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Starting from scratch is such a monumental feat. Why wouldn't Apple just use it's cash reserves and buy out an existing car maker? They could literally buy pret

Starting from scratch is such a monumental feat. Why wouldn't Apple just use it's cash reserves and buy out an existing car maker? They could literally buy pretty much any automaker they want, why not start with something like Fiat Chrysler, for a bargain basement price of $10B? I'm a supply chain guy. I work for a company with one of the top peer-rated supply chains in the world and Apple is still so far ahead of us that it isn't even funny. Apple could, with minimal comparative effort (as in, easier than any other company, not easily), translate their manufacturing supply chain knowledge towards automotive manufacturing and optimize it to the point of absurd superiority over every other automaker out there. That alone could change the profitability of the company significantly toward self-sustainability within a matter of a 3-4 years. Throw in a well funded software and hardware research division, poach the top specialized auto manufacturing talent, and you have a recipe for the next Toyota or (forgive the faux pas) VW. But if you start from scratch, you are going to be 10 years away from making a dent in the market, regardless of how much expertise you have.

primrosepath 11y ago
Because the auto companies are far, far behind on software and, now in comparison to Tesla, hardware. I was told by a GM employee in their tech center in Warren, they have COBOL running in VMs on modern servers whose terminal screens get scraped into excel spread sheets. This is one of many examples I could give you. I could literally spend hours telling you the horror stories. It's government levels of inefficiencies and leadership has little or no visibility into the system. Everyone in Metro-Detroit knows of the problems in the auto industry. The leadership lacks vision and workers find their niche and retire hoping to do the same things with maybe a promotion to management. There is not a constant drive, at least in the software side of things, to constantly improve and learn like in there is in Silicon Valley. The above is applicable to GM and Ford. Chrysler, on the other hand, is a whole other level of screwed. There's a reason they've been bailed out 2 times by the government and now bought/merged by a foreign car company, AGAIN. Apple, Google, Tesla and Uber will crush all but a few existing automakers, around the globe, and leadership has just now come around to acknowledging the threat. The regular Metro-Detroiter has no idea.
- saosebastiao 11y ago
  > Because the auto companies are far, far behind on software and, now in comparison to Tesla, hardware. It's a good thing that Apple is a software company. > Apple, Google, Tesla and Uber will crush all but a few existing automakers, around the globe, and leadership has just now come around to acknowledging the threat. The regular Metro-Detroiter has no idea. Of those four, only Tesla has actually produced cars that can be sold to the general public. Tesla is a 13 year old company. It has well known reliability problems, and it is supported by a luxury-only price point and market. It's market share is sub 1%. That is exactly my point. Apple could, if they wanted, start from scratch and it will take 10 years absolute minimum before they are even remotely relevant. Or they could buy an existing car manufacturer with actual market share, and in the course of 2-3 years make it extremely profitable, and in 3-5 years make it into something Apple would be willing to put their logo on. Starting from scratch might be reasonable when you are talking software, but building an automotive company takes decades. It doesn't even have to be Fiat Chrysler or domestic for that matter...any existing automaker with more than 20 years experience could be on the table when you have $200B in cash on hand. They could buy BMW for ~$50B or Daimler for ~$70B. Hell, they could buy Toyota at ~$175B.
  - primrosepath 11y ago
    > Apple could, if they wanted, start from scratch and it will take 10 years absolute minimum > but building an automotive company takes decades > Tesla is a 13 year old company. Like you said, Apple has $200 billion. That can buy some speed but Apple doesn't have to rush. Tesla did. From Tesla's founding to the first Model S being delivered took 9 years and they did it with under a billion dollars. They also spent time proving electric cars were viable with the Roadster and secure more funding. Apple doesn't need to take this first step. So a crappy guess would be 5-7 years to make a car. This is not worth the risk of spending $40-70 billion, especially when you can get away with spending $2 billion and get better results than Tesla. My main point was the auto companies are so bogged down with legacy (legacy software, legacy manufacturing, legacy thinking, legacy costs, legacy habits, legacy dealerships) that starting from scratch is the better option, even if it does take 10 years. > and in the course of 2-3 years make it extremely profitable, and in 3-5 years make it into something Apple would be willing to put their logo on. What your suggesting is, essentially, to unravel 50-60 years of legacy. People have tried and failed. This isn't just a company like GM, a massive institution in its own right, it's all the 3rd party suppliers. I think you're underestimating the work required, even if you assume no worker revolts. I also don't think Apple wants to manage or take on the liability of car divisions from around the world.

primrosepath 11y ago

Because the auto companies are far, far behind on software and, now in comparison to Tesla, hardware. I was told by a GM employee in their tech center in Warren, they have COBOL running in VMs on modern servers whose terminal screens get scraped into excel spread sheets. This is one of many examples I could give you. I could literally spend hours telling you the horror stories. It's government levels of inefficiencies and leadership has little or no visibility into the system. Everyone in Metro-Detroit knows of the problems in the auto industry. The leadership lacks vision and workers find their niche and retire hoping to do the same things with maybe a promotion to management. There is not a constant drive, at least in the software side of things, to constantly improve and learn like in there is in Silicon Valley. The above is applicable to GM and Ford. Chrysler, on the other hand, is a whole other level of screwed. There's a reason they've been bailed out 2 times by the government and now bought/merged by a foreign car company, AGAIN. Apple, Google, Tesla and Uber will crush all but a few existing automakers, around the globe, and leadership has just now come around to acknowledging the threat. The regular Metro-Detroiter has no idea.

saosebastiao 11y ago
> Because the auto companies are far, far behind on software and, now in comparison to Tesla, hardware. It's a good thing that Apple is a software company. > Apple, Google, Tesla and Uber will crush all but a few existing automakers, around the globe, and leadership has just now come around to acknowledging the threat. The regular Metro-Detroiter has no idea. Of those four, only Tesla has actually produced cars that can be sold to the general public. Tesla is a 13 year old company. It has well known reliability problems, and it is supported by a luxury-only price point and market. It's market share is sub 1%. That is exactly my point. Apple could, if they wanted, start from scratch and it will take 10 years absolute minimum before they are even remotely relevant. Or they could buy an existing car manufacturer with actual market share, and in the course of 2-3 years make it extremely profitable, and in 3-5 years make it into something Apple would be willing to put their logo on. Starting from scratch might be reasonable when you are talking software, but building an automotive company takes decades. It doesn't even have to be Fiat Chrysler or domestic for that matter...any existing automaker with more than 20 years experience could be on the table when you have $200B in cash on hand. They could buy BMW for ~$50B or Daimler for ~$70B. Hell, they could buy Toyota at ~$175B.
- primrosepath 11y ago
  > Apple could, if they wanted, start from scratch and it will take 10 years absolute minimum > but building an automotive company takes decades > Tesla is a 13 year old company. Like you said, Apple has $200 billion. That can buy some speed but Apple doesn't have to rush. Tesla did. From Tesla's founding to the first Model S being delivered took 9 years and they did it with under a billion dollars. They also spent time proving electric cars were viable with the Roadster and secure more funding. Apple doesn't need to take this first step. So a crappy guess would be 5-7 years to make a car. This is not worth the risk of spending $40-70 billion, especially when you can get away with spending $2 billion and get better results than Tesla. My main point was the auto companies are so bogged down with legacy (legacy software, legacy manufacturing, legacy thinking, legacy costs, legacy habits, legacy dealerships) that starting from scratch is the better option, even if it does take 10 years. > and in the course of 2-3 years make it extremely profitable, and in 3-5 years make it into something Apple would be willing to put their logo on. What your suggesting is, essentially, to unravel 50-60 years of legacy. People have tried and failed. This isn't just a company like GM, a massive institution in its own right, it's all the 3rd party suppliers. I think you're underestimating the work required, even if you assume no worker revolts. I also don't think Apple wants to manage or take on the liability of car divisions from around the world.