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Re:Hyundai to acquire Boston Dynamics by jayd16 on Wednesday December 09, 2020 @03:55PM (#25364777)
Its about the margin though isn't it? They cost a lot to buy but they also cost a lot to make. How much value can Apple and Microsoft extract from you over the lifetime of a single car.
Re:Hyundai to acquire Boston Dynamics by mywittyname on Wednesday December 09, 2020 @04:21PM (#25365236)
> How much value can Apple and Microsoft extract from you over the lifetime of a single car.

Probably less than Toyota has extracted from me in my lifetime already.

Cars are lower margin, but they are expensive in absolute dollars, and their purchase almost always involves leverage. A $35,000 car will typically earn the manufacture $3-7k in direct profits, the financing arm gets ~$1800, the dealership gets ~$600 (plus profits from extended warranties, service, etc). There's still a ton of money to be made in automobile manufacturing.

And that's for an average car (actually, below average, the median new car price is nearly $40k). Vehicles like Porsches or an F-150s have insanely high margins. Porsche has the highest margins in the industry (50% for the 911) by a comfortable amount and Ford reports the percentage of F-150s sold for over $50k in their annual reports, and have for years, because it's the most critical aspect of their bottom line.

Tech companies benefit from having really dispersed revenue streams: they make a few dollars off of billions of people while car companies make thousands of dollars off of a few million people.

Re:Hyundai to acquire Boston Dynamics by blackrock on Wednesday December 09, 2020 @05:20PM (#25366088)
Cars are a consumable product. They only last about 10 years. Before you get bored of it and buy a new one. Or before it breaks down so often, that you must buy a new car.

Software, like Microsoft Office, is also consumable, in the sense that your computer burns out, or Microsoft makes its operating system end-of-life after 5 years. This forces you to buy a new license.

So if Toyota makes $3,000 in profit per car. And you replace your car in 10 years, then this is $300/year. Or about $25/month in profits to Toyota.

If it’s $7,000, then the monthly profits goes up to $58/month for Toyota.

So it’s the equivalent to a Netflix or Cable TV subscription for Toyota. But with the entrenched benefit that being a car manufacturer is big business, and there aren’t that many players in it.

What Toyota did was to make perfect, their vehicles, that they have such a loyal following. That their customers go back to them for every new car, decade after decade.

And plus, they make more money from their luxury brand, Lexus, and from their trucks.