If I were producing a car, I'd look into vehicle as a service.

Which means, one monthly price, a lease like object (but without mileage limits), insurance and any maintenance is included, and when the period over (say 24 months), you can return it or trade it in on a new model for a small fee. In a smart world, the cars wouldn't even need to be totally new, they could go thru a re-manufacturing process to replace most wearable components (like the interior, tires, and possibly repainting).

Apple does two things really well, it makes very pretty products, but it also makes products that are generally less complex in use. The most complex part about automobile ownership is the purchase process (and insurance too), if you can remove the complexity, you can make a much better customer experience.

Apple has indeed started down the path of iPhone leasing.

This is likely the model that Faraday Future is going to attempt (either that or in town rentals).

From one point of view I don't buy in the skepticism surrounding an Apple Car. As many issue could exist, and this article present a long list, Apple has the resources and the capabilities to overcome them.

The problem for Apple right now is that is so huge that any business idea is so small in scale that doesn't move the needle. I mean a 1 billion dollar idea is a great pitch, but for Apple is less the 0.5% in revenue, doesn't make the board level.

From this point of view there are very few industry where you could venture with such a huge scale. The automotive industry is one of them and appears to be ready for disruption. The problem as mentioned in the article is the incredibly low margin. I don't believe you could cut a lot on the cost of production, years of experience have optimized the process an the material that get into a car is that much, you could reduce them by a lot without impacting safety. Apple could try to put a premium on their car, and the margin on ultra-high premium car (Ferrari, Lamborghini...) are higher than Apple's margin. But the price is so high that the revenue is razor thin. The point is, a 30% premium on a device that costs on average 400$ is 120$, doesn't reduce the buyers pool by a lot. A 30% premium on a 20K car is 6K, it change a lot. And if you go in the premium segment is even more.

Final consideration, maybe the price Apple is aiming are not electric car but direct competition with Google's self-driving car. Or if you want car as-a-service. It is something not totally in Apple's DNA but it could provide hefty profit margins. Could be that the release date is 2029 and not 2019?

Somebody is arranging to build a car factory in Atlanta. No names given yet.

That's an interesting news but I don't think it will be Apple. Car manufacturing requires volume to be efficient (like any mass produced product, ça va sans dire). But it is also extremely expensive to ship compare to their retail price (you could put approximately two car in a full size container but 44k iPhones, do the math). Let's try to do the Apple's strategy. Apple could go for the Luxury market (BMW series 7, Maseratis and upper). The price, and more important, the margin you have, is high enough to make the transportation cost low enough. At the same time you don't have enough volume to have multiple factory. In this situation you build just one factory. Atlanta is an interesting spot due to it's good connections with the rest of the US and it's comparatively low labor cost (to the Bay Area). But it is on the east coast while it is probable an Apple Car in this price range will have more buyer on the West Coast. Plus in car manufacturing labor cost is a small factor (especially in the luxury segment). But staying close to the hq is a very important factor, especially for your first model. Plus, if you are planning to source component from Asia (electric motors, chips, batteries) being close to a port like LA or San Francisco could be a benefit.

Let's make the hypothesis that Apple is going for a relatively mass market instead (affordable premium, a BMW series 3, but the reasoning holds also for cheap subcompact). Apple probably needs more than one production plant if it plans to launch internationally, but a single plant is enough for the US market and the reasoning before still holds. Actually, in this scenario Apple needs to work out faster the productions issue so being closer to home is beneficial.

This obviously is true if you think Apple will produce the car. But it doesn't make sense based on their production philosophy, and it will be a massive investment when there are "white label" car manufacture ready to be the Foxconn of Apple Car. The first name I could came up is Magna Steyr but if they go for low volume super luxury there are a bunch of small manufacturer in Italy with a good pedigree (Touring, Bertone) with the know how, the production capacity, and the brand that fits Apple needs.

I'm not saying you are wrong, even if my bet for the plant in Atlanta is for a European Automaker, I'm just saying that looking at the logistics, building a plant in Atlanta is not really effective for Apple. Probably tax breaks could change this balance, but I doubt you could have secrecy and tax breaks for a business of this size.

Do you have a source to this?

I haven't seen any news regarding this in any of the auto websites or related sub-reddits

Good insight into entering the car business. But he missed the only thing that matters.

Apple's car must be centered around self-driving, or it wont be relevant. Tesla's Autopilot represents an automotive phase change[1]. A car without autopilot is like using a fax machine instead of an iPhone.

[1] http://jalopnik.com/teslas-autopilot-system-is-awesome-and-c...

Autopilot is cool, but it's not a game changer by any means. The driver still has to be fully engaged. This is not a system where you can turn it on and then read a book or take a nap.

80% of the benefit of Autopilot is the traffic-aware cruise control. That's basically just a radar unit that keeps you from hitting the car in front. Remarkably useful, but not anything like a phase change.

If and when true autonomous technology arrives, that certainly will be a phase change. And Autopilot is a step (a small one) in that direction. But it is not by itself a prticularly big deal.

(Full disclosure: I've driven maybe 1,000 miles with Autopilot, and a few thousand miles with the pre-Autopilot traffic-aware cruise control.)

Radar/adaptive cruise control is an available option on just about any new ~$25-30k car and was common in the luxury segment for a good while before that.

Right, and other cars have lane keeping too. Tesla's implementation of both is the best out there, but mainly because they're less timid about it. Other manufacturers feel compelled to force you to keep your hands on the wheel and such, even when the technology doesn't require it.

Tesla requires you to keep your hands on the wheel, doesn't it?

Not in general. If the system loses confidence (bad lane markings, tight curve, that sort of thing) then it will ask (and then insist) that you put your hands on the wheel. But on a good road you can let go entirely and it will happily drive this way for a long time.

They are careful to state that you should always keep your hands on the wheel. There's even a little popup on the instrument panel that says this when you engage the system. But they don't enforce it.

The key of autopilot is not the current state of the software. The key is that they have shipped it and their learning curve will be steeper and product development faster and more user-proven than the competitors.

Google had an enormous technology lead but they've squandered it on a clowncar that remains a concept. They're overthinking the product, how can we ensure people aren't afraid of the technology? Make it cute. Riiight. Funny how they don't mention any pre-orders.

Shipping autopilot was bold and smart. Tesla has a deterministic path forward. Meanwhile Google and the traditional car companies are lost in indecision. And Apple is starting out even further behind. Tesla's autopilot is a wake-up call for all of them.

EDIT: Qworg, they can add a sensor to the cars they ship at any time. They did it in the past and you can be sure they are doing it now. The others still need to figure out how to ship a single car.

I wouldn't take it as far as you have - releasing Autopilot this early was the right move, but the current sensor mix will limit the applicability of their data gathering until they ship new hardware.

I'm not sure GoogleX had to approach self-driving as a product. At least, not until Alphabet.

Shipping autopilot put Tesla more or less on par with various other car manufacturers who are already shipping similar features.

Tesla's implementation is the best out there, but it's not substantially different from what you'll find on a high-end Infiniti or Volvo or Mercedes today.

It would seem very much in keeping for Apple to start selling a car geared towards drivers: luxury, control, response, the craft of driving, of a piece with the old "Drivers Wanted" VW campaign (but, yknow, with more Jony). Get that Pro/Creative market locked down.

Then 2–3 years later, after the kinks have been worked out, they do the self-driving model.

If Apple's first car came out today, they need Autopilot, today. Apple can't afford to be 5 years behind Tesla.

Elon: "Should mention that I will be interviewing people personally and Autopilot reports directly to me. This is a super high priority."

- https://twitter.com/elonmusk/status/667519445414252544

Watch the video I linked to above. That's a step change in the meaning of automobile.

This car stuff still doesn't make sense to me.

One big thing I don't understand about these Apple car rumors is what is Apple supposed to be doing that current automotive groups are not? If you're new to a product area, building a car using CMs (makes sense) with subsystems sourced from the CM or outside suppliers (also makes sense), where's the je ne sais quoi that makes the Apple car compelling over other options? How can you have an advantage over the established manufacturers, if you're sourcing parts/knowledge (e.g., BMW's nifty CFRP material) from your competition? What's the sustainable competitive advantage?

An obvious answer would seem to be design, but I don't buy that Apple producing a better UI than the current car manufacturers is fait accompli. On infotainment, CarPlay is pretty frustrating to use, to the point that I question if anyone from Apple has actually used it while driving: legibility is awful (especially for Maps), Siri doesn't work well in the noisy car environment as a primary navigation tool, and touch operation takes too much eye attention. Some of the usability failures are due to current Apple styling choices (e.g., fonts that are too thin), but many are (as I see it) due to the unsuitability of the Apple multitouch UI paradigm for the car. For comparison, I'd rate both Chrysler's UConnect and BMW's iDrive as superior in usability. I have no doubt that CarPlay can be improved (e.g., physical jog wheels), but I see those improvements as teaching away from the Apple's UI paradigm and towards the existing competitors in the auto world. As to interior or exterior design, I also remain skeptical: Apple tends to pick materials that don't wear well in use, and we're talking about a product that will have far longer lifecycle than anything in the current Apple lineup. I'm sure Apple could produce something that looks nice, but plenty of marques make nice looking cars. Nice appearance for cars is commoditized.

Apple's current supply chain and manufacturing processes are a hell of an advantage in consumer electronics, but there would seem to be very little overlap with automotive. I guess that applies broadly too, there seems to be so little overlap with Apple's current corporate experience and advantages in consumer electronics and the automotive arena.

edit: Also, JLG's point on maintenance is poppycock. Electric cars may have reduced maintenance, but to suggest that tires and wiper blades are all one has to worry about is plain wrong. Part of the product lifecycle considerations includes recalls, e.g., Takata airbags.

Say you're Tim, the new leader of Apple. Your greatest contribution to the company has been to solve logistics and operations problems, to the point where the company is vastly more profitable than all of its competitors.

Do you attempt to re-invent yourself as a design-obsessed visionary in computing devices, something you know you will never achieve, or do you look for big manufacturing and operations challenges? Apple is no longer led by Steve Jobs, and Jony Ive is performing a slow-motion exit from stage.

Your maintenance comment is often overlooked - there's also the issues with supplier quality, shakedown, and getting the kinks out of the hard metal bending parts. Just look at Tesla's problems with milling out drivetrains.

What can Apple do different than big incumbents? How about all the stuff HN goes gaga over when Tesla does it?

I think you're selling design as a difference short, for Apple design is holistic and affects the entire product experience not just the look and feel or the entertainment ux.

They design the manufacturing process to squeeze out nickels on the dollar and using CM means they avoid legacy overhead that weighs down behemoths like GM, VW and Toyota. They also don't have any legacy overhead tied to engineering around ICE. As we've seen with Tesla, they had to reinvent almost everything because most of the problems traditional car companies had been working on don't exist in an all-electric vehicle.

Apple designs the buying process, which for cars is nightmare fuel for most people. Even in their normal retail stores, buying is easier, you can pick up some things off the shelf, ring it up yourself right where you're standing with the Store app and then walk out. This may be Apple's biggest advantage from the customer's perspective.

Carplay I haven't used but I think you may be selling this short too, on /r/cars when an industry entertainment guy asked what they should be doing the most upvoted response was: get out of the way and make dumb screens for Android Auto and CarPlay [1]. Maybe you're right though and it is outclassed by some current offerings. Perhaps this area is an Apple weakness but another possibly is that CarPlay is to iCar as the Motorola ROKR was to the iphone.

[1] https://www.reddit.com/r/cars/comments/2vfubz/i_am_one_of_th...

You talk about Apple's materials being shoddy but that is not the impression I have (outside of charging cables). My iphone 3gs and 4s have held up very well and metal frame ipads, macbooks and iphones seem to do even better. Greg Koenig's much linked post about their Watch manufacturing [2] basically said Apple is operating at the pinnacle of craftsmanship when it comes to materials, precision and finish. One quote of many possible: "I see a process that could only have been created by a team looking to execute on a level far beyond what was necessary or what will be noticed. This isn't a supply chain, it is a ritual Apple is performing to bring themselves up to the standards necessary to compete against companies with centuries of experience." There is plenty of room for technical gimmicks here in the auto industry and I fully expect a video of Jony Ive explaining how revolutionary it is for safety when the entire carframe is milled from a single piece of aluminum.

[2] http://atomicdelights.com/blog/a-glimpse-at-how-the-apple-wa...

> They design the manufacturing process to squeeze out nickels on the dollar and using CM means they avoid legacy overhead that weighs down behemoths like GM, VW and Toyota.

GM's legacy overhead was discharged during their bankruptcy. As to DFM and manufacturing costs, the auto market is viciously competitive, and I don't see how newcomer Apple and their CMs are going to do something that the existing manufacturers haven't done already to maintain competitiveness in the current market.

> They also don't have any legacy overhead tied to engineering around ICE. As we've seen with Tesla, they had to reinvent almost everything because most of the problems traditional car companies had been working on don't exist in an all-electric vehicle.

Don't know what you mean by legacy overhead wrt. ICE. As to Tesla, that statement reads bombastic given previous efforts by others in battery electric vehicles. Beyond previous efforts by others, I'd say that BMW has done more innovation with their i sub-brand than Tesla has done, especially wrt. vehicle weight. Tesla does cool stuff, but the evangelism is tiring.

> Apple designs the buying process, which for cars is nightmare fuel for most people.

I completely agree that the current car purchasing process sucks, even for "no hassle" dealers, but how much can Apple do here? So much of the pain is finance- and paperwork-related, and even if Apple brings in their own financing, that can't get around the legal requirements for the paperwork.

> Carplay I haven't used but I think you may be selling this short too…

I agree that CarPlay sounds like a great idea, so much so that I unceremoniously ripped out my car's stock headunit to put in an aftermarket Pioneer unit with CarPlay a year ago. The problem is in the execution. Some stuff is almost magical, like automatically offering to navigate to the next appointment in my calendar; mostly though it's frustrating because it isn't reliable (especially in cell coverage-poor areas) and requires too much cognitive load to use. I have no doubt that Apple could improve it, but I don't know that the will is there because I think they would need to acknowledge that their current look and interaction paradigm aren't suited for in-car use.

> You talk about Apple's materials being shoddy but that is not the impression I have (outside of charging cables). My iphone 3gs and 4s have held up very well and metal frame ipads, macbooks and iphones seem to do even better.

I too have had good experiences with the metals, although the stuff using 6000-series aluminum is a bit dent-prone; I have no experience with the 7000-series containing Apple devices but would naturally expect that they would do much better. I was however specifically thinking of their PU and leather iPhone and iPad accessories: they look disgusting after only a week's use in the lighter colors, and I was mentally picturing the touch surfaces of a car using the same materials.

> There is plenty of room for technical gimmicks here in the auto industry and I fully expect a video of Jony Ive explaining how revolutionary it is for safety when the entire carframe is milled from a single piece of aluminum.

Sounds a little expensive to insure.

Here's one way to look at it: Tim Cook's deep expertise is in logistics, exclusive supplies, and large-scale production runs.

What industry has been stagnating, is hence most ripe for re-invention, and heavily involves problems in Cook's favorite domain?

While Steve Jobs was passionate about computers as wheels for the mind and about gestalt esthetics, Tim Cook is passionate about supply lines. Different people, distinct ambitions.

I can't imagine this is the case, but what if they're building an OS/UI/experience that car manufacturers would build into their vehicles? That would go against everything they've ever done but would be easier and would remove them from direct liability (depending on what features it offered). 30% on a car might be difficult for even Apple to pull off but 30% on a $2-5K option would probably be something most people would spring for. I imagine it would put Google in a tough position, even if they had superior features (like better self-driving).

They can't really innovate the UI. The UI for a car is the steering wheel, accelerator, and brake. They can't change that. They might make a slightly better navigation/entertainment package but honestly I'd rather have a simple radio and manual climate controls anyway. My phone handles music and navigation, I don't need to spend an extra $2K-$5K to duplicate that.

Apple has always produced high quality consumer electronics used mostly for entertainment. Cars are entirely out of their realm of experience. Cars are too competitive and are subject to too much regulation and liability to make 30%. I think it's a huge mistake for them but time will tell.

A better question than what could Apple do better (everything [1]), is WHY would Apple enter the market?

Answer: The automobile is the ultimate mobile platform.

What can I do with the ultimate mobile platform? Keep my users connected. Keep my users entertained. Keep my users happy. Remove inconvenient interactions with the outside world (tolls, drive throughs, parking, driving...).

How can I extract value from the ultimate mobile platform? Sell (or lease) the platform. Sell advertisements. Collect a percent of each interaction with the outside world. YOU DON'T HAVE TO PICK JUST ONE! You can mix and match depending on the application.

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Manufacturing ONE car is not particularly difficult. Designing ONE car is a little complicated. Selling ONE car is pretty easy.

Manufacturing vehicles at scale is hideously complicated[2]. A small example using product volume alone: a MacBook Pro is 1770.6 cm3; the Frunk of a Tesla is 150079 cm3 - you can fit almost 85 Macbooks into one of the smaller storage areas on the vehicle.

85 MacBooks cost in the same ballpark as one Tesla.

You can compare almost any other stats and get the same picture.

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1. What's the biggest room in the Universe? The room for improvement.

2. I used to work in IT for Automotive Manufacturing. "We have all the problems of a major theme park and a major zoo", and we have to make cars too!

all I want in life is for my car to have Apple Pay so that I can go through the McDonald's drive-thru and have to do nothing but order my food. bonus if it knows my order ahead of time because I always get the same thing and I have to say nothing at all.

If it is self driving and super smart, it detects when you are hungry, automatically goes through the nearest drive-thru, order something based on your nutrition requirements, and you just have to chew when an inbuilt robotic hand pushes the food into your mouth.

Can't we get rid of the chewing bit, it's such an inconvenience.