I'm just not getting this rumor. This is so far outside of apple's expertise and market direction that it really causes me to scratch my head,.
Look at the growing pains Tesla went through (and is still) because they have no dealership infrastructure and the regulations for years required this. I know times have changed in that endeavor, but selling cars is such a low profit margin high risk endeavor. It seems rather risky to even spend any money on the experiment.
I hope it's a false rumour. I would like them put more effort in their current products line. A faster refresh cycle for their products (mini, cinema display,..) and update their softwares. A few years back you would see annual refresh of iWorks and iLife, now they seems to let go a lot of things. It's too bad they are doing so good, they don't have any pressure to fix that.
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Sounds to me like Apple is building the automobile to specifications just to have a car to test their secret software on.
Apple is not going to be making cars. Not enough profit margin in it.
You're kidding, rigth? If Apple doesn't make cars, it's definitely not because there isn't enough profit in it. Toyota is expected to make $18.1B in profit this year. Very few companies make that much in any industry and that kind of money would actually move the needle for a company the size of Apple.
The problem with high end cars is you need a dealership network to support them. If you want to compete with Porsche and BMW you need a dealer network that can support and sell your vehicles and that requires people who will invest millions in building dealerships. To get that you need to show them they will make money. Being a new guy, even with Apple's name, will make it a tough sell.Net profit in high end cars, 10-18%, gross margins 25-30%. That doesn't sound so bad hey! Not sure were you get low margins. 8 car companies are in the top 100 of worlwide companies, 5 in the top 50. Its one of the most lucrative business to be in, about on par with high tech.
There's a simple reply to your whole argument: iPhone 2007 (that is vs all the long time handset makers that scoffed at it.
I'm not saying Apple will make a car. But if they are determined to do it, they will do it and kick some ass.
Apple is branching out. Maybe they can come up with an idea that will increase the cruising range of the electric car to that of a regular internal combustion car. Find a way to make the car relatively easy and quick to recharge at home. And can find a way to mass produce the car at a price that doesn't require Warren Buffett-style money to pay for it. I give them props for the attempt, but I won't hold my breath quite yet.
Wrong. As the article mentioned there is Magna-Steyr.
They produce(d) cars like:
There are other contract manufacturers, too.
- Mercedes-Benz G-Klasse,
- VW Golf Country
- Audi V8L
- Jeep Grand Cherokee
- Mercedes-Benz M-Klasse
- Mercedes-Benz E-Klasse
- Saab 9-3 Cabriolet
- BMW X3
- Chrysler Voyager
There is a whole industry for contract car R&D: From parts, engines (e.g. AVL-List) to complete cars.
Apple could build a car like an iPhone. Design it wholly or partly and have it build to specification.
Tesla is still far away from being "mass appealing". Outside of tech geeks and car enthusiasts people don't even know a Tesla if they see one. Last November Tesla was doing a demo ride at my workplace and coworkers asked me what type of car is parked outside. And because of the extremely high price why should people even care?
And didn't I read this week that tesla sold less than 35,000 models in 2014. Maybe that's good for an exotic but thats far from mass appealing. And I see more Porche Panamera's on the road than I do Tesla's; a car which is recognizable from the front and back.
Personally I can't see Apple straying so far from their core business...there's something fishy about this.
A minivan though?
Sounds very interesting, but I'd have to sell both my kidneys, my neighbor's house, and probably my eternal soul to afford it.
I don't buy this. It would've been much easier for Apple to buy Tesla, a growing valuable brand establishing itself in the industry as the one to follow, who already has cars in production and who's company philosophy is already closely aligned with Apple's.
It would be better for Apple to buy or partner with Tesla instead. Tesla is working on improving the battery cells and that's always something that Apple wants.
I suspect Apple is not working on building a car but instead doing an R&D project to figure out new innovations to improve various technologies, such as batteries, better interfaces for CarPlay, sensors (like automatic driving, the AI work alone can improve iOS's sensor framework), and so on. A car can do so much for Apple than trying to come up with different hardware projects.
Again, partnering with Tesla in this case will benefit both companies at the same time without competing.
Sounds to me like Apple is building the automobile to specifications just to have a car to test their secret software on.
Apple is not going to be making cars. Not enough profit margin in it.
a few tech sites post some rumors about apple working on a car, the wall street journal picks up on these stories, and writes their own story about it. the tech sites see this story, and post about it, thinking that wsj got their story from a credible source, and the circle keeps going...
Agreed, Tesla car is way to overrated on this site, I live in Europe and here almost everyone never heard of tesla car, don't get me wrong i think is nice car but the price makes it unlikeable, as a rich person i rather just pay $10000 more and buy a Lamborghini or Ferrari
What scale? Apple would be starting from 0. They have scale on iPhones and iPads. Last I checked, cars aren't built on the same assembly lines.
Musk has to want to sell. I don't see that happening.
What are you talking about? Ford alone has assembly plants in 24 countries. GM has 25. You should really stick to topics of consumer electronics.
What makes you think Apple can build a better car than Tesla? or even Tata or even Yugo for that matter? This makes no sense. Expertise in consumer electronics is not transferable. It's totally okay to be a fan, but at least express it with a hint of realism.
For the record, I think the idea of Apple building a car is pretty silly. I doubt they would ever venture down that road.
The Tesla starts at £50k in the UK. It would cost a lot more than £10k to upgrade to a Ferrari or Lambo. Price wise the Tesla is more in line with a BMW, Merc or Jaguar. I'm actually considering buying a Tesla at the moment. I think it looks awesome.
The BMW or Merc you could get for the same price is just so much better though.
Move to Norway for the perks. Plus, I'd rather trust a company that builds space ships than one with a building that resembles one.
http://insideevs.com/tax-exemptions-in-norway-cut-tesla-model-s-price-in-half/
You can drive in the bus lane
Free public parking
Free access to toll roads
No registration fees
No sales tax
Income tax deduction if you drive for a living
VAT free
Net profit in high end cars, 10-18%, gross margins 25-30%. That doesn't sound so bad hey! Not sure were you get low margins...
So the government enacting ludicrous handouts to those who by high end Teslas at the expense of the taxpayer. Got it.
You have to ask yourself....what are Apple's core competencies? Consumer electronics, desktop and portable computing, software in various flavors(OS and apps), TV interface device, and now a quasi luxury wearable device. And now the rumor is a totally new industry for them: the automobile industry? I don't buy it. This is an already crowded space with electric cars by tesla, bmw, Mercedes and Toyota. To start a new product and production lines takes years. Yes, Apple is flush with cash but still it doesn't seem to make sense. Now if the rumor was that Apple Would develop the software/UI for car companies, I could believe that. Or that they had plans to buy a car company, even that could be believable but to start from scratch? No way.
Great post and although worldwide things are different, Apple better be building a pickup truck if they plan on competing with the big boys in the U.S.
I can picture it now... The new electric Apple A-150...
I don't think anyone's really provided a valid reason why Apple can't build a car.
1. Its a low margin business -> So was the phone business, music player business, and the computer business. All are small margin businesses today yet Apple is very successful in each. Premium cars are not low margin.
2. It's not their "business" -> So what is exactly? They are a product company, notice it's not called "Apple Computer" but just "Apple". Was the iPod business their business? How about the iPhone? They were a computer company after all. You have to look no further than Steve's and Tim's cooks, "we enter businesses in which we can make a meaningful change." They are a product company, what is a car?
3. They should just buy Tesla -> Why? Their market cap is absolutely insane! Why spend that kind of money when you can re-engineer it yourself for a tenth of the price? Tesla's patents are free! Tesla has struggled with manufacturing and hitting targets, they just missed their delivery target when they reported last week. Musk said he's probably stepping down once Model X comes out. Apple has the resources, and the manufacturing experience to outshine Tesla in this regard. As for the engineers, they'll come aboard once the see the product, and according to the article they already have a 100 or so.
4. They have no infrastructure to sell it -> Now that Tesla has paved the way, they can sell them in their stores. But a more likely scenario is partnering with a car company/dealerships. Think Apple Pay, Apple didn't circumvent the Credit Card companies, or the banks, or the retailers but rather partnered with them and provided a bonus (security). Why is it such a stretch to think Apple wouldn't do the same here?
The car business is ripe for change! Why do I have to drive to a dealership to check a warning light and pay $100? Why can't this be displayed on my phone with a complete explanation? I can provide many more examples where technology change the way we interact with our car. I for one hope they do produce a car, and I look forward to see how it impacts all other companies.
The real question is, will MS, Google, and Samsung build a car now too?
With all that money I think Apple could start a different division that has no relation to current iDevices. Be it a car or microwave oven. If you take away the iPhone how much is Apple really worth? What if Apple releases iPhone duds year after year? There are no guarantees in this business. They could very well have a Samsung year. The tech game is very unpredictable.
Can't expect that Apple will have knock out years each and every time.
I have to think Apple and Tesla have been in serious contract negotiations about something and they are both trying to intimidate/bully each other now. First with Musk comments and now with all these Apple rumors. I mean Apple is not stupid enough to put this minivans out there in public if they are working on a brand new car. I think both companies would greatly benefit from each other. I can imagine a scenario where Apple acquires a portion of Tesla and Musk becomes a board member of Apple. Apple will acquire the ingenuity of Musk, something which Apple hasn't had since Steve Jobs and their battery technology, and Tesla could use Apples software and cash flow. Plus, SpaceX is Elons true love, he will need to devote more of his time and effort with them in the next 20-30 years, after all, I don't think he can oversee Tesla operations from Mars.
Actually you would have said it was silly for Apple to get into the online Music business
You would have said it was silly for Apple to get into the Phone business
You would have said it was silly for Apple to get into the Watch business
so why would it be silly for Apple to get into the Car business?
Answer it would not!
I'm just not getting this rumor. This is so far outside of apple's expertise and market direction that it really causes me to scratch my head,.
Look at the growing pains Tesla went through (and is still) because they have no dealership infrastructure and the regulations for years required this. I know times have changed in that endeavor, but selling cars is such a low profit margin high risk endeavor. It seems rather risky to even spend any money on the experiment.
The problem with high end cars is you need a dealership network to support them. If you want to compete with Porsche and BMW you need a dealer network that can support and sell your vehicles and that requires people who will invest millions in building dealerships. To get that you need to show them they will make money. Being a new guy, even with Apple's name, will make it a tough sell.
If you go really high end against Ferrari, Panos, McLaren, Bugatti you don't need as broad a network but bow you are competing in a market where name is as important as performance. Apple could no doubt sell some but will they build a fanbase like some of the famous marques?
Yeah no license plates and it parks wherever it wantsThis was Steve's vision.
Actually I would have said none of the things you attributed to me. I would say your leap in logic is pretty silly. All of those areas are in consumer electronics, Apple's bailiwick.
Online music business - iPod: Consumer electronics
Cellular communications - iPhone: Consumer electronics
Wearable tech -watch - Consumer electronics
Apple is a consumer electronics company. The automotive industry is not consumer electronics. Definitely not Apple's bailiwick. The auto industry has low profit margins. Apple doesn't and probably never will. The auto industry is heavily regulated by the gov't. That's why they have a huge lobbying arm. Apple traditionally shuns that route. Apple primarily sells low cost, high margin commodity items. The auto industry is about high cost, low margin items. There are a number of reasons why it doesn't make sense.
They tried to buy Tesla? When? What proof?I don't think Musk will ever sell, that's like saying Steve Jobs would had sold Apple. Never gonna happen, Tesla is his company, he build it. Also, I think it's obvious that Musk didn't play ball a year ago when Apple tried to buy them and now they are the google of cars to Apple.-