Not to minimize the challenge of manufacturing at scale, whether automotive or mobile electronics, but the thought occurred to me:
1. There are a lot of small custom car shops that can build an entire, street legal car, practically from the ground up, using small scale manufacturing techniques and purchase of key drive train and suspension components.
2. To my knowledge, there are no small custom mobile phone shops that can build an entire smart phone with anywhere near the same form factor or features.
The only way to get to # 2 is by sophisticated engineering and manufacturing at scale. Key components may be available by others, but putting it all together is a big deal.
The process to get to # 1 at scale seems way more straightforward. Again, not to minimize what it takes to build a car, but if a few guys in a shop can do it, certainly any large manufacturer with billions of dollars (and the will) can do it if what we are talking about are essentially large scale "screwdriver plants." Everything, from key drive train and suspension components to many other sub-assemblies (like batteries), and even to manufacturing robots capable of automotive assembly are available from many suppliers at scale. I don't see that buying an existing car company would make this happen any faster. Partnering with an existing car company could have some advantage, but many independent automotive contract manufacturers already exist (including whole car contractors like Magna Steyr). After all, Tesla did it without a car company partner (the Fremont facility could well have been an advantage, but not the same as a partnership), so I don't see why Apple with or without Foxconn couldn't do it too.
You just described the early days of Tesla. It is not theory or speculation.
Yeah, none of this is true. As I have stated several times, Apple wants to impose the same terms on the automobile industry that they are used to getting from the electronics industry. They refuse to acknowledge that the two spaces are entirely different. With the electronics industry you can survive on very low margins because the volume is huge. TSMC - for example - can get by on maybe $1-$5 per CPU that they make (just throwing it out there) because their chips are in like 2 billion smartphones, tablets, PCs etc. that are sold each year and the same facilities/equipment can be used for multiple clients (Apple, Qualcomm, AMD, MediaTek, Nvidia etc.) In automobiles the volume is much lower and the facilities and equipment can't be reused. While a parts facility can make parts for multiple manufacturers, a factory to assemble cars from those parts will usually only make cars for one company, and often even a single line of cars for one company (diesel pickups, gas SUVs and electric compacts aren't made at the same factory).
Another thing: these companies aren't going to line up to help Apple make cars that will compete with their own for nothing. In addition to not making very much money in return for the significant effort required in manufacturing Apple's cars, helping Apple enter the market will make their own plight worse, as it will be yet another big name competing for the very small pool of high end carbuyers. Even if they aren't going to be directly competing with Apple, any company that partners with Apple is going to want IP to help their own cars compete with Toyota, Ford and everybody else. Again, this is different from electronics where the only major Apple supplier that is still competing directly with Apple with their own products is Samsung. TSMC, Foxconn and the rest aren't.
Multiple car companies have stated that it isn't in their financial interests to be Apple's Foxconn equivalent. They aren't going to make anything worth mentioning in margins. They aren't getting a percentage of each car sold. They aren't going to be getting facilities to manufacture their own cars. They won't even get IP that they can use to make their own cars better. Yet Apple fans insist on regurgitating stuff like "partnering with companies who were hungry and succeeding against companies that too satiated to try something different" when in fact these companies aren't partnering with Apple because they would lose more money than they would gain and would probably wind up going out of business.
Foxconn isn't "hungrier" than these car companies. Instead, they are able to survive and thrive in a totally different industry where they can turn low margins into profits with high volumes and use their facilities to build products for multiple companies, and they don't need to make and sell their own line of phones, tablets and PCs as their primary revenue source for survival. And if that wasn't the case, Foxconn wouldn't do business with Apple either. It wouldn't be in their interests to.
So you have evidence that Apple wants to "impose the same terms on the automobile industry that they are used to getting from the electronics industry. They refuse to acknowledge that the two spaces are entirely different"? I'm not buying it.
Not to minimize the challenge of manufacturing at scale, whether automotive or mobile electronics, but the thought occurred to me:
1. There are a lot of small custom car shops that can build an entire, street legal car, practically from the ground up, using small scale manufacturing techniques and purchase of key drive train and suspension components.
2. To my knowledge, there are no small custom mobile phone shops that can build an entire smart phone with anywhere near the same form factor or features.
The only way to get to # 2 is by sophisticated engineering and manufacturing at scale. Key components may be available by others, but putting it all together is a big deal.
The process to get to # 1 at scale seems way more straightforward. Again, not to minimize what it takes to build a car, but if a few guys in a shop can do it, certainly any large manufacturer with billions of dollars (and the will) can do it if what we are talking about are essentially large scale "screwdriver plants." Everything, from key drive train and suspension components to many other sub-assemblies (like batteries), and even to manufacturing robots capable of automotive assembly are available from many suppliers at scale. I don't see that buying an existing car company would make this happen any faster. Partnering with an existing car company could have some advantage, but many independent automotive contract manufacturers already exist (including whole car contractors like Magna Steyr). After all, Tesla did it without a car company partner (the Fremont facility could well have been an advantage, but not the same as a partnership), so I don't see why Apple with or without Foxconn couldn't do it too.
You just described the early days of Tesla. It is not theory or speculation.
Yep, my Tesla example was put in there to show what can be done.
Thanks for the link to the video--it was quite interesting...
I knew that Lotus was involved with Tesla, but I didn't think it was as a "partner company" but more as a contract manufacturer. The video suggests Lotus was more of a partner (for a while at least).
Speaking of partner companies (and now delving back into speculation), the fact that Foxconn and Fisker are said to be producing a car after Fisker's next car, the Ocean, shows how serious Foxconn is. A Forbes article last month even suggested the Foxconn Wisconsin location as where that might take place (as have others in this thread speculated). Plus, the Ocean was developed by Magna. While so far (to my knowledge), a Fisker-Apple partnership has not been established, this now seems like a good possibility to me.
Comments
Thanks for the link to the video--it was quite interesting...
I knew that Lotus was involved with Tesla, but I didn't think it was as a "partner company" but more as a contract manufacturer. The video suggests Lotus was more of a partner (for a while at least).
Speaking of partner companies (and now delving back into speculation), the fact that Foxconn and Fisker are said to be producing a car after Fisker's next car, the Ocean, shows how serious Foxconn is. A Forbes article last month even suggested the Foxconn Wisconsin location as where that might take place (as have others in this thread speculated). Plus, the Ocean was developed by Magna. While so far (to my knowledge), a Fisker-Apple partnership has not been established, this now seems like a good possibility to me.