A car will not be the same high margin product as a consumer electronic. Even if they can sell the car and make a profit, will it be worth it from a margin perspective. Will the profit be big enough based on the investment?
Apple could come up with a better milk jug and sullen billions of gallons of milk, but the margin would be so low it is not worth it for Apple. I am betting the car market is similar in that regard. I'd like to be proven wrong.
So a former executive from a famously bankrupt money pit of a car company feels that someone else can't do what he fails to do. The only people who should feel alarmed about this are the stockholders in the media company that went out of their way to try to turn this into news!
The auto industry is fat, lazy, and ripe for disruption. Tesla, Apple, Google, and others not even born yet will eat their lunch. Competition, experimentation and innovation among them will drive costs down. The internal combustion engine is a legacy technology that will be marginalized long before the end of this century. Detroit will cling to what brought them to the dance until the bitter end. Those old line companies that survive will struggle to catch up.
Apple is the pit into which I keep throwing my money. They don't seem to be suffering from it. White Falcon: have you heard of the marketing concept of loss leader? ?Music—at least for now.
In other words anyone can act stupid which doesn't exclude those at Apple.
With anyone else, I'd say "go troll somewhat else."
But with you, why bother... meh.
Do you really think Apple is infallible, and incapable of making a misstep? I don't think they're going to fail but this is one endeavor in which they'll need a lot help from the others. A great many people don't have a driveway, or garage to plug an electric car into, and nobody is going to make a large capital investment in charging stations until they know they're going to make money off them.
The internal combustion engine is a legacy technology that will be marginalized long before the end of this century.
Perhaps, but electric cars are not as "green" as some people make them out to be. Lithium production for the batteries is very destructive to the environment and the worldwide reserves of Lithium are not enough to sustain the projected needs of electric vehicles and portable electronics. Unless we can find better battery technology that is not as destructive, the future of all vehicles becoming electric is not as assured as some might argue.
Also electric is not really practical for aviation, so we will continue to use fossil fuels and internal combustion engines for just about anything airborne at least for those designed for heavy loads or high speed.
The auto industry is fat, lazy, and ripe for disruption. Tesla, Apple, Google, and others not even born yet will eat their lunch. Competition, experimentation and innovation among them will drive costs down. The internal combustion engine is a legacy technology that will be marginalized long before the end of this century. Detroit will cling to what brought them to the dance until the bitter end. Those old line companies that survive will struggle to catch up.
There is still 85 years until the end of the century. And while the internal combustion engine maybe a legacy technology, it is not clear that the electric car will be its replacement. At least in any form we see today or in the near future. The world will be using internal combustion engines predominantly for years to come.
(1) car has been evolutionary for many years. as for revolutionary product, need some outside box thinking, hopefully, Apple is not just follow the foot steps of those in the standard auto field.
(2) Money pit? there are few money pits: take a risk to short cuts to save few penning of the parts and recall many in the field is one of them. Software cheat is the another. As for real R&D and solid ground work in quality, if done properly, (marketing allow you to re-cover quickly the cost before the copy cat catch up), it should have better chance to make money (allow you to stay lead long enough).
(3) The car is a big computer nowadays. to done it properly, you can get the car guys learn how to utilize the auto-control, or you can get the computer geek to learn how to make the transportation gear (not necessary in traditional car format). - however, too "strange" of format might turn off the customers. That is a "wash" in terms of apple vs auto. strategic planning will pay off.
(4) Design pays. - industry design make tons of money (assume the material cost more less the same). Apple might have an edge.
(5) personally, never like totally lost control.. such the google auto car. however, using satellite gps control to group all the cars to the same destination make sense to eliminate traffic bottleneck and enhance safety. To get insurance to accept that is different story. (advance is not only for technology, but other factors plays important role too).
(6) Best of luck to Apple if they try to get into the car business. Hopefully, it will be different, not just another big auto...
If Apple is getting in to the electric car game, its because they can already see the profit endgame. On the contrary Lutz, those auto manufacturers ought to start paying attention to the Apple rumors...because clearly Apple has figured out something they could not.
Absolutely, the question Lutz should be asking, "If Apple is interested in this industry, I wonder why this is so?...maybe it's because fill in the blanks here, here and here."
Possible 'fill in then blank' reasons:
- Apple is already in the design business
- Apple is already in the product supply business (esp. with OEMs in Asia and South America). Why recreate a drive-train that China and Korea already pieces together at an efficient price point?
- Apple is already in the computing industry
- Apple is already in industries of batteries, glass, metals, mapping, security, robotics, etc.
- There are many types of "vehicles" coming in the future. With mapping, lidar, GPS, Moore's Law, etc. vehicles will indeed be smarter which will evolve transportation to who knows what?...4 passenger small/smart cars for local travel, 2 passenger golf cart-like vehicles, single passenger for cities. I can see small highways replacing a standard 35 mph lane with a lane restricted for electric/small/25 mph vehicles within 10 years.
With all of the above, and as a shareholder, I am excited to know that Apple is seriously considering this industry.
Edit: and to be clear, all of the above vehicles COULD be autonomous, especially if speed is limited to like 25 MPH.
Actually, Lutz has a very strong track record, and deserves more respect than he's likely to be shown here.
The thinking of "Apple has been successful in most stuff since 1998, therefore everything they do will be a huge success" is dangerous and wrong.
If Apple enters this market using a business model that is similar to GM then Lutz will be correct. I don't think Apple will do that, but at this point we don't know.
More specifically, the model I think Apple needs to avoid is the model in which a company sells cars directly to consumers. That model necessitates a huge investment in distribution and support (show rooms and repair shops, just to name two big items). It also fails to differentiate Apple from the competition enough to justify a decent profit margin.
The model that Apple needs to focus on is a model of selling transportation, not cars. Apple's competitor here is Uber, not GM. And Apple's advantage over Uber is vertical integration, brand, capitalization, and the ability to bundle their transportation service with every iPhone sold.
Mark my words people -- Apple will not be selling a car. They will be selling transportation, using a car Apple designs and a contract manufacturer builds. It will be a service available to all iPhone / Apple Watch users, not a standalone product.
Back in February, GM's ex-CEO Dan Akerson said of the rumored Apple car: "If I were an Apple shareholder, I wouldn’t be very happy."
Now GM's ex-Vice-Chairman Bob Lutz says, "If I were a shareholder I would be very upset."
See a pattern?
First of all, they apparently don't own shares in Apple — but each of them probably has significant wealth tied up in GM stock. Even assuming their comments are sincere and not motivated by self-interest, these guys don't know what they're talking about because they really don't know Apple. (Lutz, for example, claims "Apple has no expertise in batteries. They don't make batteries." iPhone, Bob... ever heard of it?)
In fact, Apple almost never focuses outwardly on share price, quarterly returns, and all the other things that keep large companies from thinking long term and making big bets.
However, Apple's expertise includes most of the necessary aspects of car-making: engineering and industrial design, material science, software and user interface, supply-chain management, mass-scale manufacturing, and yes, even battery technology... as well as vast success in retail, customer service, green practices, consumer products marketing and on and on and on.
So while some retired car guys can only see this through the lens of money, Apple is looking at a tired product category and figuring out if they can create a better product and a better experience.
Wall Street clamors for growth, and that's pretty tough to come by when you're already the world's biggest company. Finally, let's remember where GM makes most of its money: financing. So if Apple makes and sells a line of cars, I think today's share price is going to look like a bargain. Bob Lutz, wanna bet?
Back in February, GM's ex-CEO Dan Akerson said of the rumored Apple car: "If I were an Apple shareholder, I wouldn’t be very happy."
Now GM's ex-Vice-Chairman Bob Lutz says, "If I were a shareholder I would be very upset."
See a pattern?
First of all, they apparently don't own shares in Apple — but each of them probably has significant wealth tied up in GM stock. Even assuming their comments are sincere and not motivated by self-interest, these guys don't know what they're talking about because they really don't know Apple. (Lutz, for example, claims "Apple has no expertise in batteries. They don't make batteries." iPhone, Bob... ever heard of it?)
In fact, Apple almost never focuses outwardly on share price, quarterly returns, and all the other things that keep large companies from thinking long term and making big bets.
However, Apple's expertise includes most of the necessary aspects of car-making: engineering and industrial design, material science, software and user interface, supply-chain management, mass-scale manufacturing, and yes, even battery technology... as well as vast success in retail, customer service, green practices, consumer products marketing and on and on and on.
So while some retired car guys can only see this through the lens of money, Apple is looking at a tired product category and figuring out if they can create a better product and a better experience.
Wall Street clamors for growth, and that's pretty tough to come by when you're already the world's biggest company. Finally, let's remember where GM makes most of its money: financing. So if Apple makes and sells a line of cars, I think today's share price is going to look like a bargain. Bob Lutz, wanna bet?
Remember also that Apple has some very interesting patents on wireless power transmission to electric cars. No more stopping for recharging...ever!
This really reminds me of the Blackberry executive before the first iPhone came out. Deja vu! I know it's difficult for companies to enter into certain markets... but if there's one company that could succeed, it'd be Apple surely. I wonder if Samsung or Google would bother attempting a similar endeavor?
Having noting to do with my preference for Apple's devices, I do have some knowledge about Lutz's rather impressive accomplishments earlier in his career and what a clown, with the media's help, he has made of himself over the last six or seven years.
Earlier in his career, he was a very astute and accomplished auto exec who spearheaded many extremely successful and innovative projects. More recently, he has made himself the object of ridicule and jokes by saying a lot a very uniformed things reflecting his expertise is long gone. He's a great foible for the press. He is very opinionated and easily provoked. He makes a lot of demonstrative and specific statements, very few of which are proven out by the facts or events that follow. He does deserve respect, but he makes it hard when he keeps making a fool of himself and keeps allowing the press to use him like they do. It's as if an editor says call Lutz. He'll give us something colorful and somewhat ridiculous that will generate a lot of response and pump up the comments and page views. Most of the more astute auto tech sites regard him with raised eyebrows as if to say, "Oy vey, what is Lutz going to say now."
The more he makes public statements, the more he does to weaken his legacy. I wish he had just retired gracefully. Some of the old airline CEOs have the same problem. The press calls and they bite the bait despite the fact the current industry bears little or no resemblance to the industry when they were on top. More than anything else, it is sad.
Lutz makes an azzclown of himself just like Jack Welch does these days. Once glorious corporate warriors who've never let go with grace. Sad, very sad.
Comments
Apple could come up with a better milk jug and sullen billions of gallons of milk, but the margin would be so low it is not worth it for Apple. I am betting the car market is similar in that regard. I'd like to be proven wrong.
Do you really think Apple is infallible, and incapable of making a misstep? I don't think they're going to fail but this is one endeavor in which they'll need a lot help from the others. A great many people don't have a driveway, or garage to plug an electric car into, and nobody is going to make a large capital investment in charging stations until they know they're going to make money off them.
The internal combustion engine is a legacy technology that will be marginalized long before the end of this century.
Perhaps, but electric cars are not as "green" as some people make them out to be. Lithium production for the batteries is very destructive to the environment and the worldwide reserves of Lithium are not enough to sustain the projected needs of electric vehicles and portable electronics. Unless we can find better battery technology that is not as destructive, the future of all vehicles becoming electric is not as assured as some might argue.
Also electric is not really practical for aviation, so we will continue to use fossil fuels and internal combustion engines for just about anything airborne at least for those designed for heavy loads or high speed.
The auto industry is fat, lazy, and ripe for disruption. Tesla, Apple, Google, and others not even born yet will eat their lunch. Competition, experimentation and innovation among them will drive costs down. The internal combustion engine is a legacy technology that will be marginalized long before the end of this century. Detroit will cling to what brought them to the dance until the bitter end. Those old line companies that survive will struggle to catch up.
There is still 85 years until the end of the century. And while the internal combustion engine maybe a legacy technology, it is not clear that the electric car will be its replacement. At least in any form we see today or in the near future. The world will be using internal combustion engines predominantly for years to come.
(1) car has been evolutionary for many years. as for revolutionary product, need some outside box thinking, hopefully, Apple is not just follow the foot steps of those in the standard auto field.
(2) Money pit? there are few money pits: take a risk to short cuts to save few penning of the parts and recall many in the field is one of them. Software cheat is the another. As for real R&D and solid ground work in quality, if done properly, (marketing allow you to re-cover quickly the cost before the copy cat catch up), it should have better chance to make money (allow you to stay lead long enough).
(3) The car is a big computer nowadays. to done it properly, you can get the car guys learn how to utilize the auto-control, or you can get the computer geek to learn how to make the transportation gear (not necessary in traditional car format). - however, too "strange" of format might turn off the customers. That is a "wash" in terms of apple vs auto. strategic planning will pay off.
(4) Design pays. - industry design make tons of money (assume the material cost more less the same). Apple might have an edge.
(5) personally, never like totally lost control.. such the google auto car. however, using satellite gps control to group all the cars to the same destination make sense to eliminate traffic bottleneck and enhance safety. To get insurance to accept that is different story. (advance is not only for technology, but other factors plays important role too).
(6) Best of luck to Apple if they try to get into the car business. Hopefully, it will be different, not just another big auto...
my 2 cents.
If Apple is getting in to the electric car game, its because they can already see the profit endgame. On the contrary Lutz, those auto manufacturers ought to start paying attention to the Apple rumors...because clearly Apple has figured out something they could not.
Absolutely, the question Lutz should be asking, "If Apple is interested in this industry, I wonder why this is so?...maybe it's because fill in the blanks here, here and here."
Possible 'fill in then blank' reasons:
- Apple is already in the design business
- Apple is already in the product supply business (esp. with OEMs in Asia and South America). Why recreate a drive-train that China and Korea already pieces together at an efficient price point?
- Apple is already in the computing industry
- Apple is already in industries of batteries, glass, metals, mapping, security, robotics, etc.
- There are many types of "vehicles" coming in the future. With mapping, lidar, GPS, Moore's Law, etc. vehicles will indeed be smarter which will evolve transportation to who knows what?...4 passenger small/smart cars for local travel, 2 passenger golf cart-like vehicles, single passenger for cities. I can see small highways replacing a standard 35 mph lane with a lane restricted for electric/small/25 mph vehicles within 10 years.
With all of the above, and as a shareholder, I am excited to know that Apple is seriously considering this industry.
Edit: and to be clear, all of the above vehicles COULD be autonomous, especially if speed is limited to like 25 MPH.
Actually, Lutz has a very strong track record, and deserves more respect than he's likely to be shown here.
The thinking of "Apple has been successful in most stuff since 1998, therefore everything they do will be a huge success" is dangerous and wrong.
If Apple enters this market using a business model that is similar to GM then Lutz will be correct. I don't think Apple will do that, but at this point we don't know.
More specifically, the model I think Apple needs to avoid is the model in which a company sells cars directly to consumers. That model necessitates a huge investment in distribution and support (show rooms and repair shops, just to name two big items). It also fails to differentiate Apple from the competition enough to justify a decent profit margin.
The model that Apple needs to focus on is a model of selling transportation, not cars. Apple's competitor here is Uber, not GM. And Apple's advantage over Uber is vertical integration, brand, capitalization, and the ability to bundle their transportation service with every iPhone sold.
Mark my words people -- Apple will not be selling a car. They will be selling transportation, using a car Apple designs and a contract manufacturer builds. It will be a service available to all iPhone / Apple Watch users, not a standalone product.
Back in February, GM's ex-CEO Dan Akerson said of the rumored Apple car: "If I were an Apple shareholder, I wouldn’t be very happy."
Now GM's ex-Vice-Chairman Bob Lutz says, "If I were a shareholder I would be very upset."
See a pattern?
First of all, they apparently don't own shares in Apple — but each of them probably has significant wealth tied up in GM stock. Even assuming their comments are sincere and not motivated by self-interest, these guys don't know what they're talking about because they really don't know Apple. (Lutz, for example, claims "Apple has no expertise in batteries. They don't make batteries." iPhone, Bob... ever heard of it?)
In fact, Apple almost never focuses outwardly on share price, quarterly returns, and all the other things that keep large companies from thinking long term and making big bets.
However, Apple's expertise includes most of the necessary aspects of car-making: engineering and industrial design, material science, software and user interface, supply-chain management, mass-scale manufacturing, and yes, even battery technology... as well as vast success in retail, customer service, green practices, consumer products marketing and on and on and on.
So while some retired car guys can only see this through the lens of money, Apple is looking at a tired product category and figuring out if they can create a better product and a better experience.
Wall Street clamors for growth, and that's pretty tough to come by when you're already the world's biggest company. Finally, let's remember where GM makes most of its money: financing. So if Apple makes and sells a line of cars, I think today's share price is going to look like a bargain. Bob Lutz, wanna bet?
$25k is the low price end of the spectrum, or at least bottom third.
What in Apple's history of top tier pricing makes you think that this is a price arena they'd be at all find interest in?
Does the Watch Sport count? The iPod Shuffle?
It doesn't rhyme, but "dumbass" seems to fit best.
Remember also that Apple has some very interesting patents on wireless power transmission to electric cars. No more stopping for recharging...ever!
what a stuffed shirt.
Earlier in his career, he was a very astute and accomplished auto exec who spearheaded many extremely successful and innovative projects. More recently, he has made himself the object of ridicule and jokes by saying a lot a very uniformed things reflecting his expertise is long gone. He's a great foible for the press. He is very opinionated and easily provoked. He makes a lot of demonstrative and specific statements, very few of which are proven out by the facts or events that follow. He does deserve respect, but he makes it hard when he keeps making a fool of himself and keeps allowing the press to use him like they do. It's as if an editor says call Lutz. He'll give us something colorful and somewhat ridiculous that will generate a lot of response and pump up the comments and page views. Most of the more astute auto tech sites regard him with raised eyebrows as if to say, "Oy vey, what is Lutz going to say now."
The more he makes public statements, the more he does to weaken his legacy. I wish he had just retired gracefully. Some of the old airline CEOs have the same problem. The press calls and they bite the bait despite the fact the current industry bears little or no resemblance to the industry when they were on top. More than anything else, it is sad.
Lutz makes an azzclown of himself just like Jack Welch does these days. Once glorious corporate warriors who've never let go with grace. Sad, very sad.