If Apple ventures out of computing and into areas that need that kind of capital to be feasible, you start comparing lots of medium to low margin industries, the car industry being one of them.

When you look at Apple's brand, company focus and in-house experience, there's only a few industries where diving into could make it a relatively safe bet for the capital involved.

Cars make sense because they are complex technology, already very brand and UX focused in their usual sales processes, and there is a lot of money to be made in the optimization of the supply chain, all things which Apple is second to none.

There were surely other options and I imagine are still being discussed in Cupertino.

Large Scale Urban Development seems like a similar viable candidate, but the salescycles and product lifecycles are probably too much at odds with the rest of Apples business. But the prospect of an build to order Apple Campus must seem quite exciting to some people that are having a blast building the new spaceship.

Among other industries, i could also imagine the Hotel industry being on their marks for similar reasons.

Compared to options like that, building cars just looks like selling sugary water. Why not put 90% in the pot and really move things forward?

Job security? I bet the shareholders would revolt at the first sign of faltering on a $150 billion project. Sugary water might not be exciting, but it is nice and safe and won't get the C-level execs fired.

The biggest problem will be dealing with their influence over state legislatures. Tesla already upset dealerships; the idea of someone like Apple (with their capital on hand, experience, and influence at the federal level) following in Tesla's footsteps will be enough to terrify dealerships into some pretty heavy-handed action.

As for the supply chains, there are a lot of differences between the supply chain for consumer electronics manufacturing and automobile parts, but Apple's experience is still intensely relevant. I think it's likely that they'll have a lot of successes in dealing with it, despite those differences.

Supply chain -> Assembly (manufacturing) -> sales (Dealership)

Tesla's attacking laws that say that all new autos have to be sold by dealers. That's quite different, and only a few states have such laws.

Back when the iPhone first came out a lot of people dismissed it because it wasn't a very good phone - the audio quality and reception tended to be worse than a good Nokia. Who cares if it has all these extra whiz-bang features like a touch screen and a web browser if it's not a very good phone, the thinking went. A lot of people didn't appreciate that Apple was creating a communication and information retrieval device, and not just a traditional phone with some extra features.

I suspect Apple will create a car that provides a great experience for people getting from point A to point B. It will probably not be a great car to drive. But it will probably be an awesome car for passengers. My guess is that they are betting that there will be more passengers relative to drivers over the next decade or two, and that passengers will, in a perhaps indirect way, become a bigger force in car buying decisions than they have been in the past.

So, by the metrics traditionally used to compare cars it will probably be only an incremental improvement over existing models - or it might even be a step backwards. But by the metrics that we'll use to evaluate cars in ten or fifteen years it will be an amazing improvement.

You're describing the launch of the Prius and the GT86, both of which were bagged for tyre size, horsepower, and other metrics. Both have done quite well for Toyota.

Much like the original iPhone.

Oh, absolutely. They loved the handling and similar less quantifiable qualities. The people bagging it were the people saying, "Only 200HP? Why are the tyres so small?" while the folks looking at the overall picture were saying "this is a hugely fun car in a very practical way."

Isn't fully autonomous the goal precisely for this reason?

For example, I'd gladly forget about Lyft and Uber and use a new ride service if their drivers all had cars that offered me a better experience than what a Toyota Camry provides today.

Also, in-car entertainment has become hugely popular for family cars like mini/sport-utility vans.

My guess is that Apple will create an in-car infotainment system that makes current systems look like phone web browsers from 2005.

Why don't you use a limousine service, then? There are surely services in your area offering to drive you around in a long-body S-class or 7-series, which are actually purpose built for back-seat comfort.

My guess is you can't afford that. Why would you then be able to afford whatever premium Apple car ride service in the future?

You're describing the launch of the Prius and the GT86, both of which were bagged for tyre size, horsepower, and other metrics. Both have done

"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."

Palm CEO Ed Colligan in 2006:

"We’ve learned and struggled for a few years here figuring out how to make a decent phone," he said. "[Apple is] not going to just figure this out. They’re not going to just walk in."

A smartphone was solidly within Apple's expertise in 2007. It's a small consumer electronics device (iPod, Mac) with a graphical UI (Mac OS X). Apple had tons of experience building (or more accurately, outsourcing the building of) small electronics. What was tricky about the iPhone was the RF stuff, getting the carriers to cooperate, and cutting data usage to squeeze into the crappy data plans available. Except RF stuff is nearly off-the-shelf, and Apple cut the Gordian Knot for the other two items by partnering with an underdog carrier in exchange for unlimited data plans.

A car is far outside Apple's expertise. Are they going to outsource it to Foxconn like they do with the iPhone, and ship them across the Pacific? Doesn't seem feasible. Will they buy or build their own factory? Doable, but totally new for them. What about sales, service, and support? The iPhone was able to use Apple's extensive network of existing retail stores for that, but cars need garages and mechanics.

Obviously, it can be done. Tesla pulled it off with far less. But there's plenty of room for Apple to crash and burn, too. (Figuratively, one hopes.)

There is the example of this Italian car sharing service http://www.sharengo.it/

They designed their own car and a Chinese company built it.

According to the sources the cars are either designed in Italy and made in China or designed by a Chinese company with Italian designers (not only the style, but at least the navigation system and battery management).

I found some references to the Xin Da Yang Electric Vehicles and the Shandong Xindayang Electric Vehicle companies, which should be part of the same group anyway. The model is called ZD1 and it's a custom version of the iCar0 http://greengomoving.it/prodotti/ That car was sold in Italy at 13 k EUR but didn't sell enough. The business was relaunched as car sharing and it's doing well enough judging from the number of cars I see around. I plotted the invoice numbers against time and it's a line, which could be OK given it's limited to a few cities and they have competitors. They could already have saturated the market unless they open in other cities.

I think they have at most 2000 cars in Italy but the Chinese companies could be making more. I found it on alibaba https://www.alibaba.com/product-detail/China-eec-l7e-80-elec... They say up to 5000 cars per month, unit price up to 8000 USD.

Sources, all of them in Italian

http://www.ilsole24ore.com/art/motori/2015-05-21/share-ngo-p...

http://www.veicolielettricinews.it/sharengo-il-primo-car-sha...

http://www.alvolante.it/news/milano-il-car-sharing-elettrico...

Whatever thwy'll be I wonder if we'll be able to operate those cars with an Android phone or they'll be iPhone only.

I have no idea, but they seem to be pretty good at outsourcing manufacturing where it makes sense to do so. I don't see that as a significant blocker to an Apple automobile.

Of course Jobs is gone but I would guess there are others still at Apple that were involved so that it might not be totally new to them.

NeXT Computer Inc. eventually became NeXT Software Inc. and ceased manufacturing hardware. That was 23 years ago. I'd be surprised if any significant presence from that manufacturing team remained in Cupertino today.

"The factory that Jobs had configured to produce 10,000 computers every month produced hundreds every month. Because of the low volume, human labor was cheaper than maintaining the automated equipment."

http://lowendmac.com/2013/next-years-steve-jobs-before-trium...

But, he is gone and as others note it was a long time ago. It's probably not very relevant, in retrospect.

Looking more recently, Apple does have their own factory in the US to make the Mac Pro. I wonder if any of that was intended as a testbed for in-house manufacturing in general.

I still think that, with cars, Apple will try to do what it did with the Apple TV. Just like they built something that works with existing TVs, they'll try to build something that works with existing cars (or a few car partners). I don't think they'll try to manufacture cars.

In the old days we called it "shooting the breeze".

I'm sure an auto industry exec or engineer might chime in with some insight, but even that doesn't prove anything, just might illuminate the challenge Apple has ahead of them.

It doesn't matter a lot to Apple as they have captured a large portion of the segment of the market that is willing and able to spend more, but Android has more of the total market.

Ballmer was right. He underestimated the amount of money they would make, and also underestimated the size of the various markets, and ALSO got it wrong about who would be the "other" OS but......his core point was correct.

Maybe a year ago Apple was selling like 20% of the phones, but making like 90% of the profits. Did things change?

I believe that Ballmer believed it. Because MSFT in response to this new iPhone was...to let WinMobile, which was already starting to look long in the tooth before iPhone, sit and languish for a few more years. It wasn't until iOS had well and truly kicked their ass that MSFT decided to freshen up WinMo. By then it was too late.

Palm? Eh, maybe Coligan believed it. Then again, Palm was well aware of the Newton because, well, Palm kicked Newton's ass. But Palm knew that Apple could make a mobile device (even if it were pricey). Could adding phone radios and a dialer be that much of a barrier to entry? I mean, Palm obviously figured out how to do it.

That was where the big price cut in the iPhone 3G (at $199, down from $399) came from?

Apple could release a car that has fewer features than a Tesla or Mercedes, and if it was designed very well, with seamless integration with the iPhone, lots of people would buy it.

I'm not a car person so I mostly can't tell the difference in power, nor do I need it, from other cars. I didn't care about reliability since it was a lease. But I did care that I had to use yet another shitty car-company interface, so having CarPlay support was a huge plus.

The car companies brought this on themselves by designing such bad software for their in-dash systems.

Bet you could if you tried. ;)

I really like my car. It's comfortable, I like driving it.

I really really really really hate the fucking sync software. It's just awful. Full of the stupidest bugs. I don't even have the full nav version, I have the smaller radio system. If I could find a decent replacement console that let me keep my climate controls (physical HVAC controls are a must. no touchscreen BS) I'd upgrade to carplay.

I drove a Tesla and it was like a dream.

If you lived close, I'd take you for a ride in our 4000lb. VW camper van that cranks out a massive 68 horsepower. You'll notice the difference on the first hill we encounter. :-) (I take your point, though; I've a similar attitude: if I want to go fast, I'll get on the motorcycle and do it right, otherwise I don't care much.)

But I did care that I had to use yet another shitty car-company interface, so having CarPlay support was a huge plus.

Between rental cars and our Nissan Leaf with it's fucking abysmal in-dash UI, I've decided that any car we buy from here on out will have CarPlay or no deal. I'm just not going to put up with crappy car UIs anymore. Plopping a CarPlay-compatible dash unit in our old Scion xB was a revelation. Nothing earth-shattering in CarPlay, but it's familiar and non-annoying. I was driving my Mom's new '16 Corvette, and having not memorized central Florida roads, I found the UI to be annoying as usual. In fact, I can't remember if I ever found the navigation function. What I do remember is tripping across the CarPlay icon on the dash and thinking, "thank $DEITY!"

I drove a Tesla and it was like a dream.

If they just offered one model that has everything and you pick the color, pay a monthly fee and they'd take care of the maintenance, insurance and whatnot.

The reason a lot of people have bad experiences is that they're trying to buy something that they can't really afford, they need financing, and have a trade-in they want to be worth more than it is and the whole transaction becomes this complicated shell game.

You just described less than 1% of car transactions.

Sure you can and do have no haggle dealers who could offer take it or leave it finance options and trade ins. But I wonder how many mainstream car buying customers would consider that an improvement when told "that's what the car costs. Sorry if it doesn't fit your budget."

ADDED: I'm sure the experience of buying a Tesla is nice. But it's nice in the context of people who are not going in with no dollars to put down who want to find a way to get themselves into a Tesla.

Of course I should probably just lease a car but that is not very common where I live and thus prohibitively expensive. But I'd like to see it become more common as right now the risks and costs are quite hard to calculate.

I've never bought from them. Last few cars I've bought from private sellers and I will never go back to a dealer of any kind again.

Their prices are generally a bit higher than an equivalent car somewhere else; that's the price you're paying for not having to concern yourself with haggling.

Think about the smart watch market. Many other companies are iterating their products in public. Apple couldn't really surprise the customers with their product. Maybe they build a better product than others, but it was no iPad (which took the whole market by surprise).

That's what people thought about the Apple Watch as well, but it seems these days Apple is content with releasing products that simply complement their portfolio rather than create new markets

Apple hasn't manufactured anything larger than can be easily Fedex'd. It seems like calling the Tesla an iPhone on wheels misses nearly all of the significant details.

Musk has made the point that a lot of that stuff can be purchased from or outsourced to third parties. Which is what the traditional car companies now do. Which is what Tesla does.

The traditional manufacturers maintained their expertise in engines, but, ironically, that's one thing that Tesla had absolutely no use for anyway.

That being said, I do share your skepticism.