki etc) are definitely more aggressive, new models hitting every 5 years with a refresh every other or third year.
It's also a bit more complex because the development of engines / platforms / vehicles isn't always synchronised; so what does happen very often is that a brand new vehicle is release, then some time later it comes with additional engine / transmission options, followed by a facelift, followed by a platform update, and so on; so you never truly get an "all-new from the ground up" vehicle that often.
Years ago I've read that Jobs himself drives a BMW. Driving a top model BMW series 3 on a job myself, I couldn't believe Jobs would not feel the urge to create something better than this. Then there were stories (maybe around 2008 or later) about a famous Audi designer now working for Apple. At this moment I was sure we'd get a car from Apple. Then Jobs died...
So I'm very happy now to read that Apple may be working on a car.
I'm sure Apple could bring some design panache to the auto industry, but with their history of Vader-gripping their ecosystem, they are the last company I'm inviting into my garage.
Does Mercedes license their engines for others? Can you install the BMW system software on any other car brand?
You can buy third party tires just as you can buy third party iPhone and MacBook cases. You can replace your brake discs with third party or original parts just as you can get your iPhone/MacBook battery replaced in a third party shop or the official Apple Store.
So in my opinion, even before the arrival of Apple, the automotive industry is already in such a lock-in mode. If history repeats itself you will however be able to buy an Apple car or a Google car ;-)
It will be interesting to see whether Apple has sufficient resources (not just financial, but people/cultural) to get a home run or even base hit as a fast-follower.
One thing is certain, consumers should certainly benefit from all this competition.
Also a liability.
Daimler is prototyping electric cars since the 1990. Some based on battery and others based on fuel cells, which is basically hydrogen. The original A-series was supposed to be all electric, but just before going public those plans where canceled.
BMW has an heritage on electric cars into the 1980.
Renault sold mid 1990 small sized electric cars.
Remember, the electric hype started with the Prius at about a time when Toyota was about the cancel the Prius. They did not, because it happened that oil became very expansive and so many US Hollywood stars and following many US citizens bought one. With that the idea of the electric car was "born".
Btw: I don't see a huge 17" touch screen with an UI of a early 2000 website feeling as an interior experience. And in cockpit design the 17" does not fit at all. A smaller one may would have benefited the cockpit design much more.
I'm seeing essentially the same arguments over and over again for why Apple should obviously get into the car business. They all try to make the case that it's complimentary to what Apple already does, or that Apple has natural expertise to build a luxury car brand, and so on.
Well here's why Apple shouldn't do it: the margins suck.
Apple may do something like $60 billion in profit the next four quarters. In a good year, BMW can generate $5 or $6 billion in profit; Toyota, the world's largest automaker, just managed $17.7b in profit on $249b in sales.
If Apple does everything right, in 15 years they might be able to match BMW's profit and scale.
Why should Apple want to enter a low margin, capital intensive business, when they own one of the greatest high margin businesses in history?
Put another way, through extreme effort and investment, if they're really fortunate, one day they might get a $5 or $6 billion profit business out of it. Approximately equal to boosting their iPhone business by 10%-12% today.
I don't see how they can revolutionize the car business anymore than Google or any of the other large companies doing autonomous cars. They're going to have to bring something to the table other than a car. All of the large car companies have autonomous vehicle research programs. They can spin out a product, as they've done when Toyota's Prius became a commercial hit. On the lower end of the scale, there are cars coming from China, possibly India and other nations which are due to hit the US soon. Getting into the auto market against the high end Mercedes, Audis, BMWs, and Italian cars would be a tough market. They would also be competing against well established and loved brands. Not sure what part of the market they would fit in or even target.
I have no idea if Apple are working on a car or not. I doubt they would revolutionise the car business any more than they revolutionised the phone business.
But for Apple to make a big dent in a sector that is highly technical but with significant brand and aesthetic factors? That doesn't strike me as being very far fetched at all.
None of the dominant phones had what Apple's iphone had. Apple is clearly not catering to the low end/margin business either.
"But for Apple to make a big dent in a sector that is highly technical but with significant brand and aesthetic factors?"
Not sure what you're saying here. But in the past, Apple introduced some major changes to the marketplace around their products. They would have to do that if they want to be competitive in the automotive space.
The computer as a center of lifestyle is pretty much Apples' domain at this point, they defined it as a domain over decades of work, and they are a market leader. And I believe - given the nature of Apples' history, as well as its clearly stated goals to revolutionize the way humans interact with the world, which is a spiritual asset - it only makes total sense for them to start applying their dogma to other realms.
An Apple car, an Apple Jet, Apple rockets .. why not? In the end, if the same thing happens to [product] as happened with computing, the "Apple Way" may .. very well .. be an appropriate contribution to the next few hundred years of manufacturing.
(Its the "Apple 3D-printer/molecular-assembler" that will truly kick the religion up a gear..)
Its going to be super interesting to see Tesla and Apple in 5 - 10 years time. Or maybe something else that rises in all this serious industrial privilege that we're all a party to.
If it were possible, I'd put on my TeslApple googles, don the TesLevi protective suit appropriate to my rank, crank up the Goojuice, hit the power button and go 'bong' in unison with the rocket engines as we watch Brain'oSoft lifestyle movies on my way to LEO-station Alpha Jobs.
Since thats just a fantasy, going for a ride in a rich friends Apple Car will suffice. Hope it happens.
Some combination of an electric bike/scooter/skateboard/Segway -like thing that had the thing that made people need to have one.
The technology is pretty much there, and Apple could do a wonderful job of building this.
A good opportunity for a well designed piece of carbon fibre \ aluminium loveliness that would sell well to their urban base with good margins at the $1500 range. If they really want to demonstrate their design chops then try for a radical fold-up design which have great practicality for combined use with public transport. Current incarnations are expensive, pretty heavy and a bit weird.
If thinking fancifully, then a pop stand and artificial resistance and for dual use as indoor exercise equipment would be pretty cool. Stick a macbook stand on the handle bars and maybe its a new type of "sitting but active" desk.
"Bicycles for the mind" after all.
Don't forget though, that there are already some very badass, nice transport systems being made:
http://thekneeslider.com/dechaves-garage-dch-project-a-naked...
Jony Ive was one of the few high level people at Apple I respected. Those comments just lost him most of that respect.
There's being a snob, and there's being a dick. Seriously, "disgust"? At someone driving a Camry? From someone who "totaled" a DB9 a month after getting it? Maybe he should get a Camry...
>Jeff Williams, Apple’s senior vice-president of operations, drives an old Toyota Camry. Ive’s verdict, according to Williams, is “Oh, God.”
This should, as you say, be taken as just the words "Oh, God". This may not be disgust, it may be amusement, resignment, anger etc.
You're right. I shouldn't draw conclusions from misquotes.
Some respect regained, but I still think he's playing the "design superiority" card incorrectly with comparisons to Camrys... Unless you count those 2009-2011 models.
His disgust is not with the driver/owner but with the design.
Every other aspect of design is subjective. One person's Porsche is another's Ferrari. One's BMW is another's Merc.
Also, the article (although possibly misquoting), states that Ive's disgust is with the exec driving the Camry, not the Camry itself.
Here is the text direct from the source article - the New Yorker profile - (that this article is referencing):
"Jeff Williams, Apple’s senior vice-president of operations, drives an old Toyota Camry. Ive’s verdict, according to Williams, is “Oh, God.”"
Wouldn't need to. You don't use your desktop/mobile OS for car controllers...
If you use it, you do it for car Media and other similar UI.
>and considering the quality of Apple's software in recent years
That's mostly bollocks. There were similar complaints ALL the years...
They would probably only use an OS for the in-car display, like Tesla does (Ubuntu), which obviously isn't (shouldn't be) critical for the other functions of the car.
I purchased an iPhone 3G because it was among the first phones to support fast internet connectivity and there was nothing like the App Store at the time. I'm not sure I could afford or would even want an iCar, but if it's successful, it paves the way for a revolution in the auto industry (bring on rooted ECUs with a marketplace of modules, and 3D printed replacement parts and after market upgrades!)
You're joking? The original iPhone was mocked for not having 3G because that was a pretty standard smartphone feature by 2007.
They clearly made up for it in a smart manner by offering the things the competition wasn't offering (ergonomics, responsive interface, etc) rather than trying to match them feature for feature. But I confess that as a smartphone user I was a bit baffled at how they expected to sell a smartphone that didn't have 3G, GPS, third party apps, MMS, copy/paste, multitasking, or even a front camera for video calls or streaming on wifi.
Granted, in retrospect all I did was show how little I understood about consumer markets and demands because to people that hadn't been using whatever fancy-pants HTC TyTn was out at the time, it was a huge jump up from their feature phones and wasn't as off-putting to the new user.
But yeah...lack of 3G was one of the things I just couldn't deal with after having it for the previous couple of years.
It resembles an Orange Austin 1800 [1] to me.
[1] http://www.oldclassiccar.co.uk/photos-tatton0804/austin_1800...
On the one hand Apple has so much cash on hand that they can do just about anything that they want.
On the other hand I can see developing a car being a huge time and money sink with very little payoff in the end. Apple has huge margins on their computers/idevices while the automakers have razor thin margins on their cars.
I think I would feel better about this if they spun off a separate company to do this.
Apple's profit margin is 24%
Porsche's profit margin is 18%
I'm unsure it's a great idea, but it's quite possible to make good margins on cars.
Out of the last 30 years, Porsche also spent about half of that trying to just stay alive as a company.
And Porsche is an amazing outcome example, that's a world-class automaker with an extraordinary car brand and buyer loyalty built up over decades.
Apple is going to go through all of this trouble to hopefully one day in 20 years earn $4 billion in annual profit? Or the theory must be they're going to demolish other car companies, perhaps killing off Porsche and BMW, and maybe they can then earn $8 billion annually if they do that? (versus their $45-$50b iPhone profit business they have today).
It really seems to make no sense.
On the one hand Apple has so much cash on hand that they can do just about anything that they want.
On the other hand I can see developing a phone being a huge time and money sink with very little payoff in the end. Apple has huge margins on their computers/idevices while the mobile phone manufacturers have razor thin margins on their products.
I think I would feel better about this if they spun off a separate company to do this.
But no one thought that when Apple moved into phones. Phone manufactures had big margins[1], and the synergies between computing and phones were so obvious that it was assumed that Microsoft would take over the smartphone sector.
[1] Nokia's margin for March quarter 2007: 22% http://ycharts.com/companies/NOK/profit_margin
They're already at $61 billion, stacked against $178b in cash.
I'll play devil's advocate: they absolutely do not have so much cash that they can do whatever they want.
Another scenario is: via shareholder pressure, they keep upping their commitments to investors. Meanwhile they boost debt to $100 billion, while cash rots to $150 billion. Then they start investing billions into a low margin car business that won't see large profits for two decades. It's actually the setup for a disaster if anything happens and the iPhone loses favor in the market.