larryjw

cloudguy said:

larryjw said:

Best Alternative To a Negotiated Agreement (BATNA). 

It's okay for Apple and these other manufacturers to walk away from negotiations. That's their best alternative -- at this point. 

What has been reported is that Apple has been negotiating with companies who manufacture in the US. At this point, it looks like Apple Car jobs will not be coming to the US. One may bitch and moan about China, et al, taking American jobs, but the truth might be more like Americans, at the least their employers, don't see an upside to more American jobs. 

Apple has succeeded partnering with companies who were hungry and succeeding against companies that too satiated to try something different. 

Is Foxconn hungry? It does seem so. 

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.

prismatics said:

robin huber said:

Yes, because Apple knows nothing about long term service and support. 

In terms of cars, they actually don't.

Furthermore, Mr. Toyoda is not outright pulling a Ballmer here, so the comparison in the article seems to be somewhat unfounded.

I think the phrase reads like Mr. Toyoda says that Apple cannot simply take the profits of selling the car and pass the duty to support it to a manufacturer as these kinds of things last longer than todays tech companies - on average - even exist.

It's hard to imagine an Apple from 2021 still supporting a product from the Apple from 2005, but that is exactly what Toyoda is alluding to.

It seems that todays tech companies are by nature not able to think in such time frames.

blastdoor said:

So much of the experience of traditional automakers isn't really relevant to BEV manufacturing, which is why Tesla was able to build up its own manufacturing capability. 

We take it for granted, but an internal combustion engine, plus all of the cooling and exhaust systems surrounding it, is a crazy complex (and dangerous) beast. It's kind of wild that we all blissfully ride around in metal boxes with a contained gasoline explosion occurring nonstop just a few feet away from us. 

With a BEV, most of the complexity is the battery, and that will be outsourced to experienced firms. 

It's true that the rest of a car is still more complex than a phone, in terms of the number of parts and the process of assembling them. But still -- it's not rocket science. 

dewme said:

emcnair said:

Apple has $193.82 billion in cash. If they are serious about building a car, then they should just buy an existing automobile manufacturer. For example, Mazda is currently worth 5.44 billion.

I think Mazda is already outsourcing a lot of its own manufacturing but I suppose it would give them some relationships already in place. 

I’d love to see Apple do the assembly in Wisconsin at the site that was set aside for the Foxconn fiasco. Something good could actually come from the political theater that took place there. The people of Wisconsin and the US deserve better than what they’ve been dealt.