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Former GM CEO on Apple Car: 'They Have No Idea What They're Getting Into'
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LOL laughably reminiscent of what phone company execs said ahead of the iPhone. And that too was a low margin business -- back then.
And wow, like, they make cars out of STEEL?! Holy crap! If only Apple, say, I dunno -- had some experience pioneering manufacturing techniques around the use of metal, say, I dunno, aluminum...
Making a phone or computer out of aluminum is a little different then making a vehicle. Besides Ford is already the first to do that in a mainstream vehicle. The new F-150 is built out of all aluminum body panels.
I don't know maybe in 5 years Apple will be the largest automaker in the world with people lining up for it's $100,000+ cars. You never know, but I'm not going to hold my breath.
Al vehicles
Audi has been building all aluminum vehicles as part of their lineup for over 15 years.
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"They'd better think carefully if they want to get into the hard-core manufacturing," he said of Apple. "We take steel, raw steel, and turn it into car. They have no idea what they're getting into if they get into that."
Apple takes the Periodic Table and turns it into phones, computers, displays and a whole bunch of other things. Cars are not that hard, just ask all those backyard mechanics.
Apple has vision, passion and money, just the things GM lacks.
Audi has been building all aluminum vehicles as part of their lineup for over 15 years.
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"They'd better think carefully if they want to get into the hard-core manufacturing," he said of Apple. "We take steel, raw steel, and turn it into car. They have no idea what they're getting into if they get into that."
Apple takes the Periodic Table and turns it into phones, computers, displays and a whole bunch of other things. Cars are not that hard, just ask all those backyard mechanics.
Apple has vision, passion and money, just the things GM lacks.
Attachments
Don't underestimate new players
"They'd better think carefully if they want to get into the hard-core manufacturing," he said of Apple. "We take steel, raw steel, and turn it into car. They have no idea what they're getting into if they get into that."
Apple takes the Periodic Table and turns it into phones, computers, displays and a whole bunch of other things. Cars are not that hard, just ask all those backyard mechanics.
Apple has vision, passion and money, just the things GM lacks.
"They'd better think carefully if they want to get into the hard-core manufacturing," he said of Apple. "We take steel, raw steel, and turn it into car. They have no idea what they're getting into if they get into that."
Apple takes the Periodic Table and turns it into phones, computers, displays and a whole bunch of other things. Cars are not that hard, just ask all those backyard mechanics.
Apple has vision, passion and money, just the things GM lacks.
The FORMER CEO feels threatened how exactly? And his comment was nothing at all like Ballmer's. Did you read the actual article?
Responses...
Guess you guys missed the fact that that was a Samsung/Android mis-information campaign - every phone in the world has antennae on the outside somewhere, and if you hold them wrong, they drop calls. And the stats on dropped calls were 1,000 times WORSE on the Android phone at the time...but we won't talk about that.
Cheers,
Cameron
you're just holding your steering wheel wrong. Completely your fault that you went straight into that tree!
Guess you guys missed the fact that that was a Samsung/Android mis-information campaign - every phone in the world has antennae on the outside somewhere, and if you hold them wrong, they drop calls. And the stats on dropped calls were 1,000 times WORSE on the Android phone at the time...but we won't talk about that.
Cheers,
Cameron
Guess you missed the fact that it doesn't matter if other phones have the problem - the iPhone had it - and Apple gave away free bumpers to silence the outcry.
PS - it wasn't an Android/Samsung campaign dear misguided one. The onslaught of media was brought on by Apple's CEO sending out poor responses to a genuine issue people were having. The media ate it up.
And please provide your evidence that Android phones (and which ones) drop calls 1,000 times worse.
Let's talk about that!
'They Have No Idea What They're Getting Into'
Bet Nokia said that when they got into mobile phones
Bet Nokia said that when they got into mobile phones
Bet Nokia said that when they got into mobile phones
Welcome to what - page 2 of the thread?
The guy had no experience in cars when he went into GM, so I think his comments if not worse than Balmer, are at least much more ironic ;-).
That's another matter and at least viable feedback to the comment. Claiming his comments are the same as Ballmer's shows a lack of reading comprehension to those making the claim.
But then again - many of these people are also posting that same comment pages into a thread where it's been said before. So clearly reading comprehension (or impulse control) is an issue.
Why use steel.... there was this new alloy reported last week that was a mix of steel and aluminum that was as light and as strong as titanium but as cheap as aluminum. If I was starting out I'd look into that.
My understanding of the car industry is that GM, Ford, Toyota actually buy large numbers of components and consultancy from 3rd parties. So it would be unlikely that Apple wouldn't do that too... This would cut down the project as a whole.
One thing is true is this if Apple are looking to make a car they will only do it if it is a game changer and makes the guy from GM loose his shirt within 5 years of it coming out.
I'd be surprised if they do a car but it was rumored that Steve was looking at if I remember correctly 5 or so years ago on this very website!
It might be on their bucket list.... along with the TV/Games Console, Watch, Search engine etc....
My understanding of the car industry is that GM, Ford, Toyota actually buy large numbers of components and consultancy from 3rd parties. So it would be unlikely that Apple wouldn't do that too... This would cut down the project as a whole.
One thing is true is this if Apple are looking to make a car they will only do it if it is a game changer and makes the guy from GM loose his shirt within 5 years of it coming out.
I'd be surprised if they do a car but it was rumored that Steve was looking at if I remember correctly 5 or so years ago on this very website!
It might be on their bucket list.... along with the TV/Games Console, Watch, Search engine etc....
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Nothing to worry about
He's ignoring the fact that people have always been willing to pay more for Apple products. Odds are Apple's margins wouldn't be the same as GM's.
He's ignoring the fact that people have always been willing to pay more for Apple products. Odds are Apple's margins wouldn't be the same as GM's.
Apple should buy GM and retool one of their plants for the iCar.
Saginaw Steering Gear is vacant...
Saginaw Steering Gear is vacant...
Apple won't run them out of business because Apple will never design, manufacture or sell a car. Anyone that believes they will is delusional.
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Manufacturing a phone that fits in your hand and a 3000+ pound car are two different things. Why you people don't understand this can only be chalked up to willful ignorance or blatant disregard for reality.
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Apple has insanely high margins only due to the fact that they have basically what amounts to slave labor in China. If anyone is delusional it's you.
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This proves it right here. You are so far from reality it's scary to think people like you exist in large numbers.
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Well that's because you don't know anything about the ZR1. That's why you can't think of anything.
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GM was using CNC machines before Apple even existed, forms of CNC have been around since the end of WW2. You can't be serious with that nonsense. CNC machining has been around for half a century, what Apple does with it is neither special or innovative. And the term you were looking for is billets of aluminum, not blocks of milled aluminum.
When Apple can release a telephone that understand what time zone it is in with rock solid reliability then maybe I'll have faith they can start interviewing people needed to design the control system for a car. Until then I have no faith they have any clue how to manufacture a car.
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They sold 10 million cars in 2013. If you think that's a low number then you don't understand car manufacturing. GM is doing just fine on selling cars.
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Astounding just how delusional you people are.
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Yes, deflection is the perfect defense. It doesn't matter who did what worse, it was inexcusable. That's the worst defense you can make. "So what, it was worse over there, yell at them!" Childish. Utterly Childish.
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Apples margins are so high because they have what amounts to slave labor in China. The car industry doesn't tolerate that ********, you pay people well or you don't get things made. Apple won't succeed in the car industry because they are completely dependent on dirt cheap labor. If they try and hire people to build cars for what Apple would have to pay to maintain that margin they'd get laughed at. You people forget that Apple was instrumental in making sure that their employees didn't get the chance to get a better job and therefore restricted their ability to make higher earnings. Apple doesn't' care one bit about paying what people are worth, they went to court over making damn sure people didn't get paid what they were worth because they are cheap. They have high profit margins because they don't want to pay people to make their products in countries where it isn't tolerated.
It would seem to correlate when those successful products were all new categories at one point.
He is still an active consultant. Apple is going to create an electric vehicle with China. Others were caught completely off guard.
None of those categories were new when Apple released those products. They were the best at initial release, but everything Apple has released in the last decade wasn't in a new category at all. There were tablets, laptops, music players and "smart" phones long before Apple released a product in those categories. There's obviously debate on which was best and Apple has been terrifically successful in those categories to bolster the argument that they released the best ones, but they were by no definition new categories.
He is still consultant. GM, Ford, and Tesla now realize that for the past few years Apple has been preparing to develop an electric vehicle with the Chinese for their market. Think Cutting Edge Rickshaw, somewhat. More utilitarian like a Honda Element. All with 38% margins. All manufactured in China.
I want to point this out too in case anyone missed it in your long post.
Apple isn't going to be able to come along and demand 45% profit margin on cars. Not unless they're aiming to compete in the prestige or premium car category (like Tesla).
The sheer costs of production of automobiles means you can't just offload labour to china or other 3rd world nations. You will have to build the car local (or close to local) due to many regulations and import restrictions on autos
And since if they build a car, it will be likely be built in one of the other existing known manufacturing locations that make cars that are 'legal' in North American markets. So this likely means it'll come from Japan, Korea, USA, Canada, Mexico, Germany.
All of these countries have significant union presence in their automotive sector. the cost of Manufacturing will be high. (in Ontario, working on an auto plant starts in the $30/hour range).
So unless Apple is willing to take a huge hit on their margins, or are willing to price themselves a good 20-30% higher than their competition for similar class vehicle, I believe it is very unlikely from a business decision, nevermind technical, that Apple is entering the Automotive market as a car manufacturer.
You mean just like the cellphone market was before the iPhone (and, for the most part *still is* except for the iPhone)?
The net profit for high end makers is 10-13% while the dealer takes 5-8%. If you're selling directly (like Tesla wants to do), you probably can take half the dealer margin and get an about 15% profit margin. That's not even taking into account the added margin an Apple may have with highly integrated electronics : pushing 20% wouldn't be surprising at all.
You say, well that's still not 40%. Maybe not, but the Auto industry right now is a nearly 2 Trillion dollar industry and revenues are in general quite high for most makers. Very few right now are losing money unlike the cell phone business. The profit margins of the cell phone business wasn't really high either before Apple got there (and it still isn't for anyone that's not Apple and Samsung).
So, with a net profit of 20% on 75B of sales (slightly below the size of BMW right now) (say 10 years out) would be 15B profits around 2025. Not Iphone like business... But what is?
Apple can'T relly on the Iphone alone giving them that kind of profit eternally. That is unlikely.
The car industry is one of the biggest industry on earth. Not sure Apple making a car would be the only way to get a big part of the pie. But, it is not as much out of left field as it seem.