Former GM CEO on Apple Car: 'They Have No Idea What They're Getting Into'

[Renzatic]

" Magna Steyr" Lifted from MR's 1st story about car, just sayin'

I stand corrected, but there's still a fly in the ointment there. Using a 3rd party means it'll cost Apple more to make and ship vehicles than the usual bevy of manufacturers who own plants located across the globe.

 

[J. Jizzle]

I laugh because this info is coming from a former CEO.

 

[furqan8421]

People are overlooking a lot of things

It's much easier to enter a market where the device prices are a few hundred dollars and people are almost forced to upgrade every few years

It's different when it's an expensive item that people rarely upgrade, and are more likely to buy used. Having parts for a car and technicians is also different than going to the Genius Bar.

As much as lots of people here praise tesla it's not like they've run away with the market. If Apple does make a car it may be successful but it's not likely that they would just completely dominate.

 

[McScooby]

I stand corrected, but there's still a fly in the ointment there. Using a 3rd party means it'll cost Apple more to make and ship vehicles than the usual bevy of manufacturers who own plants located across the globe.

think you'll find they're global.

 

[Renzatic]

think you'll find they're global.

So why doesn't everyone rely on them, like the computer industry relies on the likes of Foxxconn? Why are companies like Volkswagen, Honda, and co. spending billions opening their own assembly plants?

I think Furqan's post does an excellent job of explaining why entering the car market is a much more dangerous venture than revolutionizing the world with $500-$600 tablets, smartphones, and watches.

 

[wizard]

Can someone find a quote from Nokia in 2005 or 2006 saying Apple shouldn't get into the phone business, they have no idea what they're doing?

I think you missed what was being conveyed here. That is the potential for massively underestimating the difficulty in entry into a highly regulated industry.

Considering I work in a highly regulated industry I understand completely what this guy is trying to say. It is an honest warning given freely.

 

[doelcm82]

No that's exactly my point. Apple's existing stable of engineers have none of the skills needed. They would have to bring in all of that expertise. They would have to build from scratch a team of automotive engineers and get them used to Apple's way of working before they could even start such a project.

I think the rumor is that Apple has begun building such a team. So the question is: Are they planning to use that team to build a car, or for something else auto-related?

 

[miamialley]

Says the guy who doesn't want the most profitable company in the world to build a competing product.

 

[apolloa]

Just to add some other facts about Tesla, they didn't build their own factory but they bought an old jointly owned Toyota and GM plant.

I have to say I would add a model S to my dream garage.

 

[B4U]

a) Apple did not make all those money from making cars...
b) Dan, quit the crap...why did you team up with Bosch, Delphi, LG, Panasonic and Pioneer?
c) I sincerely hope if Apple do not fall to the same results of Fisker if they decided to venture into automobile business
d) It is quite painful to look through the comments here...can we have a show of hands how many are ACTUALLY working in the automobile industry?
e) Those bashing about the bailout, please remember Dan was not the CEO when that happened.

 

[gri]

Vroom, Vroom - eh sorry - ssssssssssssss...

Here is my dream Car: Tesla S including Apple's technology. Drooling by the thought of it. Of course the approximate 150k price might be a tiny issue...

And don't forget, Musk released the patents...

 

[brinary001]

It's so funny all these companies that have called out Apple over the years for getting into something it shouldn't, and now they are no longer existent or their investor and customer base has lost all vested interest in them.

 

[Rogifan]

Go back a couple years and all the concern trolls in the media were fretting about Apple and it's supposed lack of innovation. Some Wall Street analysts wondered aloud if the board needed to think about replacing Tim Cook. Heck one guy from the Fox Business channel claimed the board was pushing Cook to innovate faster. Just last month when Microsoft showed off its augmented reality goggles Engadget wrote a story asking when did Apple become the boring one.

Now we have rumors that Apple is researching the automotive space and now the concern trolls in the media are fearful that Apple is losing its way and whatever happened to the thousand noes for every yes (apparently Apple doesn't have to do any research to determine what the noes are) blah blah blah. So I guess Apple should innovate, and much faster, but only on things the concern trolls in the media think they should be working on? And Apple should be forever be beholden to the smartphone upgrade cycle so any product that people don't replace every two years is out of the question?

 

[wizard]

as mentioned in other threads and a curiosity if they are entering the automotive sector in the software side (more than carplay), is that Apple doesn't have a real time OS, something you require to be able to safely and accurately control modern vehicles.

that's going to be a tremendous barrier for Apple to overcome, it would mean completely writing a new OS from the ground up outside of OSx and iOS. not something I see them doing. Not when their rivals have already been in the market for a few years (QNX owned by Blackberry and Microsoft, including home brewed OS')

There are many companies out there involved in realtime operating systems. That is if they really wanted to get involved in a full blown realtime replacement for OS/X. They could easily put the realtime antics on a separate chip, run a real time kernel on top of OS/X or implement a raft of other possible solutions. An operating system is the least of their worries. The big worry is getting AI advanced far enough to implement some of the features dreamed about here.

 

[McScooby]

So why doesn't everyone rely on them, like the computer industry relies on the likes of Foxxconn? Why are companies like Volkswagen, Honda, and co. spending billions opening their own assembly plants?

Don't suppose you checked out their website?
Not that I know hee haw about car manufacturing, but limited stuff I've picked up over the years is that car manufacturing plants seem to specialise in same models, or at the very least, models based on the same chassis.
All of the above are these guys customers, probably in the same way years ago apple built their own computers then contracted out.

I'm with the consensus it's for an info/management system, where pad/phone acts as controller, therefore still gets their sales without being exposed to a volatile marketplace, Think when apple touted its wares to Verizon who turned them down before AT&T took it, after that any manufacturer would be mad to say no to them, but before they can approach a manufacturer (although I'm sure they know who they're going to) the product needs to be thoroughly tested, hence the vans (much in the way vehicle manufactures hide their new models appearances when testing)
As for planned obsolesence, that's still present, but apple's "new" system works alongside the manufacturers own system, so if you don't upgrade, it ceases to be apple's problem, for styling, see VW ibeetle from a few years back.

 

[samcraig]

Speculation is running rampant that Apple, Inc. will introduce a a combination phone and iPod in the near future.

Despite all the buzz, Palm, Inc.’s CEO Ed Colligan isn’t worried about the iPhone because he doesn’t believe any company without extensive experience in developing mobile phones will be able to make a successful one on its first try.

When he was asked about this device last week, Colligan said, "We’ve learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They’re not going to just walk in."

He was asked this because his company makes the Treo line of smartphones, which will be one of the top competitors to the iPhone, if and when it is released.

http://www.brighthand.com/news/palm-ceo-not-worried-about-iphone-rumors/

Apple didn't know anything about music before they entered into the music industry.

Apple didn't know anything about phones before they entered into the phone industry.

Two huge industries. Revolutionized by one company.

Winter is coming, GM.

Flashback from 2007:

"The iPhone is nothing more than a luxury bauble that will appeal to a few gadget freaks. In terms of its impact on the industry, the iPhone is less relevant."

@ http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aRelVKWbMAv0

This article reminds us all how competitors and some investors reacted to Apple's iPhone launch.

I would be nice to see the same happen once again with cars.

So first thing. A car is NOT a phone.

Second thing - if you bothered to read and understand what the CEO was saying - you'd realize that his comments were not the same as those companies that called doom for Apple and the iPhone.

Third - you would know both of these things if you read the thread first before replying.

 

[Rogifan]

Hmm...so apparently Apple is being sued by A123 systems for poaching 5 engineers to work in a new battery division at Apple.

http://9to5mac.com/2015/02/18/apple-a123-systems-poaching/#more-365842

 

[adamfilip]

So what makes the Ex-GM CEO think that Apple will sell the car with only <20% margins?

your totally right..

Apply can make a awesome electric vehicle charge a crapload for it.. it will sell.. and make 50% margin.

 

[prowlmedia]

Again focussing on the negative and not seeing that it was actually a simple response to a question that was asked of someone who used to be CEO of GM.

His answers relate to viability of entering the market. He makes no hostile statements. He has no motives. He just answered the questions.

And if we follow your logic, Apple isn't worth discussing anyways, cause once upon a time they were circling the drain and in deeper trouble than GM has ever seen.

GM made a strategic choice to restructure. And, they repaid their loan from the government. And they've come out better after restructuring.

Apple was at the brink of total irrelevance and actually a dying company once. If we apply your logic, we shouldn't even think of Apple in the least because they once were dying.

Calm Down. I was only making flippant comment.

Besides you are not completely correct.

Technically. No Apple weren't 'As bad' because they didn't have to get BILLIONS from the Taxpayers.

The government Closed the book on GM after getting $39Billion back... they actually put in $49.5B... A $10.5B shortfall that the Taxpayers picked up. Not exactly chump change. Yet the Management still took fat bonuses. But on the other hand of course jobs were saved. Terrible, terrible cars can still be made. Everyone is happy.

 

[natepaschall]

Apple doesn't want to sell cars to make money from cars.

They're smarter than that. They want to sell cars to make money from their other goods and services. They probably realized that in order to control the entire experience of using a device like the iPhone they had to get into the car market - having to work with other car companies (fragmentation) is too difficult (kind of like the current troubles with TV).

Currently, most Apple users can leave the Apple ecosystem and feel few effects. If a basic necessity (for most), your car, is dependent on using your phone, you can't just go out and buy an Android now can you.

Plus, they're not just going to make luxury versions - they are going to make mass market versions of these, and they'll probably make very little profit on them. They want every person driving an Apple car.

 

[NY Guitarist]

An electric car bypasses a whole lot of regulations for emissions, etc, and eliminates an enormous amount of engineering overhead.

And structural engineering of vehicles is well established at this point

That leaves electronics. Apple could easily enter this market.

 

[acslater017]

i guess that means apple can build and produce whatever it imagines sucessfully just as long as someone doubts them or is scared of them[/QUOTE

Let's be fair - Apple has upended countless industries full of naysayers and short-sighted trash talkers. But cars are a COMPLETELY different field. Yes, 5+ years from now, autos will have more electronic elements like battery packs, automation, on-call systems, advanced infotainment, etc.

But every industry Apple has entered thus far has at least been related to consumer electronics - music, telephones, tablets, smart watches, etc. Vehicles are an ENTIRELY different field and it could be a risky investment of time and money.

 

[prowlmedia]

Former CEO and Chairman, having retired last year.

Joined GM in 2009 as a Treasury-appointed director.

You're right that he said stuff, though.

You mean the Sweetness and Light that is Aversion...who had to have his pay and bonus frozen by the movement because he and 25 of his buds tried to up his salary from $9m a year to $11.1m, to get around long term Vesting issue.All while still owing the Taxpayers $10.5m which the government has had to write off.

Poor fella must have been on the bread line. Oh no. That's all the people that were actually laid off because of piss poor management in the previous 10 years.

----------

i guess that means apple can build and produce whatever it imagines sucessfully just as long as someone doubts them or is scared of them[/QUOTE

Let's be fair - Apple has upended countless industries full of naysayers and short-sighted trash talkers. But cars are a COMPLETELY different field. Yes, 5+ years from now, autos will have more electronic elements like battery packs, automation, on-call systems, advanced infotainment, etc.

But every industry Apple has entered thus far has at least been related to consumer electronics - music, telephones, tablets, smart watches, etc. Vehicles are an ENTIRELY different field and it could be a risky investment of time and money.

Definitely agree with this. But calculated risk seems to be what they are good at. And Just in time production. Something the car industry seems to be pretty bad at. It's either Parking lots full of cars no one wants or 9 month waits.

Electric cars are a lot simpler with less moving parts. and potentially a very automononus production line. Love the Tesla making of videos.


https://www.youtube.com/watch?v=9mzV7Y9B0tk

 

[Keirasplace]

a) Apple did not make all those money from making cars...
b) Dan, quit the crap...why did you team up with Bosch, Delphi, LG, Panasonic and Pioneer?
c) I sincerely hope if Apple do not fall to the same results of Fisker if they decided to venture into automobile business
d) It is quite painful to look through the comments here...can we have a show of hands how many are ACTUALLY working in the automobile industry?
e) Those bashing about the bailout, please remember Dan was not the CEO when that happened.

Yes, he's good at washing his hands... Very good. When did he know about the ignition problem that killed who knows how many (we'll probably never be sure)? Why was the recall done so late? Certainly after 2010 when he got there.

Also, GM is so peachy now that he feels he should comment now; so, I guess since he should give back the extra 10B back the government hasn't seen from the bailout.

Anyone from GM, of all companies should be keeping their mouth shut; If someone from Volkswagen had said something, maybe I'd respect it.

 

[dklcheng]

I hope they make a car

Just to spite this guy. And of course, it could be wildly successful (a self-driving, all electric, info-car that you control with your watch).