Also: insane supply-chain management chops, a skill that is more and more transferable - especially for electric cars.
For instance, logistically things are very different in the automotive space. Many, many more people are required to ship a single unit. You also have many more variables that can hold up a production line anywhere in the hierarchy because you rely on more 3rd parties for parts. While these things are also true of consumer electronics, you may rely on a dozen suppliers for an iPhone, car companies often rely on hundreds.
Materials are also very different in the automotive space. You have to build with materials that will last 100k miles driving a 80mph in all weather, day/night, freezing/scorching etc etc. It is a very long tail to cover. Apple can do it, but it will take years and many, many partners to get it done.
Google and Nest on the other hand...
Apple has negliglible experience dealing with the raft of certifications and demonstrations of compliance that car manufacturers have to go through.
If their staff can’t figure it out, they have plenty of cash to hire the people or organizations that do.
> The ECG app is intended for over-the-counter (OTC)use. The ECG data displayed by the ECG app is intended for informational use only. The user is not intended to interpret or take clinical action based on the device output without consultation of a qualified healthcare professional. The ECG waveform is meant to supplement rhythm classification for the purposes of discriminating AFib from normal sinus rhythm and not intended to replace traditional methods of diagnosis or treatment.
https://www.accessdata.fda.gov/cdrh_docs/pdf18/DEN180044.pdf
If you follow the submission you'll also see they were granted approval to market as a de-novo filing as a class II device, so it's not as much work as a PMA but the regulatory work is not peanuts. Since then they have self-predicated for a 510(k) on a newer version.
Even for a smallish software only project like this, it means they had to set up all the basic infrastructure and have it audited. They also wrote a ton of formal engineering process documentation, a full design history file, etc. These skills at least are pretty transferable.
That's like saying English is a transferable skill. Domain knowledge is what counts here. It's the same reason medical device makers don't try their luck in the automotive market and vice-versa.
You'd have to hire a bunch of people with domain knowledge, but you are better off than starting from scratch.
If I am hiring engineers for aerospace, I'd rather bring someone in from medical devices than no regulatory experience, all else equal. Same in the other direction. Principle extends reasonably.
I guess there are lots of reasons I'd think it would be a big jump for apple, but "they won't get their head around the regulatory requirements" isn't really one of them.
There are many many engineering and manufacturing companies who specialize in being suppliers for regulated industries. Like machine shops that specialize in aerospace, medical and automotive parts. Electronics manufacturers that do the same. At that level its more about process control and running a smooth operation and not the specifics of the application.
“We’ve learned and struggled for a few years here figuring out how to make a decent phone,” he said. “PC guys are not going to just figure this out. They’re not going to just walk in.”
(Palm CEO Ed Colligan, regarding Apple’s prospects in the mobile phone market)
Motorola had no clue about Apple making a phone, and Apple wasn't getting phone-making knowledge from them.
If you mean about before, their single phone collaboration with Motorola was just a 100% Motorola phone design running an Apple-provided music player part.
Motorola didn't collaborate with Apple on the design of that phone or anything, Apple didn't get any IP or copied any elements, and nor was the iPhone anything like it.
For reference, a single car has about 30,000 parts, built by dozens of suppliers.
- Pack has to go through an order of magnitude more charge cycles than a phone
- Must operate in a much wider variety of conditions than a phone
- iPhones don't need to drive themselves
- iPhones don't need to pass crash tests
- Brakes don't exist on iPhones
- Suspension does not exist on iPhones
- iPhones don't propel themselves at 100 mph
- iPhones weight orders of magnitude less than a car
- Regulatory requirements are way less stringent for phones
- Lights
- ...
I'm sort of dumbfounded by the level of conversation here given this is HN and the reputation is one of very thoughtful discourse on current events relating to technology and engineering.
EDIT: line breaks, looks like I'm further contributing to the downward spiral here.
I don't think this is true. Most electric cars are re-charged once a day, which is about the same as a phone.
> Must operate in a much wider variety of conditions than a phone
Also, not really true if you look at the range of temperature and conditions an iPhone is rated for. (Including water resistance. Mine went through a washing machine cycle and came out fine.)
> iPhones don't need to pass crash tests
iPhones protected highly delicate components against hard impact on concrete. That requires similar engineering delicacy as protecting human meat in car crashes.
> Brakes... suspension
The complexity of the accelerometers and camera systems deal with similar engineering challenges of the same quality.
> iPhones weight orders of magnitude less than a car
Does weighing less make something harder to engineer? If anything making complex machines that are feather-weight seems more challenging. Certainly you'd acknowledge that smartphones are harder to build than mainframes, even though the latter is an order of magnitude heavier.
> Regulatory requirements are way less stringent for phones
This is true. But given Apple's unrelenting engineering excellence, there's very little chance they'll design a substandard or unsafe product. Therefore regulatory compliance is merely an issue of hiring enough lawyers. Apple has plenty of cash to hire lawyers. Certainly much more than GM.
> Lights
iPhones definitely have lights.
And yet, that massive gulf is the whole point here.
Apple is treading in 95% unfamiliar waters, but the company has proven time and again this is its secret power. They'd never made portable music players before; they'd never made phones before; they'd never made watches before. A car is simply the ultimate expression of this, bringing to bear all of Apple's experience in entering a market where they have no experience.
I am sorry, are you trolling?
Are you seriously comparing smash test on a phone with regulatory crash test on a car? Have you thought about this at all? Do iPhones have crumple zones designed in? Do they asses performance of the chassis after 30 years of corrosion? Do they operate in 50 degree Dubai or -30 Siberia? Do they travel at 100 m/h? How many Gs does an SSD (~100) survive as opposed to a human brain (~10)?
I am sorry for namecalling, but this post comes across as very arrogant.
I'm sorry, but do you honestly believe that automobiles are more complex from an engineering standpoint than microelectronics? How could you possibly explain why the microchip was invented 100 years after the automobile?
Every domain has its own engineering challenges. Apples has consistently shown execution excellence across a wide range of disparate areas though. And more importantly an ability to quickly and effectively spin up expertise in new areas. From silicon to machine learning to acoustics to compilers to optics. Read this HBS case study[1] to be amazed at its ability to leverage cross-functional expertise across disparate domains. No large org in the world operates like it. There's a reason AAPL has a 50 times the market cap as GM. There's zero doubt in my mind that if Apple pursues autos, within a decade they'll acquire 5%+ global marketshare.
[1]https://hbr.org/2020/11/how-apple-is-organized-for-innovatio...
Thats done by TSMC, but you are right, I have much higher confidence in them producing a car than I do in Apple.
> do you honestly believe that automobiles are more complex from an engineering standpoint than microelectronics?
By two orders of magnitudes, at least! Modern car encompasses microelectronics, safety critical software and hardware design, passenger safety, repairability, corrosion, and thousands of other issues phones and laptops never face. You can't just push an OTA and fix a flawed engine. You can't tell you users 'they are holding it wrong'
> How could you possibly explain why the microchip was invented 100 years after the automobile?
How do you explain that Segway was invented after the microchip?
Yes, car makers have to worry about hardening against nation states. Probably don't do it as well yet however.
However I agree that Apple could go into that direction.
Seriously, you putting a bullet point with no explanation, and got an equally terse rebuttal. You didn't "win" that.
A phone light is just a little LED you could buy for a dollar and put on your keychain.
Yes they are. You don't get to point to random fancy things and call them "requirements".
> A phone light is just a little LED you could buy for a dollar and put on your keychain.
You're taking "phones have lights" too seriously. It was a deliberately vague and useless rebuttal to a deliberately vague and useless point. The real answer is what I already said. Replicating the functionality of a bulb/socket/housing is not hard to such an extent that the only reason to bring up lights is for jokes. So the joke got a joke back.
>I don't think this is true. Most electric cars are re-charged once a day, which is about the same as a phone.
A car has a much longer service life than a phone, at least 3-4x longer. The battery pack, being the most expensive components of the EV, pretty much has to last the life of the car.
Wat.
Phone safety compared to car safety is like comparing bottle rocket to Saturn V. If bottle rocket/phone goes south, you generally don't expect loss of life.
Fuck, Tesla can't seem to wrap their head around this. They used standard phone like quality components in car. Which caused stuff to stop working in regular car conditions e.g. noon left in car.
> iPhones definitely have lights.
This has about as much relevance as nothern lights do.
I get you have a lot of knowledge on the matter.. but you're biased and quite emotional it seems.
You're shifting topic a bit.
You were talking about part count, not part complexity. My iPhone battery doesn't have a cooling system and my car doesn't need to fit in my pocket (<= absurd arguments for the sake or arguing outside of the original question)
How many doors are there on an iPhone? Door latches? Door locks? Door handles? Door close sensors? Weather stripping to keep the rain out from inside the cabin? The little sticker inside the door listing the OEM specs of tire pressure?
How many wheels are there on an iPhone? How many tires? Wheel lugs? TPMS sensors? TPMS readers? Hubs? Brake rotors? Brake calipers? Brake pads?
And on, and on, and on...
For a company like Apple, making a car is child's play.
I drive a 2017 Santa Fe. Its a pretty basic car tech-wise compared to many others on the market these days. There's still the computerized ABS and traction control system taking samples thousands of times a second and making split second decisions on how to handle the car. There are radar sensors tracking the distance to vehicles around me, that data is being fed to computer systems for automatic cruise control and alert aids. The car features lane keeping features which is based off computer vision systems to track the lines on the road. The transmission system is computerized, being more like a computer controlled manual transmission rather than a traditional automatic. The infotainment system is obviously driven by some kind of computer and contains WiFi, LTE, Bluetooth, GNSS, satellite, AM, FM, and digital FM radio systems along with cameras and radar sensors.
I'm sure I'm forgetting some additional computerized systems on this list. So honestly there are several iPhones worth of computer systems on this list, all with more extreme hardening requirements to expect a longer deployed lifetime than an iPhone and all of which need to reliably talk to each other in some kind of fashion.
To compare the complexity of a car and a phone (any modern phone - they're all fundamentally similar inside) belies immense ignorance of both.
Phones are functionally complex, but physically quite simple. The complexity is dealt with by the chip fab and software. Electronic manufacturing processes are basically the same for every device, and so are very well understood and optimised.
A phone is a model of system abstraction. The incredible complexity of the processor and digital logic is abstracted into little black boxes which are then soldered to a PCB. The assembly is then a straightforward sandwich of all the bits.
I don't think anyone's arguing that phones are not complex, but that cars have an order of magnitude more bits to assemble, and that means manufacturing complexity that the existing manufacturers obtained through decades of iteration.
Tesla's a great example - they completely underestimated the complexity of manufacturing (building the machine to make the machine), spent billions of dollars on it and are still struggling with poor fit and finish.
Of course, any company can put the processes in place to build a modern car - it will just take time. To argue that a phone requires as many assembly processes as a car is simply ludicrous.
Nobody gives a damn about the infotainment or door knobs.. it's delegated to one supplier just like a phone charger or any secondary part.
The car mechanics, engine, battery and control units are what I was mostly thinking about.
If Musk keeps on going their EVs car body will be two cast parts, so in terms of supply chain management the complexity is gone into the manufacturing process.
Not only that but the regulatory standards of EV in US/EU/Asia varies so widely that I don't see how they can get a product to Market in less than 5-10 years unless they're just making EV clones of what is already out here or partner with a Manufacturer. And burned factories in India are not going to cut it on the logistics and supply chain so they'd need to work that out, too.
I can honestly see them partnering up with Nissan-Mitsubishi Motors who are in dire financial straits and want get out of their alliance with Renault-French Government after all the Ghosn corruption and are taking their entire lineup to EV and want to improve on the in-cabin AR side of things, all of which Apple could help build and have the finance to support it.
Having worked at Nissan I think its focus is on tech and still makes cars to prove and refine it's technology, they had an Aerospace division in Mountain View, and used the supposed 'auto pilot' features Tesla has on some of its Infiniti chassis (lidar based cruise control and lane staying signals) in the early 2000s.
I hope it happens, to be honest I dislike anything Apple makes and I despise their business practices for obvious reasons (Foxxcon) but I'm forced into their ecosystem as of now. I'd like to be open to their products if they it did happen.
So Apple, the world's most valuable company, isn't going to be able to make their own car? You're dreaming.
I've followed Tesla since the Roadster days, and I lost count how many times they've almost gone Bankrupt. The only one here that is clueless is you if you think it was without 'issue.' Hell, I worked for Kimbal who is on the Board at Tesla and he openly talks about how many times Tesla almost went under in the few interviews/podcasts he's been on. What echo chamber do you live in to think there was no issue?
> This is such a clueless comment.
I've been in Motorsports with close ties to manufactures since I was 17, and then went on to work for Volkswagen Audi Group (the largest manufacture of cars by scale) and then to BMW and then back to VW because of Diesel-gate, then Nissan in various capacities from technician to supply chain. Then I tried my hand at Tesla during Model 3 ramp up and saw FIRST HAND why/how the delay in ramp was occurring in 2017 with 2 trips to the Fremont Factory before deciding to decline and focus on SpaceX instead.
What experience do you have in that Industry to call it clueless?
I know Apple cultists are as rabid as Elon worshipers, but the two combined are completely toxic.
> I doubt anyone here would say Apple couldn't make their own car, but the idea of Apple mass manufacturing a brand new car in four years is a bit crazy. In your example, Tesla took nearly a decade of focus and half a billion in capital to begin small production of the Model S.
In 3 years? A prototype to build hype and take pre-orders that still needs all the regulatory compliance to be on the road ahead of it, sure; a refined 49-1 street legal product that's mass produced with scaled production line, distribution channels and supply chain to accommodate domestic, let alone international, deliveries: HELL NO!
Money alone won't buy you that, especially if COVID is still shutting/delaying down so many factories, International supply lines and look at the distribution system Tesla had to INVENT because it refused to play by the dealership system.
You FAANG guys live in an unrealistic bubble and think because it works for mobile/computers, and I laugh when I say 'works' because look at India, it should work for several ton vehicles with way more complexity and red tape than you can possibly imagine.
You're comparing vastly different Industries that have little to nothing in common.
Nissan just announced that it will be making its EVs in Japan [0] instead of Sunderland, so unless Apple decides to detract from its business model built on slave labour in Asia, chances are it will not happen.
0: https://finance.yahoo.com/news/nissan-picks-japan-over-sunde...
>The number of parts/unit differs by an order of magnitude
>car companies often rely on hundreds of suppliers
See above. You must be thinking of ICE cars.
>aren’t as transferable as you may think
Other than pulling a few things off the shelf like tires, windshields, and wheels (and more; those are just a few examples) the manufacturer of my car stated from scratch. Prodigiously hard for sure but Apple is good at hard.
>will last 100k miles
Try one million.
>will take years
Again Apple excels at this.
The real problem for Apple is having Tesla as a competitor. They are used to competing with Google, but it’s easy to compete with lame. Tesla is not lame, by a long stretch.
Guess what? I drive a white model 3 long range AWD and I love it. I'm still 1: an engineer with 10 years of hardware experience and 2: skeptical of every ounce of BS Elon Musk has ever spread.
You know how many parts are under the car? Have you taken one apart? They're complicated machines with, again, orders of magnitude more parts than a phone. Forget ICE vehicles, we're just talking about EVs and iPhones. You don't think Tesla relies on thousands of suppliers? Who do you think makes the screens, wiring hardness, cameras, brakes, glass, acoustic devices, steering, battery temp management, motorized seats, etc etc. And who do you think supplies their parts? And theirs? And so on and so forth. Its a complicated web of suppliers and manufacturers, much more so than what goes into a single iPhone (which is still very complicated). This is why a Tesla costs 35k+ and an iPhone costs ~1k. There are more parts that are more complicated and manufacturing them takes more time, effort, and people. Elon may have a magic car printer in his wet dreams but that won't happen in reality for four, five, or six decades.
Also, nobody, I repeat, absolutely nobody is holding their breath for you to hit 1m miles in your Tesla. Currently they don't even have a story for repair and so many parts are fused that if something breaks you can't replace it. The car is totaled. I recommend you watch all of the early Rich Rebuilds on YouTube if you really want to understand some of the nitty gritty details of these vehicles. Yes they are simpler than a normal ICE. By an order of magnitude? Certainly not. Progress is made at the margins, in increments of 1% then 5% then 10% then 15%. Not 1000% in one swoop.
EDIT: clarification
Comparing the Model S to the Model 3, and now the Model Y, we see with each generation simpler designs, reduced part counts, and easier assembly which all translates into improved reliability and, often, repairability.
Sandy Munro’s Tesla tear downs are a great reference for this stuff.
There has been some improvement over ICEs though, at least in the precision-machined parts and assemblies department.
But a smartphone is analogous to the infotainment display in a modern car. There's still a lot of car attached to that. I think many people commenting on this don't have the slightest clue what the average automobile is composed of beyond the engine, interior, exterior, and wheels.
0) Blue P3D AWD + Blue 3 AWD 1) 30 2) Right there with you, but that is a red herring.
It would have been sufficient to clarify that you held the opinion even about electric cars, without the histronics and name calling. You may be right, because cars certainly are complex.
Cars use many more off the shelf parts, they have far easier supply chains to tap into.
Designing and building the CPU, GPU, camera systems, neural chip/software, touchscreen, FaceID, etc. All of these components require way more competence to build than any single part of an electric car using an off the shelf computer.
Cars have more parts, but they are dramatically bigger, less intensely complex, less intensely integrated. Just the CPU alone of a phone puts an entire electric engine to shame in terms of difficulty of engineering.
So it’s an interesting comparison. But I’d put money on Apple making a great car before Tesla made a great computer.
Tesla has shipped their custom SoC in every new car since April 2019.
In particular, you assert that:
1 - phone is more complex than a car
2 - if phones is more complex than a car, then the organisation that produced it can produce a car.
You have provided nothing to back them up. I am in particular disagreeing with the second one.
Making the leap from "Apple makes many complex hardware parts" to they can make a car is a smaller leap than the opposite - Tesla literally didn't exist and made a car, so to assert Apple somehow couldn't is... weird.
Things Apple builds already that are in cars: custom glass, speakers, lights, complex aluminum frames, computers, cameras, knobs/dials, batteries, screens, wheels, fans, materials from leather to rubber to plastic, memory foam...
Your electric car has doors. The doors have hinges, latches, interior handles, exterior handles, locks, lock switches, power window motors, power window switches, power mirror motors, power mirror switches, etc. Those are all moving parts. Those are all just in the doors.
I'm also not sure what Apple's edge here is. At this point all I really want out of an entertainment center is a screen for my phone to plug into. Everything else is better done as knobs and buttons.
I'm sure Nokia had the same confidence in 2005.
> “We’ve learned and struggled for a few years here figuring out how to make a decent phone,” he said. “PC guys are not going to just figure this out. They’re not going to just walk in.”
Would a car be like that now? Batteries are close to too expensive, but 38k model 3 says we are close...
Not that much about the iPod changed between 2001 and 2005. A simple to use interface, large storage made it great from the start, but windows support it what made it successful.
It tool them 4 generations to get there, and a lot of money.
I don't think that's true. For example, less than a year after its release, the iPhone accounted for 28% of smartphones sold in the U.S. (and presumably for a greater percentage of smartphone-sale revenue): see https://arstechnica.com/gadgets/2008/02/iphone-owns-28-perce....
And half a year after that, the news was better still: https://arstechnica.com/gadgets/2008/10/apple-officially-sur...
So... by & large nobody had an iPhone or smartphone. They all had Razrs (or other feature-phones) instead.
That's a difficult statement to support. It set the stage for everything that came after, and it knocked the industry back on its heels. I'm not sure of the margin or unit numbers but for lots of values of "commercial success", that alone is hard to ignore.
To me, car electronics should be like a Kindle is for reading. There is a period after you launch the Kindle but before you start reading where you interact with it like a smartphone or tablet. But then once you get started, the notion that you're interacting with a digital device just disappears.
I want my car experience just like that - set up Spotify, Google Maps etc. before I go, then hands off any touchscreen until I stop. And I only use the audio driving instructions from Maps.
Come to think of it, the same applies to running - set up music, tracking app etc. on your front porch, don't touch the screen again until you're finished, that's a sign of a good run.
Culture is hard, but the core of your business. To not embrace the culture your org needs to outcompete competitors is to embrace failure.
With tesla the over all build quality for price range isn't great (they are getting better), but the software integration and UX is really good.
Apple is really good at both those things, if it translates to cars that could be compelling.
It's about as hacky an afterthought as you can possibly get, though? It's a giant tablet on a stand. Effective, yes, but also definitely a hacky afterthought, too. There's no attempt of any kind to integrate it into the lines or flow of the rest of the vehicle. And they still can't be bothered to put some basic physical switchgear in the thing. There's nothing tactile about it, nothing that feels premium or well-designed.
Anyways, Tesla computer interface is so much nicer to work with than the system on my 2014 Honda Odyssey: the software there has all sorts of arbitrary limitations that makes things like “playing” music irritating. Plus, traditional car manufacturers do crazy things like treating the “navigation package” as a premium feature or whatever. Not to mention that the Tesla gets OTA updates regularly while I’m mostly stuck with whatever bugs or limitations my Honda had when it was built (unless I take it to a dealership and ask for the firmware to be updated.)
The issue affected nearly every iPhone owner I knew at the time, including a number of individuals who worked for Apple, and almost all of these people got their phones replaced by Apple under warranty as a result.
But a car is hardly just a large phone.
Apple has been doing CarPlay for years. If they do at least as well with the rest of the interior they’ll have an edge over most luxury cars today.
https://www.theverge.com/2019/10/9/20906777/volvo-xc40-suv-e...
And ultimately buttons and entertainment centers only move the needle for relatively comparable cars. Apple would first have to get as good at Toyota et al at building the rest of the car before a better UX can win.
I imagine more practically minded luxury car buyers would jump at an Apple car that met Tesla on the performance front and exceeded them on the ease of ownership.
Apple is quite good at knobs and buttons, and what may eventually become interior finishes.
Good: iPod click wheel, iPhone side buttons/switches, old chiclet keyboards, trackpad.
Bad: Butterfly keyboards, AppleTV remote is awful (swipes and edge-clicks for all sorts of things), their mice have always been a pain to use (wanna right click? Better lift your left finger completely away from the mouse)
But they also aggressively remove physical interfaces where possible. One-button mice, removal of home button on iPhone, removal of function keys on MacBooks, etc.
I hope they don't do that with a car. There should be a dozen knobs and buttons that have dedicated features. Not just wipers and signals either. I'm talking about volume control, seat adjustments, windows, etc.
I just hope they agree that eyes-on-road interactions will require more of that, and less of the touchscreen-only stuff. They probably will. One way to look at it is how much they care about accessibility on iOS. If they put that much effort into those features there, then nailing those details in a car will be natural.
Apple does have smart people, and they obviously have a ton of cash. So they absolutely could make a play here. But to imagine that they'll walk in to a market that Tesla has been growing successfully in for a decade and be competitive out of the gate seems like a stretch.
They shipped like half a million cars this year! They own like 70-80% of every EV market they compete in. This is the kind of criticism you'd read about Tesla in 2014. The companies that "have been building cars for decades" are getting stomped by Tesla in this space, 12x more Model 3's were sold than LEAF's in the US last year.
At some point the established wisdom among some people that Tesla is failing is going to change, right? The ship has sailed on that, left the harbor, and is half way across the ocean by now.
And the weirdest thing here is that it's not an attempt to attack Tesla from the perspective of established auto makers but from Apple Computer, a company with no experience at all in the market and almost nothing to bring to the table but "brand status" (and a freighter full of cash, of course).
Tesla is profitable, but every single one of its quarterly profits is still the result of selling credits to other automakers, not from the sale of its cars. In that regard, Tesla joins such luminous counterparts as Fiat (1.4 million profit on accounting charge) and Hyundai ($140 million quarterly loss) as the only "major" automaker which doesn't make money selling vehicles.
And 7% is like half a year of profits growth in this cases for a company that is still growing rapidly and finding efficiencies.
It's spin, again. And I genuinely don't understand why so much of it continues to be deployed against this company when it keeps proving it wrong.
Profits are not fungible. Companies can, and do, determine profit and loss separately for each line of business, because it matters both for financial reporting purposes and for tax purposes. Even Tesla acknowledges that it is not profitably making and selling cars under GAAP (i.e., under industry-standard accounting); their unit margin deliberately excludes items that would normally be ratably allocated to each unit. Hell, Tesla even fired most of its marketing department and cut its marketing budget so that it could goose the financial metrics it needed to make the S&P.
In that sense, it worked. Tesla is on the S&P. The downside to being on the S&P though is greater scrutiny and more price friction. Tesla can no longer count on retail investors to goose stock prices with marketing stunts.
Otherwise, it's just a matter of prestige: the S&P lists are just the X largest (by stock value) profitable publicly traded companies.
The difference between S&P X00 and Nasdaq: S&P is just a list of publicly traded companies; it is not a stock exchange. Nasdaq is an actual stock exchange, like the NYSE.
So we're going into uni-body territory but with a faster, simpler process than milling/printing. If Apple is happy buying thousands of milling machines for laptops and phones, a chassis injection mould might be the process they'd need to break into the car space.
iCar
Space gray, chamfered edges, 115 hp, 4 wheels
$100,000
What does that matter?
There are Car manufacturers that have basically had infinite capitalization and funding for a decade and the legal system + technology barriers just didn't move. Supply chain was never an issue.
Apple's not going to see any different results, so I am puzzled by this optimism.
"Magna currently holds contracts to produce vehicles for BMW, Daimler, Jaguar Land Rover and Toyota."
That’s contactless payment. Entirely possible without any Apple anything.
A more cynical person might say that one of Apple’s strengths is marketing commoditised capabilities as something special.
The Apple Card is easily the best card I've ever had. Its not just about touch-less payments (which doesn't actually require the Apple Card), it's the way you are notified, legibility of bills, convenience and immediacy of cash back, nicely integrated and payment options plus a bunch of other great features. Notably, Apple was the only card company which notified me in a conspicuous way that I had the option to skip payments during COVID.
Nothing is specifically amazing about the Apple Card, but collectively it's easily the best credit card I've had. The only time I use my other cards at all is when they have significantly better cash back programs. (Amazon card for example)
Your comment is close to the truth though. Apple's strength is in creating polished/ well integrated products. Often those products don't need bleeding edge tech, just someone integrating them better than existing players. The credit card is kind of a classic example. It's not fundamentally different, just a better experience all around.
Yes, I understand this, but if you are already part of the Apple ecosystem it's an excellent integration.
The world moved to chip&pin at least 5 years ago and moved to contactless for small money amounts (<AUD100 <GBP30) at least 3-4 years ago.
Apple & Google's changes for CC are mostly in the tokenization standard, building the backends for issuers.
The Apple Card is a US only need, because the US is stuck on chip&sign and Visa/MC have been unable to force the retailers to replace their ancient POS equipment. Plus big retailers don't like not having access to the full PAN of an account and tracking customers.
Cash back is pretty standard, if not below other rates (I'm not even sure what qualifies as 1 vs 2 vs 3%, seems random). The disputes aren't any easier or harder than I've seen through other apps for different banks.
The graph for expenses looks good, but I've had that with other accounts for years.
It's really not that different other than cash back being right there in the same app
Otherwise it has some nice features, comparable to some of my other cards but more tightly integrated with the phone.
When is the last time an electronic mfg had to deal with a billion dollar lawsuit because they didn't follow industry best practices for design like Toyota did after the acceleration scandal? Does Apple have experience with the NHTSB or other relevant regulatory agencies? Sure, there is a lot of gatekeeping in the auto industry, but it's for good reason. Cars can and do regularly kill people. It is not the same as making an iPhone.
They can make phones because they hire/hired experts who can make phones. I doubt they would use those same electrical engineers to design the brake systems. I don't think there's anything evidence to suggest that they couldn't acquire/hire the right talent.
I think you have an incredible misunderstanding of the the due diligence/research that these multi trillion dollar, publicly traded, companies go through to estimate costs/risks of their endeavors.
Looks like that due diligence wasn't diligent enough. But hey, what do I know? I must have an incredible misunderstanding. How could it be anything else?
Personally I don't buy the rumor because I think Apple is smart enough to avoid making their own cars. I think they already learned, by trial and error, that cars are tougher than they look.
Minor side note. I'm sure a lot of the experience is well-designed but I can't help but grimace every time I see that huge touch tablet instead of physical buttons on the dashboard.
Like with phones, having touch screen control everything provides extraordinary flexibility in rolling out new software features and ultimately improving UX.
Remember this design is supposed to lead the way into an FSD future achieved through purely software updates.
Whether they succeed in automating the majority of miles driven, they designed the car with that future fully in mind.
For what it’s worth, it’s one of my favorite parts of the car, and certainly it’s my kids favorite part of the car.
I don't want a UI with modes on the touchscreen. More of needing to concentrate on the cursed screen instead of driving.
Lastly, every touchscreen UI is fatally attracted to icons instead of words so I have to pull over and consult the 500 page manual to see what the wretched things mean. Icons have set back communication 5000 years [1], though I doubt Susan Kare will ever apologize :-)
[1] Picture based written languages all evolved towards phonetic, alphabet based ones. There's a good reason for that.
The only thing that I’ve ever felt was a little distracting is climate control, because you’re adjusting individual degrees with a fairly small touch target. However it’s also a totally non-time critical adjustment.
Defog/defrost is a 3-state toggle control so it’s easy to tap with minimal distraction. I find it’s strictly better than the physical toggle I had in my previous car, which I also had to look at to press because it was in a field of identical buttons, and which didn’t provide the same functionality with just two taps (going from cool defog to hot defog)
I think people dramatically overstate the idea that people are adjusting climate or radio channels without looking, unless it’s being done on the steering wheel. If you have to reach the dash, most people are going to look at it.
What’s great about the responsive touch screen is that there are activities which are massively faster to accomplish (like pinch-zooming GPS maps) which are significantly slower and more arduous on other cars I’ve driven with physical controls. There’s also a lot more functionality that can be provided. And providing remote control over the same functionality becomes a lot easier when there isn’t a physical switch that could get out of sync, or where your physical switches all have to be “soft-toggles” so they can’t physically get out of sync with the current digital state.
Honestly the HCI group at Tesla has really done some very impressive work overall. The design is quite beautiful and extremely functional.
BTW, "defrost" is a verb, and pictures are for things, not verbs. So I never know which stupid icon means "defrost". Lack of verbs is why picture written languages evolve into phonetic alphabets. I predict in 20 years Apple will announce a great breakthrough in user interfaces - words!
rant, grumble, rant, grumble, harrumph
BTW, I have no idea what a defog control does that defrost doesn't.
While there are things on my car I use instinctively without looking—wipers/ lights come to mind—there are plenty of other pieces which are frustratingly difficult to find in the dark. Turning on the window defroster when the window starts to fog up at night comes to mind. Likewise many of the climate control nobs. While they do have nice physical manifestations, I don't know off the top of my head what position the nob happens to be in or which direction I need to shift it to get it into defrost versus heat versus vent.
Personally, I think there is a happy medium somewhere between Tesla's touch everything and the current state where you play button guessing games.
Behold my 1989 Bronco II:
----------[++]-----------------------------------
MAX A/C PANEL PNL/FLR FLOOR FLR/DEF DEFROST
-----------------[++]----------------------------
COOL WARM
OFF * * * HI
PUSH FOR A/C
Turning on the headlights lights the display.
No manual is needed to fully operate it. I never even had the manual for that car. The knob and sliders are trivial, tactile, and visual. There are no modes.
It's near perfection in user interface design.
Driving, on the other hand, is demanding on the senses; on at least three of them. Touch screens pull eyes off the road. Physical knobs are much easier to grab without looking.
In my car I have the luxury of both touch and knobs for some things. I always use knobs when I can. It feels safer. (But then, I also prefer crank windows instead of automatic, so maybe I'm just a nut.)
It's like my Macbook touchbar. It stinks. The physical keys were easy to use without looking. With touch, I almost always need to look steady at it before I touch. For me, muscle memory isn't enough for touchscreens. Weird.
In a car it's extra bad because now you have to look away from the road and position your hand in a bumpy car to adjust the temperature/radio/navigation. It's so awful in my friends cars I dread the day I have to buy a new one.
I prefer hardware to software and I’d hate to control my Jeeps with a touchscreen but my Jeeps aren’t driving themselves.
Mostly agree, though I suspect a few of the major car companies like Volkswagon/Audi and Toyota/Lexus are capable of this as well.
But yes, Apple has the cash reserves to not just manufacture electric cars, but to build out the necessary infrastructure network as well:
- charging stations blanketing the country
- battery replacement stations for faster "charging" on the fly
- local maintenance stations
- etc..
Apple could centralize sales to Apple's website, and transform "dealer networks" into "maintenance networks". Sales can be handled in a centralized manner, but maintenance still requires locality.
All that requires large upfront CapEx, but Apple is one of the few that has more than enough cash reserves for that.
That last part seems to be missing.
Likely because the smart money knows that retail investors + indices = momentum trading on sectors. As there's no ability for anyone to call BS in the way they used to be able to.
Or to put it another way: if I'm Toyota, I have a demonstrated ability to build cars profitably. If I'm someone who says I can build as many cars as Toyota, how many pitfalls are there between what I say I can do and actually doing it?
Admittedly, corporate conservatism and risk avoidance in leadership is absolutely a thing, but it feels like we're rewarding claims of execution over actual execution.
"the risk that Toyota, with demonstrated volume manufacturing prowess, is unable to pivot into a new class of vehicles"
is greater than
"the risk that a new manufacturer, with no track record of volume automotive manufacturing, can create a product and manufacture it in volume"?
That was my original contention and where I feel the market is mispricing risk.
How many theories and case studies are there documenting how a company failed to execute something it's never done before, and has no competency at?
I would also challenge the notion of "no competency at all". This isn't like a great chess player thinking they can use that skill to become a great football player. This is more like one of the best baseball players becoming a great football player [1]. Things are different but there exists a lot more similarities than you think. And if you are one of the greatest of all time (which is true for both Bo Jackson and Apple) there is a non-zero chance you can pull it off.
Granted! My personal guess is this turns out much like Google Fiber: a capital- and regulation-heavy endeavor that Apple (and their investors, used to tech margins) aren't culturally or financially willing to commit to for a long enough haul.
But an effort which eventually pays off by frightening existing players into cutting better partnership deals with Apple.
From a quick peek, Apple runs ~25% pre-tax margins. For reference, Ferrari has ~20%, as the highest in the industry. And ~10% or less seems standard.
So in the end, if Apple is more successful than Ferrari at selling vehicles profitably, they'll still be making less money than they're used to on the investment.
That doesn't seem like something investors are going to be willing to let Apple endlessly torch cash in pursuit of, competing against firms with decades of experience, when the alternative is returning it directly to them via dividends, buybacks, etc.
And that's not even getting into the optics of labor-relations with manufacturing that Apple would have to very publicly expose, vs their more hidden technology supply chain.
The more I think about this, the more it seems like the only viable "Apple car" is a limited-volume halo project, built on top of an existing manufacturer's platform -- which would mirror their approach to technology, in many ways.
A couple of things I would say to this, however:
1. Wired connection to home internet wasn't really in a period of disruption when Google entered the Fiber market. Google didn't really have an angle into the market. I think this was more typical Google arrogance driving this than strategic thinking. In this case, I would actually believe the purpose was to influence other players rather than capture meaningful market share with a unique product offering. It's quite an invisible product.
2. Apple doesn't run the business looking for revenue and margins. Apple looks for opportunities to build a substantially different product that fits Apple's values (privacy, safety, security, design, ease of use, etc). Everything about the car as a product experience, including its distribution is in massive transition right now. On a small level we see this with Tesla on the dealership vs direct to consumer model. On a larger scale we see this with ownership model altogether (ride hailing apps vs. the car in your driveway). The car is about to get rebuilt with microprocessors at the core, including machine learning, literally driving the whole experience.
Anyway, this is just a way of saying, we shouldn't take a financial snapshot of the car market today and try to fit Apple's model for success into it. The only reason they are getting into it is because everything about cars is going to change dramatically over the next 10 years.
E.g. (1) we don't have flying cars because they're not different enough from street cars to justify their cost, and (2) we do have incredible wireless cell phones because they're fundamentally different than landlines.
"Massive transition" etc. just doesn't ring true.
After transitioning, the car experience won't be fundamentally that different than the current car + ride share experience.
If anything, the future of automobiles seems more likely to lead to lower ownership rates, more commoditization, compressed margins, and a worse market to win.
Apple still has to answer to shareholders, and Tim Cook doesn't have Jobs-levels of trust to trade on.
People tend to overlook just how many service centers are available for the big three (about 10K), not even counting independent garages. Tesla has..500. How many will Apple have? If the Tesla service horror stories are anything to go by, I can only imagine what it would be like for an iCar once production ramps up.
All of these things are outside of Apple's core focus and they are unlikely to possess an advantage over other players. Sort of like automobiles.
The world is starting to feel like 1999 all over again. People's visions are getting further and further removed from reality.
The challenge is that the complexities of an EV are similar, but greater in scale than for consumer electronic devices - more parts, more complex supply chains, more extensive support network (charging stations, maintenance providers).
Whether Apple can scale up to handle those increased complexities, and whether they calculate it's financially worth it for them, I doubt anyone outside Apple can really know at this time.
Steve Jobs = Elon Musk in a different market.
Without someone in control who can make major decisions quickly, capital will not be enough for Apple.
No need to theorize at this point. Plenty have pointed out how overinflated Teslas value is at this point. It's pretty much cult of personality that is propping them up at this point. Tesla is actually very similar to Apple in that they "pioneered" a new market and that has created an identity of leadership in that market. I'm not sure Tesla is going to be able to keep up as the competition continues to grow rapidly.
From my experience, Tesla's tech (I drive a VW) is ahead of their competition pretty handily.
The new Ford Mustang Mach looks competitive, but even that is still at least 9 months away.
The VW id4 EV is sold out, and they are taking pre-orders for the next batch.
Tesla has first mover advantage when it comes to mass market EV's. It's not just cult of personality.
Did you mean second? There actually can be a lot of advantage to being the second mover. Nissan had already sold 100000 units of the Leaf between 2010-2014, while Tesla had sold up to that point only 16k cars. Clearly, Tesla wasn't the first mass-market EV. Indeed, it seems obvious in hindsight that Tesla's success owed mainly to ignoring the mass market and selling very expensive cars at first.
"The N95's main competitors during its lifetime were the LG Prada, Apple's iPhone, Sony Ericsson's W950i and K850. The N95 managed to outsell its rivals. Despite Apple's much-hyped iPhone with its multi-touch technology, thin design and advanced web capabilities, the N95 had several key features against the iPhone, such as its camera with flash, video camera, Bluetooth file sharing, 3G and 3.5G connectivity, GPS, third-party applications and several other features."
Apple saw what everyone else was doing and triangulated something differentiated on what they know Apple users want. They will do the same thing with this car. It is much better to be Apple than to be Tesla at this point if your goal is to ship 100k's of cars. Most of Apple's target market for a car is still driving german cars. Apple has learned everything it didn't already know from Tesla, and can now execute on what it does know best to win. Tesla is a Nokia N95 that has the stock price of an iPhone. Short TSLA, long AAPL.
- Most advanced Technology in a Car at this moment both battery-wise or SW. - People are starting cults around Tesla, specially geeks and nerds. Similar to Apple :) - Tesla means today EV.
Everybody identifies Tesla with the most advanced EV.
You are right, they were probably not the first ones, but the ones easily identifiable as the EV and Car Technology. This is what they have as advantage compared to other EVs.
Which you can consider Nissan to be as well.
Was it really? Dozens of companies have credit cards. Walmart, Uber, Paypal, Venmo, Best Buy, Amazon...it didn't real strike me as big things happening when Apple announced their credit card.
But usually the rewards are all anyone cares about, and the Apple Card is decidedly mediocre and pell mell here.
I guess more what I was getting at originally myself was Apple opening a credit card didn't strike me as big news of bigger things on the horizon. Given dozens of other companies do the exact same thing, some also doing the 2% back everywhere thing.
It just seemed like a pretty typical thing large companies do these days.
The customer service is also over the top.
The user experience of many Apple products is notably substandard. Maps, homepod, keyboard, list goes on. What Apple is good at is integration (both horizontal and vertical) and managing user perception through design.
Actually _making_ cars is doomed to be a failure. You need a massive workforce and very large factories. It is fairly low margin compared to even computer hardware let alone software. Then they have to support these cars which means you need a massive service network. It really is a bad bad idea.
Making a car with the likes of Magna is just plain stupid. You can’t get any sort of volume to make the car cheaper and get the OS into the hands of millions of drivers.
Here is what they should focus on:
1.) Sensor suite for self driving. 2.) AI computer for self driving. 3.) Main computer and screen(s) for navigation, car controls and games/audio/video apps. 4.) Autonomous software.
Work directly with automakers from the ground up and design the vehicles jointly with them to ensure the systems feel native rather than bolted on.
Also I think they and the market (investors) dont want/expect them to be a part of a supply chain.
Apple has had multiple credit cards in the past.
Edit: found this after more Googling: https://www.cultofmac.com/614988/apple-credit-card-histor/
With all due respect, I would like to articulate and counter your point with some insights.
Tesla as it stands today at ~$600B is priced at monopoly status - that they have 'won' the next decade in transportation and electrification. Whether you buy into that or not, consider the following:
- Tesla is the first (and so far only) company that has successfully been able to produce electric vehicles with positive gross margins at scale. No other competitors have scaled (yet) and EVs made from traditional automakers have been sold thus far at negative gross margins (i.e. each one that leaves the lot costs thousands or more dollars at a loss). While Tesla 'just broke out' as a stock in 2020, starting with large cash-flow generation from their factory in China - they have been working at this for well over 5 years. The real challenge for everyone making EVs is scale, and depending on how you slice it, Tesla is - really, really far ahead regarding their head start. (Model 3 was ANNOUNCED in 2016 and first cars were produced and delivered in 2017. Look at this announcement today end of 2020, and car production in 2024 - not even accounting for scale. This is really hard to do.)
- Your point about commoditized parts is valid in theory. However, as someone in the {renewables} industry who has had many first hand conversations with those buying Li-ion batteries at scale - the little talked about challenge for everyone else in automotive is 'where are you getting your batteries'? Li-ion cell manufacturers are generally broken up into Tier1, Tier2, Tier3 suppliers. From my conversations even pre-pandemic with folks - Tier 1 supplies were already allocated SEVERAL years out. Tier2 supplies are hard to acquire in large volumes as well. That leaves you with 'shitty' Tier3 supplies for which most of those cells are ending up in things like scooters and Energy Storage (not cars). And while some are good, suppliers can be tier 3 either due to small volumes or unreliability (must all be tested, and even still its questionable how many cycles you'll really get). Automakers want Tier 1. Tesla's latest event, 'Battery Day' while 'disappointing' the street and non-industry folks for not announcing some 'Million mile' or other 'groundbreaking technology' is significant because the limitation to Tesla's growth, much like others for making EVs, comes down to batteries. The factories need to be built - and for most of what optimists imagine for a rapidly changing future, many of those shovels have not hit the ground yet on the forward infrastructure. And that isn't even accounting for the fact that it takes at least 1-2 years to get a single cell factory ramped up. And we aren't even talking about the mining capacity (particularly lithium and nickel) that all of these announcements imply already exists.
And back to Tesla's valuation - there is lots of focus on their current valuations assuming they have solved self-driving. There's so much going on with Tesla as a stock (look at Tesla Semi-truck, their Energy Storage businesses for example). And the winks and nods towards launching an uber-like ridesharing service. While I am very skeptical of their ability to have self-driving 'done' in their posted timeframes, I think their value is priced that , whenever it happens - they will be first. So interpret that as you may.
When factoring in the likelihood that they will be the next apple for transportation across personal & commercial transportation for the next 1-2 decades, you can end up at 600B easily. If you are interested in seeing how, just on the driving component - Ark Invest has posted their models if you want to take a deeper read to see if you agree. [1]
And 2 cents on Apple's role & competitive advantages here: They, prior to Tesla were for a while one of the larger single consumers for Li-ion batteries (Macbook, Ipods, iPhones, etc) in electronics. Add in their expertise with battery management and longevity systems (but for systems of a smaller size) combined with their existing supplier relationships & software capabilities, if I had to bet on Apple or one of the existing automotive companies - I'd probably make my bet on Apple purely from a capabilities and competencies perspective.
[1] https://github.com/ARKInvest/ARK-Invest-Tesla-Valuation-Mode...
What numbers are we talking about here?
Tesla seems to be the most sold EV car to date, with more than 650k model 3s shipped so far. That's remarkable, but it's the same magnitude as the second on the list, Nissan Leaf, which has 500k shipped.
There's also more to electric than battery EVs. It was obvious from the start the transition to electric is real but that real scale will start out with hybrid electric for the first decade or two. Any manufacturer serious about scale would want to start in that end because in order to be good, models needs to be designed from the ground up. In comparison, Toyota has shifted 15M Priuses. That's scale.
Making cars isn't just a question of R&D, it's a question of being able to manufacture at scale and quality.
This is something that Telsa have really struggled with - as a result the reliability of Tesla cars isn't as good as it should be. Telsa need to really crack this - but it's not as easy as it seems - that's why certain car brands succeed in petrol era, and others didn't - the ability to make them well is what, in the end, separated companies.
Electric cars are fundamentally a lot simpler than try to drive the car forward with a series of controlled explosions - but the key usability challenges are:
- charging times - range
Progress is being made on both, but if somebody can really crack them, that's the game changer.
Electric vehicles aren't new, as a child my milk was delivered from an electric vehicle. https://en.wikipedia.org/wiki/Milk_float
I guess they are the company to 'try it' but really it's a monster bet.
It'd be interesting if they have an 'angle' that allows them to start small, possibly with a specific kind of public transport or closed-system solution for urban transport, with entities like Dubai (i.e. cash flush) buying in big.
Car = game console = phone = laptop
Just another platform to own, so that one might control and tax users there-on.
It doesn't make design/manufacture/distribute cars - a massively complex thing - any easier.
It's very hard to enter markets against big incumbents, there needs to be some kind of approach.
Apple can expect to lose a lot of money for a very long time unless they are doing something tangential.
Which, for what it's worth, is an illustration of how our intuitions about future likelihoods aren't very good. We tend to see as implausible things that are too different from how they are today, overlooking how much things can change in a few years.
My opinion doesn't mean anything, but I think in 2030, Elon Musk will be the richest person in the world by an order of magnitude and Tesla will have the largest market cap in the world
Disclaimer - long TSLA and drive a model 3
Building car companies from scratch is really, really hard.
At best, Tesla factories are currently comparable to the state of the art in terms of car factory automation.
https://twitter.com/elonmusk/status/984882630947753984
I have watched most all of Sandy's videos; they are orthogonal to assembly automation. The exceptionally impressive things Tesla have done in later revisions of the Model 3/Y (particularly the octovalve and the rear body castings) are related to advanced manufacturing methods which reduce part counts. Not factory automation.
Sandy is very good at styling himself as a premier industry expert—and he's quite likely one of the greatest automotive manufacturing experts on YouTube. But I don't think most serious automotive manufacturing experts are spending much time posting on YouTube...
Every other manufacturer will be licensing Tesla’s IP, IMHO.
They execute superbly, had a brilliant strategy of starting as a luxury vehicle to be the beachhead for getting an economy of scale, and were risk takers, but lets not pretend they invented the market. They didn't.
No doubt they have loads of superficial patents though, but Tesla has an open patent policy and a declaration that they won't sue, so that doesn't seem to matter much.
Apple can buy a company like Magna Int with pocket change. Recall that Magna made the "Sony" electric car, bumper to bumper (Sony put in some screens demonstrating a Sony-esque UI), because that's what Magna does -- they're the maker behind a lot of automobiles, either in part or whole. And Magna has loads of patents around the engineering of vehicles because they've been doing it for decades.
Elon is rapidly turning into a toxic personality for (a bit more than) half the country.
The people who think Elon and his jokes are as bad as JK Rowling are kidding themselves and likely have a few skeletons in their closets themselves.
The worst thing he has said recently was a super cryptic meme about people thinking they are better than everyone for having pronouns in their bio.
Ouch! That really hurt... /s
It is irrepearable and components are impossible to obtain because Apple has punitive contract with suppliers.
This week assebly line workers are burning down the factory in india because of wage theft.
What in the above gives you an impression that the car they build can be trusted with the life of your family?
This fetishising of Apple has to stop, making pretty laptops doesn't mean shit when lives are at stake
Would you be excited to drive a moving vehicle designed by same company that has class-action lawsuits against many of it’s mechanical innovations: butterfly keyboard, failing screen hinges, bending iPhones, etc
On second thought, maybe Apple doesn’t actually have great mechanical engineering innovation chops.
Apple is fundamentally now a company that can move immense amounts of capital into new industries with the underlying ethos of user experience. Apple Card was perhaps a dipping of the toes moment.
In theory, Tesla shouldn't be worth what it is because the tech behind it is increasingly getting commoditized (though they work hard to stay slightly ahead). But people love Tesla and it's the first choice EV because they've really thought through the UX of a semi-self driving car EV thoroughly.
Apple is just about the only company with a similar ethos and enough money and patience to be a viable competitor and have a competitive brand known for quality.