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Former GM CEO on Apple Car: 'They Have No Idea What They're Getting Into'
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I don't know why Apple, or any other big company (Google), would want to get into the car business, as in building actual cars.
No, that's crazy, and this guy is right to call it crazy. What Apple is likely doing is software and sensors for a self-driving car, which they will then license out to auto manufacturers as a platform. Let other people worry about the mechanical engineering and the liability for exploding gas tanks.
It was the same with the television. Why would Apple want to make televisions when they can just sell you a box that plugs into one and connect it to Apple services?
No, that's crazy, and this guy is right to call it crazy. What Apple is likely doing is software and sensors for a self-driving car, which they will then license out to auto manufacturers as a platform. Let other people worry about the mechanical engineering and the liability for exploding gas tanks.
It was the same with the television. Why would Apple want to make televisions when they can just sell you a box that plugs into one and connect it to Apple services?
I'm thinking not even self driving technology but rather integration with their products, like the apple watch and iPhone to control facets of the car, i.e., keyless entry, or starting the car etc
Hmmmm. Interesting take on this. Sleight of hand. Get them thinking you're doing one thing and then do something completely different. I like it.
Overall I can't see Apple making a complete car but they could certainly add a lot of technology to a car. Maybe team with a car mfger and offer up an apple package or set of options that automate some processes? We'll find out by 2020 I suppose.
From a fellow Detroiter
L-O-L. I seem to remember Blackberry saying the same thing about Apple. Oh, and the music recording industry. Remember when the iPad came out - there were many other tablets on the market, but none (NONE) were successful. I don't think the sum total of all other tablet sales from all manufacturers even came close to the iPad sales that first year, and they have passed 200 million devices a long time ago. So, to my dear friends and family at GM, Ford, Chrysler - beware. Don't be overconfident, and don't underestimate competition, especially Apple. I do not for one minute believe that the death of Steve Jobs, and the departure of Steve Wozniak, will negatively affect Apple's ability to enter and create new markets. I'd like to see a lot of those jobs remain in Michigan, so we should hedge our bets, form partnerships, and help them if that is what they are doing.
L-O-L. I seem to remember Blackberry saying the same thing about Apple. Oh, and the music recording industry. Remember when the iPad came out - there were many other tablets on the market, but none (NONE) were successful. I don't think the sum total of all other tablet sales from all manufacturers even came close to the iPad sales that first year, and they have passed 200 million devices a long time ago. So, to my dear friends and family at GM, Ford, Chrysler - beware. Don't be overconfident, and don't underestimate competition, especially Apple. I do not for one minute believe that the death of Steve Jobs, and the departure of Steve Wozniak, will negatively affect Apple's ability to enter and create new markets. I'd like to see a lot of those jobs remain in Michigan, so we should hedge our bets, form partnerships, and help them if that is what they are doing.
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I'm sure that will be part of Apple's strategy, they're big on the ecosystem, but I'm not sure they'd be hiring all these car people if all they were doing was keyless entry.
Enlighten me on how HE failed?
The defect was never escalated to the decision makers.
You don't see Tim Cook said anything about iOS8's craps.
Umm....Just Sit Down....
There's already been numerous articles about how Apple can EASILY increase auto margins such as NOT building automotive plants with huge overhead costs, but simple outsourcing manufacturing as it does currently with iPhone.
The other way to increase margins is the direct sales model Apple employs with its stores. The auto industry uses dealership franchise models that cut into margins pretty deep. Buy eliminating even some of this "middle men" silliness, Apple could easily increase margins to 20%. It's not the 30% they are used to, but, it's good enough to shake up the auto industry and make automakers scared as hell.
There's already been numerous articles about how Apple can EASILY increase auto margins such as NOT building automotive plants with huge overhead costs, but simple outsourcing manufacturing as it does currently with iPhone.
The other way to increase margins is the direct sales model Apple employs with its stores. The auto industry uses dealership franchise models that cut into margins pretty deep. Buy eliminating even some of this "middle men" silliness, Apple could easily increase margins to 20%. It's not the 30% they are used to, but, it's good enough to shake up the auto industry and make automakers scared as hell.
Tesla already does these things. They do build cars in the US but have automated most of the manufacturing with advanced robotics.
Tesla has a goal of 30% margins. That's not good enough for Apple who currently get 40% margins.
Maybe.
But that's what a lot of people said about the early iWatch rumors... that Apple was really working on something else that would not look anything like a watch... and that the watch rumors were just to throw competitors off the scent.
Or more likely, sleight of hand.
(Sorry, couldn't resist the correction.)
There's a reason why former import brands are now made in America. It won't save Apple money to outsource car production to China and import the cars to America.
They'll also need to produce left and right side drive versions if they intend to sell them internationally.
And other countries have different standards to adhere to. So they'll need to account for the strictest country and make sure any other nations requirements are met as well.
There's variations within the same model car depending on the intended country's laws. So they'll need to evaluate if producing several versions or one version that has everything is going to be cheaper.
To maximize profits they'll need to have automotive plants in more than one country. Import / tariff fees, and shipping on cars can kill any savings gained by cheap labor.
Automation and localized production are the best methods of maximizing profits on cars.
It's either that or raise your prices to offset expenses. But then we come back to why foreign cars are now American made. It's cheaper, and allows them to be more competitive.
It's a whole new game if you step into car manufacturing. It's not the simple order components and have the cheapest bidder assemble it. That model doesn't work towards profitability once tariffs / import fees, regulations, and shipping are factored in.
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Even Apple has that big pile of cash, it's not like they will spend it carelessly.
Big key element from current Apple business model to the existing Auto Industry: the supply base business models.
Even the electronics component may be Apple's forte, the rest of the components are not. The mechanical components are key for a ground vehicle.
People forget how bad Apple suppliers are in terms of manufacturing quality.
Many/most auto suppliers will walk away from Apple's squeeze approach. Look at the recent sapphire plant mess.
Big key element from current Apple business model to the existing Auto Industry: the supply base business models.
Even the electronics component may be Apple's forte, the rest of the components are not. The mechanical components are key for a ground vehicle.
People forget how bad Apple suppliers are in terms of manufacturing quality.
Many/most auto suppliers will walk away from Apple's squeeze approach. Look at the recent sapphire plant mess.
I applaud the tariffs and fees that get imposed which means jobs stay here or come here. Music to my ears. You are correct though that Apple can't just resort to their slave labor tactics for car building. Much more to a car than slapping a phone or an iPad together.
I still don't see aple actually making a car. They'll make a lot of technology for a car but not the whole car. I mean.... No way.....
Wow, after reading all these former GM CEO rebuttals, I had no idea there were so many successful CEOs posting on MacRumors! 
In all seriousness, whatever the truth may be, I would still like to see how Apple can inject some innovation into the car. Beyond CarPlay. And I don't know what that could or would be. None of us really knows. But I think a lot of things that the automobile industry does CAN use a bit of tech infusion. And who knows, maybe Apple is the one that can get it done!
In all seriousness, whatever the truth may be, I would still like to see how Apple can inject some innovation into the car. Beyond CarPlay. And I don't know what that could or would be. None of us really knows. But I think a lot of things that the automobile industry does CAN use a bit of tech infusion. And who knows, maybe Apple is the one that can get it done!
Not really. Apple is great at taking existing technology and improving it. Nothing "most advanced and revolutionary" in the realm of electrical engineering. And then you have nuclear physics, aerospace, nanotech, biotech, etc... which are all things that have some extreme tech that Apple doesn't touch.
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Seems to me you have very little idea of what goes into a car. You don't just take a piece of steel and make it into a car. The frame has to be designed and engineered to support the components and "crumple up" properly in case of an accident. There is also lot of electrical engineering and mechanical engineering involved. Car aerodynamics are also important. So yes, it is extremely difficult to design and mass produce a car.
Not at all. Apple is a business and has been successful since its resurgence due to them playing it smart. They wouldn't be doing something extremely dumb like "carving a car frame out of a solid block of aluminum" which would cost them an insane amount of money and time. They will do what helps them maximize profits for their shareholders.
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Not a good analogy. Designing and engineering a high tech car that will be mass produced is not easy at all. "Backyard mechanics" do not do any of that.
Former GM CEO makes comments that Apple fans don't like. GM sucks, the car industry doesn't know what the future holds, etc, etc. Apple hires former GM, Ford, Telsa, etc, employees = brilliant move on Apple's part
Hey, aren't you the same PC geek Apple-hater who in 1997 said they would be bankrupt in less than a year? Yeah, must be true that all their products are garbage. That's why they sell millions of them and get top customer satisfaction ratings every year.
Hey, armchair quarterbacks are all the rage on these forums, don't you know?
It just goes to show not even CEOs know what they're talking about sometimes (or most of the time?).
So, does that mean no one should be in the [traditional low margin] car business? The executives at GM and Ford are not pulling up stakes to start a phone business. There are people in the grocery business, where margins are 5%. If only 30+% makes sense, we would all starve for lack of groceries.
You can't just duplicate your success in phones, just because phones are high margin. If you want your $700 billion cash to get to work and bring back returns, whether 30% or 5%, you need to find a market that isn't giving the public what it needs to get. Then that 5% grocery market might be upstaged to 10% or that 14% boring car market might zoom up to 28%. Look at what HP makes on PCs compared with what Apple makes on Macs. It's 50% more for Apple, so if they want to make some auto industry product (battery, dashboard, car), I'm ready to welcome it into the market and let the games begin. Surely it can beat what we now have: 30 models of cars that all look and operate alike, coming from 10 companies.
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