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From one point of view I don't buy in the skepticism surrounding an Apple Car. As many issue could exist, and this article present a long list, Apple has the re

by LukaAl 11y ago

From one point of view I don't buy in the skepticism surrounding an Apple Car. As many issue could exist, and this article present a long list, Apple has the resources and the capabilities to overcome them. The problem for Apple right now is that is so huge that any business idea is so small in scale that doesn't move the needle. I mean a 1 billion dollar idea is a great pitch, but for Apple is less the 0.5% in revenue, doesn't make the board level. From this point of view there are very few industry where you could venture with such a huge scale. The automotive industry is one of them and appears to be ready for disruption. The problem as mentioned in the article is the incredibly low margin. I don't believe you could cut a lot on the cost of production, years of experience have optimized the process an the material that get into a car is that much, you could reduce them by a lot without impacting safety. Apple could try to put a premium on their car, and the margin on ultra-high premium car (Ferrari, Lamborghini...) are higher than Apple's margin. But the price is so high that the revenue is razor thin. The point is, a 30% premium on a device that costs on average 400$ is 120$, doesn't reduce the buyers pool by a lot. A 30% premium on a 20K car is 6K, it change a lot. And if you go in the premium segment is even more. Final consideration, maybe the price Apple is aiming are not electric car but direct competition with Google's self-driving car. Or if you want car as-a-service. It is something not totally in Apple's DNA but it could provide hefty profit margins. Could be that the release date is 2029 and not 2019?

ctdonath 11y ago
Somebody is arranging to build a car factory in Atlanta. No names given yet.
- arjunrc 11y ago
  Do you have a source to this? I haven't seen any news regarding this in any of the auto websites or related sub-reddits
  - OopsCriticality 11y ago
    http://faradayfuture.com/press/20151105.html http://faradayfuture.com/press/20151105.html
- LukaAl 11y ago
  That's an interesting news but I don't think it will be Apple. Car manufacturing requires volume to be efficient (like any mass produced product, ça va sans dire). But it is also extremely expensive to ship compare to their retail price (you could put approximately two car in a full size container but 44k iPhones, do the math). Let's try to do the Apple's strategy. Apple could go for the Luxury market (BMW series 7, Maseratis and upper). The price, and more important, the margin you have, is high enough to make the transportation cost low enough. At the same time you don't have enough volume to have multiple factory. In this situation you build just one factory. Atlanta is an interesting spot due to it's good connections with the rest of the US and it's comparatively low labor cost (to the Bay Area). But it is on the east coast while it is probable an Apple Car in this price range will have more buyer on the West Coast. Plus in car manufacturing labor cost is a small factor (especially in the luxury segment). But staying close to the hq is a very important factor, especially for your first model. Plus, if you are planning to source component from Asia (electric motors, chips, batteries) being close to a port like LA or San Francisco could be a benefit. Let's make the hypothesis that Apple is going for a relatively mass market instead (affordable premium, a BMW series 3, but the reasoning holds also for cheap subcompact). Apple probably needs more than one production plant if it plans to launch internationally, but a single plant is enough for the US market and the reasoning before still holds. Actually, in this scenario Apple needs to work out faster the productions issue so being closer to home is beneficial. This obviously is true if you think Apple will produce the car. But it doesn't make sense based on their production philosophy, and it will be a massive investment when there are "white label" car manufacture ready to be the Foxconn of Apple Car. The first name I could came up is Magna Steyr but if they go for low volume super luxury there are a bunch of small manufacturer in Italy with a good pedigree (Touring, Bertone) with the know how, the production capacity, and the brand that fits Apple needs. I'm not saying you are wrong, even if my bet for the plant in Atlanta is for a European Automaker, I'm just saying that looking at the logistics, building a plant in Atlanta is not really effective for Apple. Probably tax breaks could change this balance, but I doubt you could have secrecy and tax breaks for a business of this size.

by LukaAl 11y ago

ctdonath 11y ago

Somebody is arranging to build a car factory in Atlanta. No names given yet.

arjunrc 11y ago
Do you have a source to this? I haven't seen any news regarding this in any of the auto websites or related sub-reddits
- OopsCriticality 11y ago
  http://faradayfuture.com/press/20151105.html http://faradayfuture.com/press/20151105.html
LukaAl 11y ago
That's an interesting news but I don't think it will be Apple. Car manufacturing requires volume to be efficient (like any mass produced product, ça va sans dire). But it is also extremely expensive to ship compare to their retail price (you could put approximately two car in a full size container but 44k iPhones, do the math). Let's try to do the Apple's strategy. Apple could go for the Luxury market (BMW series 7, Maseratis and upper). The price, and more important, the margin you have, is high enough to make the transportation cost low enough. At the same time you don't have enough volume to have multiple factory. In this situation you build just one factory. Atlanta is an interesting spot due to it's good connections with the rest of the US and it's comparatively low labor cost (to the Bay Area). But it is on the east coast while it is probable an Apple Car in this price range will have more buyer on the West Coast. Plus in car manufacturing labor cost is a small factor (especially in the luxury segment). But staying close to the hq is a very important factor, especially for your first model. Plus, if you are planning to source component from Asia (electric motors, chips, batteries) being close to a port like LA or San Francisco could be a benefit. Let's make the hypothesis that Apple is going for a relatively mass market instead (affordable premium, a BMW series 3, but the reasoning holds also for cheap subcompact). Apple probably needs more than one production plant if it plans to launch internationally, but a single plant is enough for the US market and the reasoning before still holds. Actually, in this scenario Apple needs to work out faster the productions issue so being closer to home is beneficial. This obviously is true if you think Apple will produce the car. But it doesn't make sense based on their production philosophy, and it will be a massive investment when there are "white label" car manufacture ready to be the Foxconn of Apple Car. The first name I could came up is Magna Steyr but if they go for low volume super luxury there are a bunch of small manufacturer in Italy with a good pedigree (Touring, Bertone) with the know how, the production capacity, and the brand that fits Apple needs. I'm not saying you are wrong, even if my bet for the plant in Atlanta is for a European Automaker, I'm just saying that looking at the logistics, building a plant in Atlanta is not really effective for Apple. Probably tax breaks could change this balance, but I doubt you could have secrecy and tax breaks for a business of this size.