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

[JHankwitz]

I knew this would be the first post. And I am so disheartened to be proven right.

Just because Apple has billions in cash from successful products, does not have any correlation whatsoever to their ability to enter a new market (both new to them and to industry as a whole) without making mistakes. I'd like to point out that in no way do I think Apple should avoid the sector, as the GM former CEO states, because as a company devoted to quality, and who has tons of resources ($$$), they'll be hopefully able to do it justice. But just because they have the means to toy around with the idea of a car, do extensive research, etc... doesn't mean they know exactly what they're doing. Generating billions of dollars in profit on consumer electronics doesn't indicate they know how to make a car.

So true, but it doesn't mean they're likely going to fail.

 

[neuropsychguy]

This coming from company that had to get help from the government? Yeaaaaaaaaaaaaaaaaaaaa...

Apple doesn't get help from the government? What about that nice new solar farm they'll build with a 30% tax credit?

This isn't the bailout GM received but it is help nonetheless.

 

[julianps]

'They Have No Idea What They're Getting Into'

They mobile industry was fast to tell Apple how little it understood at the launch of iPhone. And sure Apple gave way on a bunch of stuff (subsidised phones) but not on others (user experience) and in the end the mobile industry both survived and moved for ubiquitous 12 month contracts to ubiquitous 24 month deals. So, everyone won.

The motor trade thinks they're innovating but with the exception of top-end marketing they're sitting fat, dumb and happy believing that they can stave off the finance industry eating their lunch for them (the way airtime providers enslaved the phone makers in the first wave of mobile) and hoping they can use software obsolescence to sell buyers onto a 36 month upgrade cycle.

And so long as there's fossil fuel engineering they might have a point, because right now they don't have to worry about the fuel in the tank, but come batteries they don't. Because unless they work out a way to own the market for batteries, recharges and technologies their simply going to be building a cart to carry someone else's profitable product from parking-place to recharging-point.

 

[nikicampos]

I think that if there's a new market for Apple that can be good at is electric cars, the two things about electric cars that need to be great are batteries and software, Apple has plenty of experience in both.

And for me the most beautiful cell phones, computers, laptops, accessories are from Apple, so the car can truly be amazing.

 

[area211]

My same thought. Exactly the same things that were said about the iPhone. These people have been so entrenched in their own way of thinking for so long that it's almost incomprehensible that someone from outside of the industry could do the same thing and do it better.

Perhaps his quote might someday live up to these naysayer gems:

"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."
Ed Colligan, Ex-Palm CEO, 16 Nov 2006


"How do they deal with us?"
Ed Zander, Motorola CEO/Chairman, 10 May 2007


“What does the iPhone offer that other cell phones do not already offer, or will offer soon? The answer is not very much… Apple’s stated goal of selling 10 million iPhones by the end of 2008 seems ambitious.”
Laura Goldman, LSG Capital, 21 May 2007


"Apple should pull the plug on the iPhone… What Apple risks here is its reputation as a hot company that can do no wrong. If it's smart it will call the iPhone a ‘reference design' and pass it to some suckers to build with someone else's marketing budget. Then it can wash its hands of any marketplace failures… Otherwise I'd advise people to cover their eyes. You are not going to like what you'll see."
John C. Dvorak, tech columnist, 28 March 2007


"There's no chance that the iPhone is going to get any significant market share. No chance. It's a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I'd prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get."
Steve Ballmer, Microsoft CEO, 30 April 2007


“Apple is slated to come out with a new phone… And it will largely fail.”
Michael Kanellos, CNET, 7 December 2006


“The iPhone is nothing more than a luxury bauble that will appeal to a few gadget freaks.”
Matthew Lynn, Bloomberg, 15 January 2007


“Apple begins selling its revolutionary iPhone this summer and it will mark the end of the string of hits for the company.”
Todd Sullivan, Seeking Alpha, 15 May 2007

 

[samcraig]

And in other news - Sapphire screens for iPhones. The biggest and baddest tech company somehow still wasn't able to make this happen. I don't fault them for it. At the same time - having money to throw at something doesn't automagically equate to success.

Apple will figure this out. Or it will figure out a way to make it irrelevant.

Apparently Apple's attempt to get into the television market fell apart because the providers of content already had contracts with the likes of Comcast to prevent a newcomer like Apple from revamping the television.

Apple didn't need to crack the entire phone market when it came up with the iPhone. It signed exclusive deals with certain carriers.

It could try a similar tactic with an Apple Car. If their car is both electric and automatically driven, they could partner with someone like Disney to ferry families from the various hotels to the parks (along private roads). The journey could feature "random" bicyclists and pedestrians (actually Disney cast members). For a lot of people, this would be their first experience with autonomous cars. For Apple, it would be a showcase of its driverless car tech. For Disney, it would be an attraction in itself, both for the passengers and for, say, other guests dining in a restaurant overlooking a "busy intersection".

And lose money hand over fist. It is a bad idea because:

• Apple has no expertise in drive trains or power plants or doors or airbags, or windows, or any of the thousand things that go into building a car. These are all different branches of engineering from the computer and devices they have been making. Engineers are not interchangeable parts. It would be like taking a Psychologist and asking him to do cardiac surgery because hey, he is a Doctor.
• Even if you accept that car interfaces are ripe for disruption, and I don't, they can enter that field without building a whole car.
• The automotive industry is not ripe for disruption. There are a lot of players in the market. Apple has nothing to bring to drive trains, or safety, or interior design that others aren't already trying.
• This reminds me of all the talk about an Apple television set. You know why we haven't seen one? Because lots of other players are in the market already and Apple could not disrupt it.
• So much of cars is driven by laws and lawsuits and liability that Apple could not break out of the box as they like to do. An Apple car would still have the same layout that most every other car on the road does because that's what the law requires.
• Apple has no dealer network or trained service technicians. All of that would have to be built up from zero. People expect to have a dealer fairly close by. The exception is specialized boutique cars like the Tesla and oh look, they're losing money.

Apple making things for cars, improving maps, coming up with an interface and controls is good. Invent the best in breed and let other companies install it in the cars they make. Apple does not have to reinvent the wheel to make a better car.They would lose their shirt on such an endeavor.

Honestly, Apple doesn't have to know anything about constructing vehicles. They will hire the best to do it for them and grow into that market.

Also, the car frames are only made of steel. The rest is cheap fiberglass and plastic, basically. I'm pretty sure apple could beat every company down for giving us a unibody steel vehicle. One that looks great and is great for your safety.

I'm ready for Apple to be on top completely. Technology will be integrated into everything we have/do because it makes life better. Period. This is bound to happen.

 

[S.B.G]

Apple has almost $200 billion in cash....GM had to be bailed out by the tax payers.

Apple knows precisely what it's doing.

I am by no means an expert on this stuff, but despite what the guy said, I think the hardest part of building an automobile in the US is all the government regulations they have to adhere to before they can produce and sell one.

The actual manufacturing process could easily be handled by Apple, I'm confident of that.

 

[WinstonRumfoord]

The best thign that could have happened was letting these ginormous, and poorly run companies fail.

the factories, plants and everything would have sold off for ridiculously cheap and you would have seen dozens of new small car companies take over. instead the big 3 just got to 'reset" and continue to operate their failing ways.

Totally. I wonder who to write when my company fails due to my own ineptitude? Because you as a fellow citizen really owe it to me, right?? Right?

 

[monaarts]

Then please explain what those experts from Mercedes, who have nothing to do with infotainment, are doing at Apple now?

Software that can make a car self driving needs experts like these guys. If Apple has the self driving and navigation software within the iPhone and all the car companies need to do is put certain sensors on a car, it can be an industry changing thing.... What will Apple call it... CarKit maybe?

 

[bmelson0412]

And in other news - Sapphire screens for iPhones. The biggest and baddest tech company somehow still wasn't able to make this happen. I don't fault them for it. At the same time - having money to throw at something doesn't automagically equate to success.

That wasn't Apples fault at all. The sapphire company they went with were already going into bankrupt. You're irrelevant.

 

[BJMRamage]

well, Tesla jumped into the Automotive industry...they seem to finally be doing well now.

maybe (without reading the entire thread) Apple is pulling in lots of Auto folks not to build a new car but to comprehensively build some advanced CarPlay/Home Integration setup and supply it a battery and work for the entire car, not just a single unit. but by powering and sensing more about the entire car's platform.

 

[doelcm82]

• Apple has no expertise in drive trains or power plants or doors or airbags, or windows, or any of the thousand things that go into building a car. These are all different branches of engineering from the computer and devices they have been making. Engineers are not interchangeable parts. It would be like taking a Psychologist and asking him to do cardiac surgery because hey, he is a Doctor.

Apple wouldn't be hiring computer engineers to create the drive train. And just because an experienced drive train engineer goes to work for Apple, she isn't going to forget all she knows about drive trains. That would be like taking a cardiac surgeon and an experienced team into a hospital that previously was known mainly for psychology and thinking that the cardiologist was now only qualified to ask probing questions about your relationship with your father.

 

[nouveau-apple]

If their car performs anything like their current products. (Like maps) I wouldn't dare get inside one.

 

[blucurv]

How about working on getting your phones and computers/OS's squared away first.

Why should Apple fix MS/Google's problems? (OS burn)

 

[00sjsl]

Yeah, just like they didn't know how to build phones either.

They buy in the modem part from Qualcomm, so arguably there using Qualcomm's know how, rather than their own.

 

[LordVic]

I think that if there's a new market for Apple that can be good at is electric cars, the two things about electric cars that need to be great are batteries and software, Apple has plenty of experience in both.

And for me the most beautiful cell phones, computers, laptops, accessories are from Apple, so the car can truly be amazing.

The problem is that Apple doesn't currently have software that can handle automotive requirements.

it's been mentioned before:

automotive requires a fast, stable and real time Operating system.

Apple does not currently have an OS that fits this. its one thing to drive a head unit with carplay iOS, but we're talking about instantaneous, real time car telemetric and controls.

I don't know about anyone else. But i wouldn't trust my car's electronic system (which powers everything including steering now) to iOS or OSx... I use both, and neither are capable of core car systems.

There are so many unknowns in these stories. interesting to see that Cook and Apple have really doubled down on secrecy, cause there just isn't enough details on leaked information to make any real guess on exactly what they're doing

 

[Iconoclysm]

i love apple, i love all their products i think they're great and reliable but am I the only one who agrees with this guy? Apple had issues and still has issues with their maps app and they want to get into the auto industry... I think they're in over their heads. At the same time id love to be proven wrong

Their app itself was always fine - it was the data that was bad (collected by other companies, btw). And you're comparing it to its competition that had what, 9 years of collecting map data before Apple jumped in? It launched too early but there were legitimate reasons for that too, with Google's contract about to expire.

 

[bawbac]

Tim looks around the office, sees no one looking for him and darts for the door with his golden parachute...

 

[Iconoclysm]

The problem is that Apple doesn't currently have software that can handle automotive requirements.

it's been mentioned before:

automotive requires a fast, stable and real time Operating system.

Apple does not currently have an OS that fits this. its one thing to drive a head unit with carplay iOS, but we're talking about instantaneous, real time car telemetric and controls.

I don't know about anyone else. But i wouldn't trust my car's electronic system (which powers everything including steering now) to iOS or OSx... I use both, and neither are capable of core car systems.

There are so many unknowns in these stories. interesting to see that Cook and Apple have really doubled down on secrecy, cause there just isn't enough details on leaked information to make any real guess on exactly what they're doing

What in the world makes you think they'd run those electronics on iOS rather than run them on a very basic, very common OS and allow iOS to access its APIs? Also, what makes you think they can't license it...hire devs who have experience with it...etc etc.

 

[samcraig]

That wasn't Apples fault at all. The sapphire company they went with were already going into bankrupt. You're irrelevant.

Wow did you miss the entire point that I was making.

 

[pkoury]

Prediction: Apple is developing a self driving car solution to work with any car. It looks like this:

 

[Cameron Hood]

Replies...

Why do people here have to constantly kiss Apple ass?

A car is a low margin high competition field. It's also one where you need to know how engines work, change oil, etc. You need locations where somebody can come to get their car serviced, you need to hire workers to do it, etc. All of these things could take years.

This is kind of like a thermonuclear astrophysicist declaring his intention to retire and join the UFC, while all of you clap at once. There's a chance the scientist could have a muscular body, or a big body build that a few years of gym would bring out, but the main chance is that he's a wimpy guy who is gonna get his ass handed to him.

What a joke this guy is.
What he doesn't realize is Apple isn't going to sell a 10 cent car. It will be a car that everyone wants, and if they want it, they will pay for it. Margins will be plenty high, or they wouldn't even consider it.

Askerson certainly isn't in a position to tell Apple what they should or shouldn't do.

Phones and cars are so far different from each other. Cars require such strict requirements that a lots of ambitious car manufacture went belly up.

Then please explain what those experts from Mercedes, who have nothing to do with infotainment, are doing at Apple now?

i agree....seriously apple doesn't know what they are getting into. stick to electronics. i can see the headlines now: icar, the self driving car, plunges off a bridge while using apple maps to navigate. lawsuits ensues.

And lose money hand over fist. It is a bad idea because:

• Apple has no expertise in drive trains or power plants or doors or airbags, or windows, or any of the thousand things that go into building a car. These are all different branches of engineering from the computer and devices they have been making. Engineers are not interchangeable parts. It would be like taking a Psychologist and asking him to do cardiac surgery because hey, he is a Doctor.
• Even if you accept that car interfaces are ripe for disruption, and I don't, they can enter that field without building a whole car.
• The automotive industry is not ripe for disruption. There are a lot of players in the market. Apple has nothing to bring to drive trains, or safety, or interior design that others aren't already trying.
• This reminds me of all the talk about an Apple television set. You know why we haven't seen one? Because lots of other players are in the market already and Apple could not disrupt it.
• So much of cars is driven by laws and lawsuits and liability that Apple could not break out of the box as they like to do. An Apple car would still have the same layout that most every other car on the road does because that's what the law requires.
• Apple has no dealer network or trained service technicians. All of that would have to be built up from zero. People expect to have a dealer fairly close by. The exception is specialized boutique cars like the Tesla and oh look, they're losing money.

Apple making things for cars, improving maps, coming up with an interface and controls is good. Invent the best in breed and let other companies install it in the cars they make. Apple does not have to reinvent the wheel to make a better car.They would lose their shirt on such an endeavor.

Cars now are modular; Mercedes/BMW/Audi/Volvo don't make electronics for their cars: Bosch does. They all use the same stuff. They don't make transmissions; ZF does. Etc., etc. Cars are modular now; plug and play. The individual carmakers make the chassis and interior (somewhat) according to their designers/engineers; it's a question of managing the parts supply. Apple doesn't make their graphics cards, or their ram, or their displays, etc. It's design and management, something they do better than anyone else in the world. Jony Ive, the worlds greatest living industrial designer, is a car guy, and he's probably sick of seeing the watering down of concepts. I think the Apple car, if it is a reality, will be every bit as gorgeous as the current iMac computers are, an the mouse/keyboard that goes with them, and will probably be the engineering marvel that the current Mac Pro is, with design innovations no one else has thought of. And the whole car will be environmentally sensitive, gorgeous, and as reliable as a Mac computer. I think they will be GREAT at it. Dan Akerson's a grossly-overpaid moron, one of the designers of the 2008 financial calamity, and you're listening to HIM? The guy should be in jail.

I'm ALL FOR the iCar.

Cheers,
Cameron

 

[macgabe]

Everybody's thinking they're going to make some kind of self-driving Tesla.

But what if they did the opposite?

A stylish, comfortable, totally-intelligent, well-made, self-driving electric for $5000 !!

I'd go out and buy one tomorrow. And be happy to replace it for a v.2 in 4 years' time.

Emerging market sales would be colossal…

 

[senzung]

I give him two words: think, nokia.

It is this arrogance at peak that gives chance to new kid in town(not specifically apple) bring down giants.

 

[blucurv]

A signal of anxiety.

My thoughts exactly.