177 replies
23h5m
Good. This was an idea that never made any sense to me. It’s high overhead/low-margin and requires infrastructure, sales and after-sales support that just aren’t aligned with how Apple does business.
It’s one thing to create a new car company (even tho those attempts usually fail), it’s another to purposefully take it on as a business line when your existing business groups prints money and have 40%+ margins. Especially when you could just have a higher-margin business selling software for other people’s cars.
What surprises me is that it took this long to kill the product. And while I feel bad for the engineers and researchers who worked on this project, this really does seem like the best outcome.
Apple, in a twist of fate, is in the same position that AT&T was when it started Bell Labs, and in the same place as Xerox was when it started Parc.
The history of Parc and Apple is well known, the early history of unix being a thrown out the car window by AT&T at speed to avoid more anti trust issues is often forgotten. Apples products are built on legacies. "Resting on the shoulders of giants" is probably true in this case.
Apple is now an AT&T, its now a Xerox, it is now the company that can just do R&D for the sake of doing it (as can Google and a lesser degree MS). Apple, unlike google, knows how to make a consumer product, and one of these moonshots could make it even bigger...
I wonder if in 20 years something from apples car project changes the industry in a way we never expected. Time will only tell.
Embarrassingly, I was eves dropping on a (loud) woman in a coffee shop who worked on the Apple Car project. She did SLAM work. I was evesdropping because that was a core part of my thesis and I was curious. She told her dining partner she was moved to the Vision Pro team to build the inside-out tracking.
Research for the sake of research sometimes pays off. Who knows if this product will recoup the billions spent on R&D but that’s how the game works.
I am incredibly jealous of you guys living in a place where you just bump into random people at coffeeshops that happen to work on incredibly interesting things. The density of talent must be amazing.
South Bay is just like a giant company town, it’s actually pretty boring - 60% of people work at the same handful of giant companies, the other 30% work at a startup, and the last 10% serve the first group fair trade coffee.
The weather and climate are amazing, but socially its suffocating when everybody you meet is a variation on a tired theme.
haha this, its great to try it, but like NYC, dont stay too long...
What are you talking about, NYC is great! You could live your whole life there and never run out of things to do.
Look, I know I'm being pedantic here, but as a rural nerd, I just gotta say that this is true of literally any habitable location on the planet if you decide to no-life the right hobby or hobbies.
I’m very fond of both New York City, and spending time in nature for the same reason: you just don’t know what you’re gonna see when you walk out your door.
Am I going to hear a violin performance on the subway platform that is utterly sublime from a world class performer?
Am I gonna see the rarest bird in North America perched branch in front of me?
For me, the worst is the middle ground between crazy urban and pure nature where there is low probability of seeing anything exciting.
You mean besides drinking and dining and spending outrageous amounts of money on 13$ beer and overpriced bland food? As a european I dont like the city at all. The only thing going for it is the vibe and the energy of the people. If it werent for the high salaries, people wouldnt be moving here.
It needs serious clean up, from the mentally-sick homeless domesticating the subway, to the stench and the rats, from the grime, to the zero outdoor culture besides the monotonous central park which after dark gets swarmed with rats which my dog loves to chase. They need to narrow the avenues and start building outdoor areas the same way Barcelona is doing. In the winter you put heating mushrooms and you are good to go. NYC has a long way to start looking like a decent city that europeans would like to move to. Americans find it great because its the only thing resembling a city and not an airport where you dont need a car to move around.
Unless the thing is "afford housing"
Yeah, its *super interesting* at first, but once the novelty fades you aren’t left with much.
That said, nowhere on earth had better driving directions on apps since people will notice the bugs on the drive into work and fix them. ;-)
People who work for startups can’t afford coffee?
This was funny and I meant to update it but instead down voted it and now can't find how to undo that. Sorry!
there's a undown button to the right of the username if the timer hasn't expired
You can click the ‘undown’ button next to the username and timestamp of the comment.
They have to make their own, and it’s not fair trade.
And they all drive Teslas with vanity license plates.
I'd argue this is true of a lot of cities where you're likely to bump into anyone, depending on how narrow your scope is of what one considers interesting. Also true of probably most universities if they're doing anything right.
The problem with some particularly uptight places is that people aren't always open to chatting (or maybe under strict NDA), and you want to find a place on that nice area of the venn diagram where you actually do bump into and communicate with new and stimulating people.
Everybody is interesting if you get talking to them. You just think the guy who collects your trash is uninteresting and never talk to him (or do you?). Sure not everyone has the same background, and so they are interesting in different ways, but they are all interesting.
Interests must align. People must know common jargon which convey high density information faster. I would like to have positive ROI on the conversations that I have.
You must be fun at parties.
I usually cringe when people make this quip but it might be the first time I've seen it used effectively.
Having a conversation with someone who provides a perspective or experience I do not have is automatically a positive ROI in my book.
Seems pretty hollow and transactional to me.
That's part of the dice roll. Sometimes interests do align, sometimes they don't, but someone looking for ROI is easily spotted and ran away from. Chemistry and common ground are a matter of luck.
How tiresome
some of my best conversations - that I still remember many many years from them - are from people who have nothing in common to me.
some of them made me question my reality that changed my life, something you may want to try. Even keeping a conversation going that you think is not going well,can be a really good skill to have
This is exactly what I meant, but even beyond relatively common jobs, if you're likely enough to bump into open people, there's a good chance some of them will be doing more niche interesting things too
I’m in Philly and about 20 years ago I sat next to an old man at a dinner for something. Neither of us wanted to be there. We talked, found out we both did tech things. I asked him what he worked on and he said “well back in the day I helped build ENIAC.” I was blown away. Had a great talk.
These are the moments in life to cherish. As Ferris Bueller once said "Life moves fast, if you don't stop to look around once in a while, you might miss it".
Incidentally, one of the scariest things about the volatility in the housing market and in my (lack of) career, is that I may at some point be forced to abandon the neighborhood and city in which I've adopted as my home and in which I've befriended many of these random delightful people of all ages, and they might have to too. They're my community, I see them at the gym, the coffee shop, walking down the street, or at the park. A 1 bedroom condo starts at around $650k CAD, and most of the people here who haven't already owned something for a while depend on renting basements.
These people are everywhere. Most are not stupid enough to yell about it in public.
Why is it stupid to talk about non-confidential aspects of your job in public?
The Apple Car R&D project is (or, I suppose, was) absolutely confidential. I am sure Apple has reprimanded or fired people for less.
Fired people for less than what?
What part of it is confidential? Its existence? Obviously not. The fact that it uses SLAM? Not confidential, of course it does. That a person was transferred from that to the Vision Pro? Probably also on their linkedin page.
Nothing that OP described this person as saying sounds "stupid" or confidential. Sure, maybe they also said something that was confidential in addition to what was described. Maybe they also insulted your mother. We don't know.
Apple employees most certainly cannot talk publicly about unreleased products. Including loudly discussing their roles in restaurants.
Is that an official, Apple-specific policy written down somewhere? That doesn't seem right, and doesn't match other similar companies.
I've known people at Facebook and Microsoft who were working on upcoming not-yet-released products and were free to talk about the products and their roles on them. These people, much like the person we're discussing, worked on upcoming projects which had already been publicly announced.
Of course publicly discussing a confidential project that no one knows about could get someone fired, but that's not the scenario we're talking about.
Yeah, it is surprising. Apple is like fight club.
And I am so happy I live in a place where this doesn't happen.
Interesting, but I can't understand why that makes you happy. What benefit does it bring you?
It can be alienating to move through the world in spaces where your work is everywhere you go. It's a thing I appreciated moving from San Francisco back to the midwest. Every once in awhile, I bump into someone with a Github sticker or whatever, and it's a happy surprise, but for the most part the world I inhabit has nothing to do with my work. Everyone has different things to talk about.
The benefit of being a part of the actual human world, where real people live. Where not essentially everyone is obsessed with their careers and/or comparative wealth. That sort of thing.
Some people like talking about things not related to their job when they aren’t working. The culture out in SV is very much still “work is life”.
I love not having to think or talk about work when I go outside.
If some one asks what I do they'll say "that's neat, must be nice to work from home!" and that's the end of the conversation, we can talk about hobbies or something else instead.
Please elaborate
Interesting things happen in many places, not just Silicon Valley. You simply need to keep your ears open and listen.
The Bay Area is pretty special that way
It is amazing, and happens exactly this way.
I'm a "regular person", engineer, and since moving here over 10nyrars I've met a lot of famous tech people, witnessed lot of amazing things, all mostly by happenstance just because there is so much of it, so many people like me, here.
Different strokes I guess. How long have you been…working? The vast vast vast majority of people want a little more variety in lives as opposed to more more more of the stuff they spend 40+ hours a week doing as it is. The exceptions to this rule are almost always unhealthy workaholics / people that’ll learn about the benefits of work / life balance the hard way. It doesn’t make them some higher tier of world-class engineer like some (often including themselves) expect.
You have to step over the poop and the needles to get into the coffee shop though, and while you're inside your car is being burglarized.
There was a recent YC podcast about Vision Pro where SLAM and the overlap with autonomous vehicles was explained.
Link? I didn’t know YC had a podcast and Google didn't help.
https://www.youtube.com/@ycombinator/videos
Most recent episode?
Tangentially, it's funny to me that people link to YouTube for podcasts these days.
Ohhh. I thought the commenter was using some sort of slang about the quality of their work.
For others out of loop:
https://en.m.wikipedia.org/wiki/Simultaneous_localization_an...
Yes, I also don’t work I computer vision but played with it just a tiny bit—I think somebody saying they worked in SLAM and are moving to a Vision Pro project is not a huge leak or anything. It is like a chemist saying they work in lithium ion batteries and are making the same move. A very broad and fundamental concept.
Maybe the fact that they were moved away from the car project would have been a leak though, depending on what else they said.
People also do that to get insider info to trade on or for industrial espionage/competitor spying. They'll hang out in the lobby of a building, coffee shops nearby, appearing to work while eavesdropping and taking notes.
At my last bigco job, I was advised not to discuss company matters outside of the office.
I know a guy whose job it is to eavesdrop for industrial espionage purposes. Coffee shops and the like are haunts of his, as well as taking commuter flights in and out of SV.
Yeah, I absolutely believe that Apple can bring something to car industry - I remember Elon once said that Teslas hidden strength that no other car manufacturer caught on to was treating the car as technology akin to an iPhone with incremental updates and improvements pushed over the air. I've owned a Model X for a few years and I see that approach but don't think Tesla has perfected it. Apple has the potential to innovate there. Cars, even ones that look like "traditional" cars, have been computers on wheels for a long time - for example, when you press the brakes there isn't and hasn't been for a long time a direct connection to the physical brakes. I have no idea what that would look like, and as someone who thought the iPhone was a worse version of an iPod and that the iPad filled a non-existant need I don't think I can speculate. But it just feels like an area that lags behind in terms of UX, which Apple often excels at.
Edit: I'm a dumb dumb and the brakes example was bad. I don't edit my mistakes in forums so peoples replies make sense. I still think the rest of the point is valid.
I'm sorry but you're getting it completely wrong. Brake by wire isn't legal anywhere in any market of the world and consequently there are zero cars implemented this way - every car currently on sale everywhere has to have a physical connection between the brake pedal and the actual brakes.
Throttle by wire on the other hand - sure. Nearly all new cars only have an electronic throttle.
Steer by wire is making progress, with Lexus making the first road legal car that has a steering wheel that's fully disconnected from the steering rack, with only electronic control.
Thank you, yes that was probably literally the worst example I could have given.
But isn't there famously brake by wire in toyota EVs? And that physical connection is required as a fallback?
Yes, they always have a physical fallback :-) and don't worry the systems like that do exist just not with brakes - it's an easy mistake to make.
Lexus has a backup mechanical link it engages when a fault is detected. The Tesla Cybertruck is the first vehicle on the road with no such backup. They rely on redundancy of motors, power, and compute instead
Does it have a backup link? According to this video:
https://youtu.be/agMrewRJTow?si=DrjfGsrKp5_ZazB-
There isn't a mechanical connection of any kind - the car just relies on triple(!) Backup for every component, including three fully independent power sources.
Lots of cars brake by wire -- but not through the brake pedal.
That seems wrong. My brakes work with both batteries disconnected, though I have to push very hard. Audi made in 2014.
With power brakes, there's a brake booster (usually vacuum powered) which applies most of the force. When the engine is off (or if you have a broken brake booster) braking is entirely on you.
Indeed. The brake boost works one or two times right after engine power down, it's kinda funny - I like to push the brake before getting out just to feel it harden.
I wish more comments were like this. Misjudging the iPhone etc probably just comes down to a lack of information about broader needs. Its not always a bad take.
I think Apple can provide an emphasis on modularity for the car manufacturers. What if you literally had a place to slip in an iPad as your display? What if cars legitimately came with VisionPro type headsets - if not for the drivers, then the passengers. What if apple encourages people fr.shifting away by car ownership by making it easier to jump into a car and have it show all your customizations (lighting, adjustments, heads up display arrangements). Another car company could make the shell and the power train. Apple would handle the "experience" and integrate it into its other offerings. Cloud Cars.
This is just CarPlay or Android Auto though.
Or what if the people who wanted that just bought their headset of choice?
Question: when you get into someone else's car, is the first thing you notice the lighting, or is it how clean it is?
I don't think this is true for most vehicles. Skoda Octavia 2020 for example still has hydraulic brakes. I was going to suggest that no mass-production vehicles use a brake-by-wire system but I would have been wrong, according to wikipedia: https://en.wikipedia.org/wiki/Brake-by-wire
The accelerator likely would have been a better example. I'm not sure that any car currently shipping has a direct connection between the accelerator and a throttle.
Small nitpick but almost every car today still has brakes that work via direct force vs by wire.
https://en.m.wikipedia.org/wiki/Brake-by-wire
When Ma Bell existed, Wall Street wasn't as myopic and short-termist. The stock market tolerated private-sector R&D because it mostly consisted of investors rather than speculators. These days, if something doesn't bear immediate fruit, the Masters of the Universe want no part of it.
And when it does bear fruit, many big tech companies come to copy or purchase it only to have it wither in some corner of their company.
There's always going to be the debate between entrepreneurship vs "intrapreneurship". Whether large companies can successfully develop what amounts of startups in-house with separate R&D labs vs buying startups.
aka The Innovators Dilemma https://en.wikipedia.org/wiki/The_Innovator's_Dilemma
The solution the follow up book to this one ^ was to build isolated teams that are flush with the resources/capital of the parents but aren't at the whims, or constant meddling, of the parent company's management class / stockholders / old ideas.
For all the effort Google/Apple/Meta/Xerox/Bell/etc put into their internal moonshot divisions the whole concept mostly hasn't been very successful.
But at the same time they also haven't been great at buying young up and coming startups either, often ruining them the second they arrive by the same impulses which demands R&D moonshot teams be isolated from the host.
Large companies often are significant investors in small R&D moonshots. Because they own a large part of the startup they can choose to buy it if the product turns out profitable, or they can sell. And since it is a separate investment when things go south they can stop investing and thus save money without appearing to let anyone go.
It's an interesting parallel because part of the unspoken agreement between AT&T and the feds was that they had their monopoly, but had to use the funds for some kind of public good. Bell Labs was part of the public good - and why they employed multiple physicists and materials scientists whose employment involved basically researching whatever they wanted as long as it had some link back. Shannon was hired after his master thesis (which basically created the field of information theory) and, among other things, had a side project involving the application of computers to chess. They constructed the New Jersey lab specifically to encourage watercooler conversations and deliberately had greenhorns to work with the most senior researchers like Shannon. Bell Labs solved engineering problems needed by AT&T and Westinghouse, but they had the financial security to spend money on incredibly theoretical projects like transistors, operating systems (unix), and programming (C). Those pie in the sky projects would both benefit AT&T through automation, and covered the public good requirements of their monopoly.
AT&T (owner of Westinghouse and Bell Labs) then proceeded to take their monopoly and patent factory, and started buying up competitors and new small companies. Eating their golden goose in this way is what caused the government to break them up.
Bell Labs was independent for a few years doing... Stuff. Spent their remaining prestige on falsification scandals because of the publish or perish culture this new profit motive created. They were bought by Nokia a few years ago (now called Nokia Bell Labs) and now only employ a couple theoretical physicists last I read. The lab that put into practice the foundations of modern tech (Unix and C are in almost every non-consumer-facing device) just does some Nokia product development nowadays. What a loss.
It wasn't an unspoken agreement. It was an explict one, the Kingsbury Commitment.[1]
[1] https://en.wikipedia.org/wiki/Kingsbury_Commitment
If jobs was still around I’d be as curious as you. Under cook I have no faith
you're (mostly not) wrong.
If anything of !35 years of cyberpunk input - and output building shit that spies on you:
Apple is Ono-Sendai and your iPhone is your deck. - the real battle is going to be how much agency does a Human Being have over all PII - all their data?
Your jack-in is your screen. Your data is your ID. But, who are YOU?
It even sells goods at Xerox prices!
The problem is that the companies that can do that are rarely also the company's that are willing to do the hard work of productionizing those moonshots. Lots of people have nice salaries and jobs that depend on pumping out ideas and PoCs, but few have a clear dependence on getting it to market.
But the really big stuff all requires working like your future depends on it. They can't do that, so they usually just end up with laundry lists of fancy PoCs.
Even when they work, the rollouts can be glacial at best (eg, Waymo).
I hope so. That would be a great result, even if the consumer product didn’t land. That said, I would argue that sometimes you do just have to call something and move on. You’re right that Apple is one of the few places that can do research for research sake, but this wasn’t a research project. By all accounts this had a real goal of making and manufacturing a car.
It appears this project was in the works for more than a decade, had numerous stops and starts, leadership and focus changes and if your goal isn’t just research for the sake of research (which I do actually think is demonstrably different from Bell Labs or Xerox Parc which are more akin to things like Microsoft Research and Google X and the like), you need to ship at some point.
I think giving ten years to something like this is definitely a gift and I hope we see fruits from some of the work that went into it other places. But at the same time, there are other moonshots you can try if one doesn’t work out and there is arguably a cost if you keep focused on one idea that isn’t going to pan out for too long. Ten years for a project like this seems like a fair amount of time to try and a fair time to pull the plug.
Tim will only tell.
...I'll walk myself out now.
I beg to differ; when I was at AT&T in the late eighties we tried to enter the computer business, on the PC side with Olivetti, and on the UNIX side with the 3B2 minicomputers made with our own chips running System V UNIX. I even had a 3B2-200 in my house for a couple of years.
Entering a new business is hard: although the engineering was solid, we didn't have a saleforce trained in selling computers, and we didn't have a rich ecosystem (Oracle! Ingres! Informix!). AT&T didn't throw UNIX out the window, but found that capitalizing on UNIX was hard.
company that can just do R&D for the sake of doing it (as can Google and a lesser degree MS)
I'm curious what makes you say that about MS? Out of three, I'd actually put MS first and Apple last if for nothing else than Microsoft Research which is like a separate entity in its own strong right (judging from the outside). So many things useless to Microsoft business from them, yet so many many things..
If you look at the market cap of Ferrari, it's not crazy why Apple was considering this.
They could maybe sell 4k cars a year and increase their market cap by $100B (~3.5%).
You could potentially have some shop hand build them and not have crazy cap-ex or infrastructure.
I don't think Apple was planning to take on Tesla in the mass market - that would've been a pretty strange move, I agree.
I’m guessing that most of Ferrari’s market value comes from the brand compared to future revenue or IP. Apple is just not that elite of a brand, I don’t see how selling million-dollar vehicles would significantly change their brand (assuming an Apple logo hood ornament).
Aren't they? Their entire business is pretty much based on brand. Apple products aren't actually better than the competition (often they are worse, like the iPhone not letting you install apps outside the app store). But it doesn't matter because people think Apple is cool. I don't see why that wouldn't translate to cars.
61% marketshare for phones in the US doesn't sound like a luxury brand to me.
They might position themselves as an aspirational brand outside the US, and by keeping retail prices close to the same as in the US, no matter the local purchasing power, I can see how they can be perceived as an upscale brand in some markets.
A luxury car is different to a "luxury" phone, you are fighting for share at the top 10% of the market.
I love how Apple haters don’t understand the phenomenon. Look, I bought Sony headphones, some reference like xixikxixkklkxwx. I now have tinitus. Everyone tells me it’s because I didn’t buy the xixikxixkklkxwii, which were obviously better. The entire PC market is like this. Intel sells i7, but it’s not the same as the i7 of 20 years ago. LG sells screens where you have 90% chances of buying shit and get told “Well they do make good screens, you should have bought the other reference. What did you expect. You noob.” The entire Android market is like this. You buy Samsung and you get OEM preinstalled shit. “Yeah everyone knows you should gave bought the Pixel, not the Samsung.”
So now, instead of buying things twice because the one was shit, I just buy Apple. I don’t buy “the iPhone”. I buy “iPhone”. It could be 99% more expensive, it’s still less than buying things twice.
I don't know why you think one needs to buy Apple in order to get good products. I research and find out what products are good, buy them, and am happy. If you're happy with Apple then good for you, but don't kid yourself that it's because they are just better. They aren't.
See what Rimac did, it is a good example that starting a luxury sports car company and be successful is possible nowadays, and talking from the ignorance it seems to me easier than the past. If that is what apple wants or needs is a different story.
Building supercars has always been a cottage industry that anyone can get involved in but nobody can dominate in the way Apple has certain classes of electronic product. There's a lot of choice, few buyers and it's not high margin compared with mass produced electronics at industry-leading markup even if engineers at the popular companies aren't more obsessed with beauty and speed than the bottom line.
What Rimac did was partner with big automotive OEMs for research joint ventures and sell a tiny number of cars and a relatively large amount of battery and drivetrain tech to other OEMs. Difficult to imagine anything less like Apple's business model than that.
Most of your cottage automotive manufactures are partners with a big brand. You can do many things on your own, but you want the large partner to supply engines (it is basically impossible for a small industry to build an emissions compliant engine from scratch - expect to spend over a billion $ in the R&D if you try - and you can only get that cheap if a lot of the engineering is done in places like India). You also buy your airbags from their supplier.
What companies serve the market segments above Apple's offerings in the phone, laptop, tablet and VR categories?
Ferrari's value is driven more by merchandising than by car sales. Even if a hypothetical Apple car did well, that wouldn't drive billions in sales of Apple branded jackets, hats, luggage, shot glasses, etc.
Ironically this was something Apple used to be good at but they killed off all the fun things with apple branding on them, now all you get is two campus exclusive shirt designs.
I'd love some retro apple "lifestyle" gear, throwback porsche racing jacket would be clutch right now with the yoots
I never understood why each of the flagship Apple stores don’t have custom merch.
I’ll admit that I’ve stopped at plenty of Apple stores while traveling, simply because they’re nearby. They’re usually in very nice locations for tourists (5th av, grand central station, etc) and I can totally see them dramatically improving brand appeal and catering to fanboys with localized tee shirts or Apple Watch bands or polishing cloths or any number of other gimmicks.
Oh and their retro stuff would sell out in an instant. Their 80s stuff was cool.
I would totally buy a (corrected!) Apple Pascal T shirt after the poster.
That was the case until SUV release. Ferrari announced plans to limit SUV sales, but that wont last in light of what Lamborghini is doing.
Exactly, it looked to me like they were going for the supercar market (>$250k price tag, low volume) which (I guess naively) seemed pretty sensible..
It's in opposition to the brand. Apple products range from affordable to aspirational. But every line is carefully segmented so there's a somewhat affordable option - certainly not cheap, but relatively accessible.
And all mass-produced in incredible numbers.
A low volume $250k car would be pure luxury for the sake of it. That's not Apple's market.
Apple's market would be a $50k Tesla killer with far better styling and build quality and some attempt at a game-changing killer feature, all bundled with cross-marketing for other walled-garden products.
I'm not surprised that turned out to be impossible - for now.
A common way to break into the car market is to start with the very expensive cars. You just barely break even at best, but you learn enough in those early cars so that in 5 years you can build the next cheaper model, and so on down the line.
It isn't the only way to break in, but it is common.
Or they could launch some much lower hanging fruit and wait for stock price to appreciate by that much or more. A car company, no matter how small, is very, very hard.
But Apple's M.O. is Toyota volume with Ferrari margins. No way would they be happy selling 4k of anything. And Apple's required margins is why I never thought they would release a car - there isn't enough money in it.
But I guess my question is, why would you bother with only making 4,000 cars a year, if you’re Apple? Especially if the initial cost of making that $100b market cap (which a solid iPhone quarter alone will net you) is more than $100b (not accounting for R&D tax rules fuckery because I’m not versed enough in how all that works and what the current rules are) on development work.
I have similar concerns about the Apple Vision Pro, given its small yields and current high ASP/muted demand, but at least there you can see the vision (pun unavoidable) of how it could eventually be an iPad-sized business or greater. A car only works if you do go after Tesla and Mercedes and BMW, etc.
I just don’t see any reason Apple would enter any business if not to take it on as a mass market player. Selling a $10,000 variant of a $500 watch is one thing (and that strategy failed, for what it’s worth), selling a low quantity machine that you still have to maintain and support that isn’t part of your core competency as a company is something else entirely.
An Apple that doesn't attempt something because it's hard is an Apple that is going to fade. There aren't many trillion dollar markets; I think attempting to break into cars was probably the most accessible of the trillion dollar markets to Apple. What were the alternatives? Oil? Real Estate? ...?
A self-driving car is not something that Apple has any relevant expertise at building. They can't even make siri work well. They had zero hope to make a self-driving car.
That's far from true. They have world class expertise in design and supply chain management. That would transfer over to the car market a lot easier than it would to pretty much any other trillion dollar market.
Shipping a billion iPhones and shipping millions of cars only reasonable each other at a surface level. Apple does not have much expertise in maintaining the same supply chain and logistics, and certainly not in design.
They could hire people with the expertise, but Apple is allergic to growing engineering expertise outside of Cupertino.
They could hire Magna to build it for them!
Then again, that isn't necessarily working out perfectly well for Fisker.
I doubt that's Magna Steyr's fault though. They've produced 10k cars, but Fisker have only delivered half of those, and from everything I've seen, it seems to be well-built from a hardware standpoint.
What AI thing (I can't think of a single one) does Apple excel at?
Waymo and Baidu can credibly claim they have the people and track record to do this thing. Apple isn't anywhere close.
They could easily buy Volkswagen sized company from the reserve cash they have and still have quite a good amount of reserve left. I don't think car experience is something that is the limiting factor.
Yes, let's take a very high margin business to buy a very low margin business. Our shareholders will surely appreciate that.
Or let's bet 2% of valuation to create another high margin business in one of the only sector that could give us trillion dollar more. I am just saying that few 10s of billions are enough to get all the tradition car makers talent, so if they are serious about car this is not the blocker.
Healthcare is still on the table.
Healthcare is even more heavily regulated than the auto industry.
Generally, the closer you are to "people will die if this code has a bug," the more regulated the industry.
People that don't work in a heavily regulated space vastly underestimate the constraints. It's hard enough to create a product that's beautiful and works well at a price point that the market will bear, but it's often near-impossible to do all this while also complying with all the regulations of all the markets in which you intend to sell your product.
It takes a tremendous amount of commitment, money, and time, and companies that aren't used to working within snail's pace regulatory environments quickly lose focus and the projects sputter out.
And apple successfully got wearable health monitoring in their watch to be a thing and got 510(k) clearance as a class 2 medical device etc. They're already big players in health even if not marketed that way.
I don't think an apple that works by stack ranking existing high capex low margin markets and ruthlessly focusing on revenue growth is an apple that's not gonna fade. That sounds more like Amazon's vibe. Creating trillion dollar markets is more apples vibe but that's not exactly an easy thing to do - they're trying again with vision so let's see how that goes.
Apple started work on this car when vehicles were still reasonably priced.
I’d wager this cancellation is purely due to there being no chance in hell Apple could get the Apple premium for it when vehicle sales are stagnating due to massive price increases.
The much-overstated “Apple premium” largely reflects that they don’t compete in the lowest end of the PC/phone market. They’d be competing with BMW, not charging even more.
As a current owner of a BMW 5 series, buying anything non-electric for the price of an EV sounds ludicrous to me. The moment your warranty expires, BMW takes ownership of your wallet and never lets go, and there’s _a lot_ of expensive maintenance and repairs you need to do. I know they also make EVs, but just based on my current experience with their dealers buying anything from BMW would be insanity. Whoever overhauls the ownership experience will make a ton of money. In the meanwhile my next car will be a Tesla. My wife already has a Model Y, and in 3 years we paid $0 for maintenance and the car has been in the shop 0 times.
IOW Apple could easily charge their customary 20-30% margin and create fierce brand loyalty by just looking at whatever it is BMW is doing and doing the opposite in nearly every situation.
A friend used to drive an M3, so I’ve heard plenty about their pricing and how often parts had to be air-shipped.
My point was simply that I don’t think an Apple car would sell for a notably different price than other premium brands.
Agree, repairing a recent-gen out of warranty MacBook at Apple is nearly as expensive as servicing a car. Why wouldn't Apple want those margins from premium cars as well?
You probably haven’t had your car serviced in a while. My BMW is currently is at the dealer, to replace water pump and thermostat. The invoice is $4.5K. The winning strategy for a newcomer is not to charge for repairs, but to create a car that doesn’t need repairs or maintenance.
I have serviced a car, but not a BMW since I don't shit money.
If there's a spectrum where "Apple premium" is a 10, and lowest end of a market is a 1, where do you place these? https://www.apple.com/shop/product/MX572ZM/A/apple-mac-pro-w...
Apple was never going to release a product that would inevitably kill lots of people. Absolute non-starter.
Was the car supposed to have self-driving or something?
I think the implication is that all cars kill people.
Yes
Apple has the data on how many iPhones are being used by drivers, while moving, and how many are involved in accidents. It's almost like if you had a handgun that had a camera on it that knew children where on the other end of the barrel, and had the ability to not fire when the shooter pulled the trigger. Apple knowingly put a tremendous amount of senors on a device that distracts drivers. The class action lawyers haven't figured this one out yet, but give it time.
How would Apple know if the iPhone is being used by a driver, as opposed to a passenger?
Why? Plenty of companies and products kill loads of people or at least are involved in slave labor and environmental damage and their stocks are through the roof and their products fly off the shelves. See Saudi Aramco, Chevron, BP, H&K, BAE, and Nestle.
Do you think Apple and consumers are gonna grow a conscience right now?
Maybe I'm misremembering, but I seem to recall that it was killed once before?
It's been killed, restarted, scaled down, scaled up about every 9 months for the past 10 years.
Is this current news more irreversible?
I expect news to say that the project has been restarted, with smaller scope, by the end of the year.
Yeah based on rumors they were on like version 12 of the program.
I think the Apple car has been killed maybe 10 times or more in the last decade.
It’s been scaled down and then back up, never fully shut down.
The only way it could possibly work was always as an apple branded model under the umbrella of another manufacturer, with their support and dealership network. Think polestar being its own brand but using Volvo workshops for servicing and support, as well as using a lot of Volvo parts internally. I can imagine an Apple car that's just a really fancy version of an existing car, with their own infotainment.
Oh, this I could also see. Apple hates to partner with others, for the most part, which is why I don’t think that happened. And some of that is for good reason. The awfulness of the Motorola Rokr is what convinced Steve Jobs that Apple had to fully own and control the iPhone.
And Apple is showing off parts of Car Play that could be fully integrated by manufacturers in a much deeper way, assuming they want to give up control (which given GM’s decision to drop Car Play and Android Auto, seems like it’ll be a challenge).
There is certainly a world where Apple could be a modern QNX unencumbered by its parent company baggage and a better business model (ongoing subscription and not 50-cents a car or whatever it is QNX gets) and provide the software for all that stuff, but based on everything that has been reported, that wasn’t what Apple was doing here. They were trying to build a real car. And as challenging and interesting as that might be as an R&D exercise, I just don’t see why that would be a business you’d willingly want to enter when you are so successful in other areas and the margins are so poor.
I think I know why GM and the others fear CarPlay and Android Auto, but it's just so dumb to me.
It makes sense for companies like Netflix to shy away from the Apple "walled garden." They want to deliver a unique experience with exclusive content, not just be another content supplier to the Apple experience. They don't want to wind up like the record companies.
But car manufacturers? There's a whole lot of stuff going on w.r.t. your driving experience. Like driving. Hundreds of physical things. Etc. Unlike the media industry I can't think of a future where the car companies eventually find themselves subsumed by allowing CarPlay integration.
Then again, I can't tell what's the main fear... if car companies are scared of getting iTunes'd, or if they really just want that revenue from 5% of car buyers paying for the Premium GM Infotainment Experience Recurring Subscription or whatever.
From my past discussions with car executives (that are ~10 years old so grain of salt), I really do think it’s as simple as that recurring infotainment subscription revenue.
The small margin GM gets on its cars is buffered by the revenue splits it gets with Sirius XM and the various call for assistance services. Sirius revenue is on the decline because everyone listens to Spotify on their phone. The GPS revenue stream died with Google Maps on phones. So they have to try to lock in those fees where they can. See also: BMW selling a subscription to unlock features like heated seats.
Now, I think this backfires for GM. I think way more people will not buy new cars if they lack Android Auto or Car Play than they think. I also think that it will be harder to maintain the apps and services than GM thinks. When Ford was doing its partnership with Microsoft 15 years ago (and then they took it in-house because Microsoft Connect or whatever it was called was buggy as hell), I think that made a lot of sense. But it was also expensive to do and so you saw the car companies offload a lot of those details to Apple and Google via a QNX or other middleware layer. Tesla built its own software as sort of a foundational part of the car experience, and I think it has worked well for them. I don’t have the same confidence in GM.
The thing is, if GM just made a $30 a month connected car subscription package to unlock Car Play and 5G assistance or whatever, I think they’d sell tons of it. People would complain but I know that I would pay the money in a second versus trying to pair my phone with a non-Car Play infotainment system. But I bet Apple and Google would insist on 30% of that revenue (at least).
They wouldn't have needed to partner; they could have bought a small car manufacturer like Polestar outright.
I suspect Ioniq 5 and 6 were supposed to be those models, up until Hyundai exec leaked negotiations to media presumably thinking it'll somehow give them advantages. Timelines match up.
I always thought Apple was far and away the best consumer electronics brand at this part at least. I'm not saying it would directly translate to a car business, but they do have some real retail skill.
I was going to say. If anyone knows how to quickly create and expand a network of dealerships and post-sales support, it's Apple. They literally wrote the book on this with computers and phones and all their accessories.
They didn’t though. They piggybacked off of the existing network of phone carriers. They did slowly build out Apple Stores. But they aren’t nearly as ubiquitous as resellers and carriers for selling devices
Cars are different both for sales and more importantly for support. Apple is best in class for a turnkey consumer experience. But if you’ve ever had to deal with Apple Care Enterprise, which is a lot more similar to the sort of support you have to do for luxury cars, in my experience it just isn’t the same. It is fine, but it isn’t the same experience that a consumer gets (I’m unsure of what the experience is like for people that shell out the money for the on-site support from IBM or whoever the contractor is now).
And that’s the thing. Apple does really well at attainable luxury consumer goods. I think it does less well the higher the price point and market segmentation. Hence why the $10,000 Apple Watch didn’t work (and that was for lots and lots of reasons, first and foremost I think a misunderstanding of why watch enthusiasts spend so much on watches).
But putting that aside, partnerships (dealers) make up the car market for everyone with the exception of Tesla, and although with enough time and money, Apple could absolutely build out their own network, unlike Apple Stores, where they had a solid 5 years to a decade to really grow (coincidentally timed to Apple’s rise as a consumer giant) into that infrastructure, they’d need to have that basically day one for a car. Which is my whole point about it being overhead/capital intensive. Even Tesla had a chance to grow over time as it was a new company and not expected to sell and service cars everywhere. Apple would have a difficult time, I think, releasing a car and saying it could only be bought and serviced in select cities. The stakes are higher the bigger you are.
It isn’t that I don’t think Apple could do these things. It’s that I don’t think Apple could do them at the scale and margins at which it has based its business on. Especially if the net result is growing $100b in market cap. Apple added $1T to its market cap in 2 years (2018 to 2020) and another briefly in 2023 (current is $2.82T). I think there are far less intensive ways to add $100b to the bottom line than to become a car company.
I didn't realize Apple literally wrote a book on the subject. Sounds interesting, what's the title?
I just don't see how they can make any more money with "generative ai" than a useful tool that actually can get me around. Seems like chasing after fool's gold.
Seems more like a defensive play rather than one designed to directly open new revenue streams.
In the short term, Google is going to fully integrate Gemini into Google Assistant (the takeoff has been bumpy but there is a chance they stick the landing). The risk there being that Siri will fall further behind.
In the long term, capable models will be running locally on device. Google's past mobile AI plays haven't moved the market much. But the risk is that generative AI is a paradigm shift that will unlock some game changing capability that could catch Apple off guard.
Same story with Microsoft and Copilot on the desktop.
If your two primary competitions are doing similar things then you start paying attention.
A "defensive play" would hardly involve investing in a technology with zero demonstrated value.
It’s insane to say generative AI has zero demonstrated value. I use it every day.
For a strictly vibes-based technology bubble, it can be valuable to invest a little in vibes, if not necessarily technology. Claiming you're assigning employees to a buzzword is very affordable.
Also bad. From the article:
So, the people that failed to build a car, when Tesla, Xiaomi, BYD and half a dozen EV startups succeeded, will now fail to build generative AI.
I don’t work at Apple (so I don’t know for certain), but I don’t think the point of the Apple Car was ever to just copy the industry and produce an EV; it was to reach the holy grail of a fully autonomous vehicle, which no manufacturer has been able to successfully build.
Lucky for Apple, generative AI doesn’t need to work for 100% of the cases to be successful, unlike autonomous vehicles, so maybe Apple has a better chance to be successful this time.
I get what you're saying, however I don't think that's true:
Otherwise, why release a device like the Apple Vision Pro? It's also very far from the holy grail of AR/VR.
It's very heard to beat the state of the art. It's almost impossible to surpass it by some unbelievable margin. It seems very unlikely that fully autonomous driving was the goalpost for going to market.
Much more likely, the project failed for more mundane reasons -- they figured out their EV would be somewhere between a Tesla and a Mercedes on the luxury scale, but with better integration into the Apple ecosystem. When the market for EVs cooled down and many traditional car companies already launched EVs, it became clear that they're both too late and entering a highly competitive market with small margins.
In 2016 the Lyft cofounder predicted that by 2021 the majority of their network would be fully autonomous. The general public was led to believe that the technology was close to fruition. Apple execs having similar aspirations at the time makes sense. But we now know that that prediction isn’t coming true any time soon.
I’m not sure why everyone thinks that Apple only wanted to create an EV to compete with Tesla or BYD. Given that the Apple execs thought that fully autonomous driving was achievable, it’s possible that Apple wanted to introduce a mobile entertainment pod-type product which may have been relatively lucrative as a premium luxury product at first and later could have become a good product for keeping mindshare when the general public used it for their daily two hour commutes.
But after COVID started the work from home movement, Apple pivoting to a product like Apple Vision Pro makes more sense when the importance of commuting lessened. Peering backwards in time the decisions that Apple made look logical. Now whether Apple can monetize generative AI by leveraging their iDevices market share will determine whether they can make it to a 4T market cap. Apple has a tough mountain to climb going forward since none of these products are sure hits like the iPhone was.
I mean, for Apple, it absolutely makes sense.
Electric vehicles are relatively straightforward to make. Everyone and their mother are producing some sort of electric scooter/dirt bike these days with new companies popping up every month. Furthermore Tesla has proven that for a lot of people a car is simply an appliance.
Apple could easily outsource most of the functional development and design and certification, and then focus on their core competency which is aesthetics and marketing and integration into iOS ecosystem, which would be a winning combo economically.
Interesting, it doesn't feel like this at all, to me. It seems that, relative to its market share, a lot of Tesla buyers make the brand part of their identity. Who "settles" on a Tesla when they don't care about what they drive?
Tesla has many faults to it. Poor materials, lack of general reliability (door handles getting stuck, spoilers getting stuck up), NVH issues, and so on. Many people don't really care that much about those issues though, as long as the core use of the car to get from point a to b is there, and being able to top up at home is convenient, and maintenance costs are way lower.
Having worked at a car company, this is categorically false. Cars have thousands of moving parts (even EV's), are expected to operate reliably for a decade, represent the second most expensive thing most people will buy and any mistakes will kill people.
If it were easy, we'd see a lot more profitable car companies.
I think this made a lot of sense circa 2011 when it looked like autonomous vehicles were about to rapidly reshape the world around us.
While it may yet happen, the "about to" part of course turned out wrong. There was no AV revolution in the late 2010s, and Apple reportedly pivoting away from self-driving a couple of years ago was probably the actual death knell for the project.
Apple making an AV in the middle of the self-driving revolution makes sense; Apple making just a nice EV in a very crowded market does not.
There are very few businesses which can add 1+ Trillion to a companies market cap. To grow at pace with the S&P, Apple needs to find a new 1 Trillion dollar business every 2-3 years.
Cars were a good candidate, but it sounds like AAPL now thinks that GenAI is a better bet. ChatGPT is such a basic product, that it sounds reasonable that there will be bigger and better products in the future.
Probably, but who knows with Apple. I suppose they could have created a cheap Citroen Ami type thing with some cool tech and just doubled the price because it's Apple. I would assume they got into it because they saw a product with good margins.
If you think about it cars are poorly designed for the average journey. They tend to be designed for that one time you actually need to drive 300km, or the one time a year you need to fit 5 people in the car, or the one time you need to load 3 suitcases in the boot. And in America they're also way too big for no good reason.
Apple more than anyone might have been able to experiment with the conventional car design perhaps.
But we don't really know what they were trying to do do we? I think you assuming that they were just trying to create another low margin electric car company to compete the likes of Tesla and Ford is probably wrong though.
Only if they were to sell vehicles. I think it's more likely they were planning on having a fleet of self driving cars.
I agree with your entire comment but have some nuance about one point:
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
The only time it made sense to me was the idea they had some proprietary or trade secret 10x battery efficiency breakthrough from their work on computers and had a massive opportunity to utilize it in electric car space. Otherwise struck me as as a "tesla is doing this so we should too" move.
Apple probably envisioned not a car company but a revolutionary personal transportation industry that highly integrates compute power in the form of self-driving AI. Remember, Steve Jobs famously poopooed the Segway. It doesn't surprise me that they got into it and then took their time. With advances in robotics and more powerful AI on the horizon, I can see a reasonable internal debate on whether to stay the course on R&D or not.
I suspect Ive (and Jobs) had a big impact on how this project got off the ground.
https://www.theverge.com/transportation/2015/2/16/8045625/jo...
Right. The electric car business took a wrong turn when most of the players decided that electric cars were a premium product that could be sold with huge margins. Tesla started there, and it seemed to be working for them. This led to excesses such as the electric Hummer, a 9,000 pound vehicle with sports car acceleration and a price in 6 figures. It's a great engineering achievement but a silly product. It also led to electric versions of vehicles having a price premium around US$10,000 over the same model with internal combustion.
Then Tesla exhausted the fanboy market. Reality ensued. Price mattered. Tesla had to start offering discounts.
This is a big problem for some major car companies that bought into the high margin myth. Ford should have known better. Stellantis' CEO was running around saying that they were going to get margins like tech companies, partly by adding on aftermarket fees. That didn't work out.
Electric cars are doing just fine, and prices are coming down. That's a good thing. BYD gets this.
Having to compete on price scares Apple.