Re:Apple cancels work on electric car, shifts team to genera...
by gumby on Tuesday February 27, 2024 @03:40PM
(#39529576)
I agree with your entire comment but have some nuance about one point:
> It’s one thing to create a new [lower-margin business], it’s another to purposefully take it on as a business line when your existing business groups prints money and have 40%+ margins.
While I agree that this plan didn't fit with any of Apple's strengths, as a general principle good companies plan for margin erosion. In fact failure to do this is a classic failure described in The Innovator's Dilemma, where you're leaving room for a disruptor to grow. Or as Sun used to put it: "if someone's going to show up and eat our lunch, it should be us who does that"
> It’s one thing to create a new [lower-margin business], it’s another to purposefully take it on as a business line when your existing business groups prints money and have 40%+ margins.
While I agree that this plan didn't fit with any of Apple's strengths, as a general principle good companies plan for margin erosion. In fact failure to do this is a classic failure described in The Innovator's Dilemma, where you're leaving room for a disruptor to grow. Or as Sun used to put it: "if someone's going to show up and eat our lunch, it should be us who does that"
But a car...SMH