I'm not saying they're NOT developing a car. All I say is there is evidence for something huge related to cars. All the rest is wishful thinking.
However, to consider:
Do you have any idea, how many people you need to develop a full blown car?
There are people who's only job it is to design, say the handbrake handle, or ashtray.
A car is a very different animal than a relatively small electric system like a phone.
And some hires in mechanical engineering does not mean that
a) they are hired exactly for that, and
b) you do need mechanical system into which to integrate electric systems
And it doesn't stop there: You need a huge aftermarket, maintenance. And regarding electric vehicles the isn't even a standardized infrastructure for recharging. And again, that talking something different than miniUSB vs. Lightning, or whatever.
Furthermore, something where automotive clearly lags behind is a full-blown, secure, modular, NICE and interconnected electric system. That is much more than "CarPlay on Steroids". Just take battery management in connection with navigation and traffic situation.
I can just see much less risk and effort to develop, let's say a modular complete electric system, including options for entertainment, communication, navigation, self-driving, assistance systems etc.
I'm not saying they're NOT developing a car. All I say is there is evidence for something huge related to cars. All the rest is wishful thinking.
However, to consider:
Do you have any idea, how many people you need to develop a full blown car?
There are people who's only job it is to design, say the handbrake handle, or ashtray.
A car is a very different animal than a relatively small electric system like a phone.
And some hires in mechanical engineering does not mean that
a) they are hired exactly for that, and
b) you do need mechanical system into which to integrate electric systems
And it doesn't stop there: You need a huge aftermarket, maintenance. And regarding electric vehicles the isn't even a standardized infrastructure for recharging. And again, that talking something different than miniUSB vs. Lightning, or whatever.
Furthermore, something where automotive clearly lags behind is a full-blown, secure, modular, NICE and interconnected electric system. That is much more than "CarPlay on Steroids". Just take battery management in connection with navigation and traffic situation.
I can just see much less risk and effort to develop, let's say a modular complete electric system, including options for entertainment, communication, navigation, self-driving, assistance systems etc.
How many people does Tesla employee? And if Apple is developing a modular electric system what car is it going go in? We've seen zero evidence that established auto makers are ready to give up their dashboard or other electronics to Apple or Google. When has Apple ever been successful being a piece of technology in someone else's product? That's the biggest reason I think Apple is doing their own vehicle (though I think they will contract out actual manufacturing just like they do with all their other products).
How many people does Tesla employee? And if Apple is developing a modular electric system what car is it going go in? We've seen zero evidence that established auto makers are ready to give up their dashboard or other electronics to Apple or Google. When has Apple ever been successful being a piece of technology in someone else's product? That's the biggest reason I think Apple is doing their own vehicle (though I think they will contract out actual manufacturing just like they do with all their other products).
Tesla appears to employ 12.000 people (wikipedia). And that's for a niche car manufacturer that is not very profitable. Granted, they have an innovative Supply Chain and are collaborating with, e.g. Toyota. BMW, for comparison, employs north of 110.000 employees. For comparison, Apple has around 100.000 now.
Also, there has actually been evidence for potential collaboration of Apple with OEMs as well - we talked about BMW and Daimler, e.g. And there are clear signals from e.g. Zetsche demonstrating the willingness to change an dopen up their dashboard to others. Mind you, not tomorrow, as well whatever Apple is working on won't be announced on the 9th, I suppose.
Regarding being a piece of tech: Well, I could say the same what Ireland mentioned before: The "They ain''t done it before, so they won't this time around" is not a very good argument.
For me, the biggest reasons against Apple building a complete car are apart form the reasons I stated before:
- except for the MacPro, Apple likes to sell a lot of their products. If this applies to the car, then it is not enough to paint it gold, so they can say "yeah, we captured 30% of the Chinese car market". Price is important, and while it is quite simple to buy a phone or laptop on a loan, the situation changes slightly with cars. And even Apple has to put seats and lights and all the other "standard" stuff in there, which heavily limits their leverage on overall price.
- in 2015, the projected number of New Car sales is roughly 70 million worldwide, of which 11 in China, 10 in the US, 10 in Western Europe, and 1,5 in India and Brasil. The largest OEM have a 10 million share of this. Looming at China alone: There, the highest volume OEMs are 1.5 to 2.2 million a year, so speak about numbers...
- In 2014 the top OEM margins were 2.5% from Ford up to 9.7% from Audi. go figure how that compares to Apple's margins.
- the average age of household cars is currently around 10 years in the U.S., that means one buy every ten years!
- lack of global charging standards for electrical vehicles
In comparison, tier1 suppliers have record margins, mostly in China, with an EBIT margin of around 10% versus 7% and lower for NAFTA and Europe, so again pointing to high volume, low car margin markets. At the same time, the biggest opportunities seen in the automotive market is amongst others the change around "Technology (r)evolutionof the powertrain, driver assistance and connectivity " (src: Roland Berger; https://www.rolandberger.com/media/pdf/Roland_Berger_Global_Automotive_Supplier_Study_20141209.pdf). This market is booming.
So
- it is muss less risky, to focus on supplying systems on tier1 level, and eventually work your way upstream to more complex systems or eventually a car,
- much less overall investment in terms of support of vehicles, servicing, chargin whatever
- very limited margins compared to consumer electronics they make as opposed to higher margins on tier1 level in this area
- very long turn-around time for buying a new vehicle as opposed to permanently able to deliver to many OEMs broadening the customer base
It's all well and good that Apple are entering the car manufacturing game but let's be honest, most of us will never be able to afford an Apple vehicle.
My guess is that Apple will sell their cars for minimum $100,000 which is about $80,000 out of my price range.
Comments
I'm not saying they're NOT developing a car. All I say is there is evidence for something huge related to cars. All the rest is wishful thinking.
However, to consider:
Do you have any idea, how many people you need to develop a full blown car?
There are people who's only job it is to design, say the handbrake handle, or ashtray.
A car is a very different animal than a relatively small electric system like a phone.
And some hires in mechanical engineering does not mean that
a) they are hired exactly for that, and
b) you do need mechanical system into which to integrate electric systems
And it doesn't stop there: You need a huge aftermarket, maintenance. And regarding electric vehicles the isn't even a standardized infrastructure for recharging. And again, that talking something different than miniUSB vs. Lightning, or whatever.
Furthermore, something where automotive clearly lags behind is a full-blown, secure, modular, NICE and interconnected electric system. That is much more than "CarPlay on Steroids". Just take battery management in connection with navigation and traffic situation.
I can just see much less risk and effort to develop, let's say a modular complete electric system, including options for entertainment, communication, navigation, self-driving, assistance systems etc.
How many people does Tesla employee? And if Apple is developing a modular electric system what car is it going go in? We've seen zero evidence that established auto makers are ready to give up their dashboard or other electronics to Apple or Google. When has Apple ever been successful being a piece of technology in someone else's product? That's the biggest reason I think Apple is doing their own vehicle (though I think they will contract out actual manufacturing just like they do with all their other products).
How many people does Tesla employee? And if Apple is developing a modular electric system what car is it going go in? We've seen zero evidence that established auto makers are ready to give up their dashboard or other electronics to Apple or Google. When has Apple ever been successful being a piece of technology in someone else's product? That's the biggest reason I think Apple is doing their own vehicle (though I think they will contract out actual manufacturing just like they do with all their other products).
Tesla appears to employ 12.000 people (wikipedia). And that's for a niche car manufacturer that is not very profitable. Granted, they have an innovative Supply Chain and are collaborating with, e.g. Toyota. BMW, for comparison, employs north of 110.000 employees. For comparison, Apple has around 100.000 now.
Also, there has actually been evidence for potential collaboration of Apple with OEMs as well - we talked about BMW and Daimler, e.g. And there are clear signals from e.g. Zetsche demonstrating the willingness to change an dopen up their dashboard to others. Mind you, not tomorrow, as well whatever Apple is working on won't be announced on the 9th, I suppose.
Regarding being a piece of tech: Well, I could say the same what Ireland mentioned before: The "They ain''t done it before, so they won't this time around" is not a very good argument.
For me, the biggest reasons against Apple building a complete car are apart form the reasons I stated before:
- except for the MacPro, Apple likes to sell a lot of their products. If this applies to the car, then it is not enough to paint it gold, so they can say "yeah, we captured 30% of the Chinese car market". Price is important, and while it is quite simple to buy a phone or laptop on a loan, the situation changes slightly with cars. And even Apple has to put seats and lights and all the other "standard" stuff in there, which heavily limits their leverage on overall price.
- in 2015, the projected number of New Car sales is roughly 70 million worldwide, of which 11 in China, 10 in the US, 10 in Western Europe, and 1,5 in India and Brasil. The largest OEM have a 10 million share of this. Looming at China alone: There, the highest volume OEMs are 1.5 to 2.2 million a year, so speak about numbers...
- In 2014 the top OEM margins were 2.5% from Ford up to 9.7% from Audi. go figure how that compares to Apple's margins.
- the average age of household cars is currently around 10 years in the U.S., that means one buy every ten years!
- lack of global charging standards for electrical vehicles
In comparison, tier1 suppliers have record margins, mostly in China, with an EBIT margin of around 10% versus 7% and lower for NAFTA and Europe, so again pointing to high volume, low car margin markets. At the same time, the biggest opportunities seen in the automotive market is amongst others the change around "Technology (r)evolution of the powertrain, driver assistance and connectivity " (src: Roland Berger; https://www.rolandberger.com/media/pdf/Roland_Berger_Global_Automotive_Supplier_Study_20141209.pdf). This market is booming.
So
- it is muss less risky, to focus on supplying systems on tier1 level, and eventually work your way upstream to more complex systems or eventually a car,
- much less overall investment in terms of support of vehicles, servicing, chargin whatever
- very limited margins compared to consumer electronics they make as opposed to higher margins on tier1 level in this area
- very long turn-around time for buying a new vehicle as opposed to permanently able to deliver to many OEMs broadening the customer base
Most other data I got from statista, btw.
My guess is that Apple will sell their cars for minimum $100,000 which is about $80,000 out of my price range.