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How Apple Scaled Back Its Titanic Plan to Take on Detroit

127 points by _davidturnbull 10y ago

rdlecler1 10y ago
Making cars, while a hard problem, isn't as hard as making cars self driving. Seems sensible to master the second first.
- oddevan 10y ago
  Agreed. Making a "dumb" electric car meant going against Tesla that is already making strides toward autonomy. Making a fully autonomous car meant solving new problems that could make-or-break the project. So yeah, Apple's smart to see if they can even make an autonomous system before trying to make their own car. Make sure all the problems are solvable before trying to solve them.
- RubenSandwich 10y ago
  Agreed. Let's pretend that Apple released a car two years from now, that in true Apple fashion is highly polished, but does not include some sort of self driving functionality while their competitors do. I doubt in that scenario that Apple's car efforts would fare well as self driving is going to change the way we think about cars.
  - sangnoir 10y ago
    They could license Google's driving tech: Google is open to partnership. The first iPhone proved that Apple hardware and Google software can be a winning combination.
- evo_9 10y ago
  Not only that but it positions them better. If they were to develop the defacto standard in autonomous driving systems they could then license it to anyone they want, use it in their own offering and even use the technology in other markets such as robotics.
  - molmalo 10y ago
    That sounds more like Google or Microsoft, than Apple...
- bitsoda 10y ago
  Agreed, but do we even trust Apple to nail down autonomous software when Siri and anything cloud, mapping, or machine learning-related is always a few steps behind Google's offerings?
- ArkyBeagle 10y ago
  Yeah, because partners. But Jim Lentz of Toyota America was on Charlie Rose last week - they see self-driving cars as an initial skirmish into the larger AI market. They want the whole enchilada, not just a licensing partner.
PhoenixWright 10y ago
A couple of takeaways from this article: Apple has a problem with leadership. When managers aren't buying into a vision, mostly because it's murky at best, that is a big problem. SV hubris believing you can go into any industry and disrupt the incompetent incumbents is laughable. FB found this out with phones and it sounds like Apple and Google are now figuring it out with cars. The Netflix idea works here too: Apple and Google have to become more like GM and BMW before GM and BMW become more like Apple and Google. GM will have an awesome electric with a better range than a Tesla Model 3 this year! If they ever figure out aesthetics and software they will win. Finally this article highlights what Musk has done at Tesla. They are the closest SV company to actually figure out manufacturing. It still remains to be seen but if they do it Tesla will be the market leader in cars.
- mikeash 10y ago
  Phones is a really weird example here, considering that the two dominant phone players are both SV companies that went into that industry and crushed the incompetent incumbents. I see no reason to think that Apple could do with cars what they did with the iPhone, but that particular example doesn't make any sense.
  - samfisher83 10y ago
    You could say the iphone was the evolution from the ipod, and I would argue samsung is quite important to the android growth.
  - csydas 10y ago
    I can name a few differences, even if I don't think it's impossible. Phones were ready for a natural complete upgrade from brick phones to smartphones. The mobile environment was there, all the network components were coming online to make it a really useful device, processors were getting to a good stage for mobile usage where it made sense to make the jump and the jump was right into what Apple already knew pretty well. The phone part of smart phones is pretty minor, quite honestly. Smartphones weren't so much an evolution of dumb phones, they were a complete redesign and replacement thereof. The technology that puts an OS in your hand just did the job of being a phone better than a brick phone did[1], and it came with a bunch of extra features that people didn't know they wanted. Cars are a little different. Fundamentally, a self-driving car is still a car with an OS attached. It's not so much just figuring out the OS part of it, it's also getting the engineering on a vehicle right, and I'm guessing with autonomous cars there's a lot you have to take into consideration when it comes to the mechanical aspects. It's not quite like the phone situation where you just replace brick phone with smart phone - a smart car is fundamentally the same as a dumb car except that you don't drive the smart car (and in some models, you do). There's a lot more to take into consideration, a much larger spectrum of rules and regulations, and honestly the car part of smart cars is pretty involved. It's not that Apple doesn't have the money to throw at car R&D, it's just it doesn't seem to make a lot of sense to do it. Again, I don't doubt they could do it, but the barrier of entry just seems higher here, and it's not as natural of a segue for Apple either. They're not just building a tiny computer with an iCar, they'd be building a car with an Apple computer. [1]I realize that many prefer the brick phones to smart phones and that smart phones are pretty bad at the phone part of being a phone, but ultimately between the myriad of communication apps available, you have more communication options available in your hand than you do with a brick phone, and more ways to do the communication thing.
hodder 10y ago
As an Apple shareholder, I am thankful Apple has shelved plans to dump billions into a cyclical, low margin, low return business.
- coldtea 10y ago
  Low margin? They wouldn't be making Yugos. Like with their laptops and such, they'd be targeting the higher end of the market. Cyclical is also great -- that's exactly what the laptop and especially the phone market are.
  - brianfitz 10y ago
    Simply targeting the higher end market doesn't tell you anything about the margins of the business. You need to know the size of each segment of the market and then what can be done to increase margins in each segment. For Tesla, they can't simply stay in the higher end of the market as they need to get greater economies of scale with more volume. Like with the Model 3, they want to move down-market so that they can make the business model work in the long term. As it stands, they only serve the high end of the market and lose money on each car they sell.
    - CardenB 10y ago
      IIRC Tesla's margins are typically higher than competitors. They only lose money on each car because the R&D budget is wrapped into that. They lose money because they're investing into scale.
      - Meegul 10y ago
        IIRC from a shareholders call, a Model S has margins from 20-30% percent, even after R&D is taken out. Tesla's losses have primarily stemmed from capital expenditures.
  - intoverflow2 10y ago
    Apple products haven't been the high end of the market for a long time, they're mass produced, mass consumed, purely disposable tech.
willvarfar 10y ago
So Apple change to the approach that Google have been taking all along?
ynniv 10y ago
It's only when Steve isn't at the helm that we hear about internal projects that have no direction. It was good while it lasted.
- kbutler 10y ago
  I think the key words here are "we hear about". It seems like the Apple Iron Curtain is getting more permeable than it used to be.
  - ynniv 10y ago
    That's exactly what I meant. A brand is based on what people know about it, and Steve's tight lipped management meant that projects that weren't yet baked didn't muddy the brand image. Now we have to wonder if Apple makes computers, phones, watches, cars, or not, or maybe they're just a bank? The lack of a unified vision drains the brand energy.
- coldtea 10y ago
  There were internal projects with no direction all the time under Steve as well. Heck there were even EXTERNAL projects with no direction, like the Apple TV (still flailing around), the Apple Cloud offerings (only got robust in the last 2 years or so, and the most touted part back then, the "office"-like iCloud apps are universally ignored), the Apple boom box, and other things besides.
  - digi_owl 10y ago
    I can't help but wonder that during both runs of Jobs at the helm, Apple was basically making products tailored for the wants of one man: Steve Jobs. Supposedly the iPod launched with a idiosyncratic equalizer, apparently tuned to Jobs tastes.
    - chipotle_coyote 10y ago
      I don't think I've heard a story about the equalizer, but I think in general you're right. It worked out that Jobs hit on products that were successful enough of the time, but "idiosyncratic" seemed to be one of his defining characteristics. A few of Jobs's products were so wildly successful that we tend to forget or gloss over the ones that, well, weren't so much. I think idiosyncratic also describes Jony Ive -- but as a pundit (possibly John Gruber?) put it on a podcast recently, Jobs was a better editor. He was good at zeroing on what made designs work rather than merely beautiful. If I have any major criticism of the post-Jobs Apple, it's that they seem to prioritize aesthetics over functionality. I know that's a knock that critics made against them long before the Tim Cook era, but I don't think it was really true until post-Forstall. (And no, I don't mean losing the headphone jack. I mean more things like the entire UX of the new Apple TV, from the beautiful user interface which makes navigating through multiple seasons of a TV show an endlessly scrolling nightmare compared to the previous model's design to the thin, elegant, ergonomically disastrous remote control. Ive seems particularly drawn to the notion that thinness and symmetry are more important than usability.)
swombat 10y ago
Apple could just buy Tesla instead, it's only $20b or so. Pocket change.
- _ph_ 10y ago
  Teslas Market cap is over $28B, and to buy it, Apple would have to pay a large premium on top of that.
denzil_correa 10y ago
It will be interesting if Tesla's "unexpected announcement" is related to this!
ChemicalWarfare 10y ago
The dilemma here is this - make your own car or partner with a manufacturer. Partnership means smaller profit margin in a very tight market. The Big 3 for example barely make any money when selling cars (as opposed to pickups) these days, so to get a reasonable margin the price would need to be jacked up... Making your own - the barrier to entry in that industry is VERY high which the article kind of alludes to talking about how it's hard to find suppliers willing to sell small batches of parts etc. There's a reason there aren't that many auto manufacturers around, and the ones that are out there aren't exactly the kinds of revenue generating machines as apples and googles of the world.
adamio 10y ago
I think Detroit and other manufactures are fearful of automation. If you ask them what the future looks like its driving assist technology. Fully automated driving kills the emotional experience that is used to sell cars.
- qeternity 10y ago
  The bigger issue is that autonomous cars make it extremely easy to massively boost utilization: driver assist still means your car sits at home, work, etc when not in use. This in turn means more cars are required by society. Autonomous cars can achieve much higher levels of utilization. This is the real reason legacy car makers don't want fully autonomous vehicles.
  - jrockway 10y ago
    Wouldn't Intel not want "the cloud" for the same reason?
    - ben_jones 10y ago
      My guess is that the cloud doesn't affect utilization that much. Auto scaling (IMO) is fickle and for the most part the same number of servers are running, in fact probably way more servers are running because their easy to provision (and then forget about).
  - geodel 10y ago
    I think autonomous vehicles will be priced taking that into consideration. It is just expectation of people that they will be priced as cars and can be deployed as profit generating asset.
  - smelterdemon 10y ago
    A car being driven all day (especially in cities, where the demand will be highest) is going to wear cars down incredibly fast. Manufacturers won't see that big of a hit if fewer people buy cars, if those people will replace it every year or two.
djyaz1200 10y ago
Apple's move into auto seems to have been about recruiting. For a brief time some of the most talented young engineers were favoring Tesla over Apple because the mission was more interesting.
- duaneb 10y ago
  Has this stopped?
  - deelowe 10y ago
    Yes. People are starting to realize how brutal it can be working for tesla.
- georgespencer 10y ago
  Just so I'm clear: you're positing that Apple affected an interest in autonomous cars so that they could get engineers away from Tesla to work at Apple [on a project which Apple didn't care about or envisage launching]?
jamesfmilne 10y ago
Good! Maybe they can get back to making some new laptops, and some desktops (Mac Pro, Mac Mini), that don't suck! We shall see what October brings.
- mwfunk 10y ago
  Blame the stock market. Once a company has a solid product line in one area that doesn't suck, every publicly traded company is under tremendous pressure to move into new markets rather than iterating on previous successes, often to the detriment of preexisting products. The stock market for tech companies rewards growth and just about nothing but growth (and punishes a lack of growth), Amazon being a perfect example. In a way, Amazon's strategy since its inception could be characterized as playing to investor expectations of growth more than running a business. Also, if you look at all the big tech companies (American ones at least) over the past 30 years, there's a recurring pattern of a company becoming preposterously successful, then spending a decade or more reaping the benefits of that success while repeatedly throwing money at the wall for different new projects to try and find something else that sticks. Meanwhile core businesses can lose focus and wither on the vine while huge piles of money and engineering talent get wasted on things that either go nowhere, or break even and fade away years later. Until the last few years, post-1995 Microsoft was a perfect example of this. If there was a product category that was significant enough to be the basis of some other company's entire business (dialup Internet access or search engines or personal finance software, for example), they would spend many years and billions of dollars creating a Microsoft version of that product, based on the idea that they could siphon growth from a known and already-proven segment of the industry. I don't think this was due to a lack of vision or incompetence, I think that that just appeared to be the most effective way to meet investors' demand for growth and new revenue sources. Google is in a similar bind. Think of how long it's been since they have effectively attained a search monopoly. They created a perpetual money machine (ads) that to this day provide the vast majority of their revenues. For 15+ years they have been expending titanic resources on trying to find a way to transition from a company that gets >= 90% of its revenue from ads, to a much larger company with many more revenue streams. They've had some great successes, but they have yet to break out of the trap of fundamentally being a company driven by ad revenue.
stcredzero 10y ago
By the end of 2015, the project was blighted by internal strife. Managers battled about the project’s direction, according to people with knowledge of the operations. “It was an incredible failure of leadership,” one of the people said. This is in stark contrast to the compartmentalization of new projects that Apple under Steve Jobs was able to accomplish with the development of the Macintosh and the iPhone. Is this evidence that Apple is unable to do that now?
- oddevan 10y ago
  Maybe. Could also be that a car project is much more complex with more opportunities for "battl[ing] about the project's direction." One manager wants to emphasize a modern cockpit, one an electric drivetrain, and one full autonomy. And a leader that understands consumer electronics well enough to navigate "an iPod, a phone, and an internet communicator" might not understand cars enough to navigate a car project the same way. Thus, we get Mansfield in to say "no, we're focusing on this first; we don't have a car without it." This would be like Jobs (or Forstall) coming in to say "we're focusing on a multi-touch OS X first; we don't have a phone without it." So, to answer your question: maybe. :)
Animats 10y ago
Did Apple ever really have a "titanic plan to take on Detroit?" There's no indication that they even built a prototype chassis. This may just be mis-reporting of autonomous vehicle R&D. Apple's strength in automatic driving should be the development of better, and better-looking, sensors. Apple does electronics and small hardware well. Those Velodyne LIDAR things are rotating kludges, look awful, and cost way too much. There are better approaches known. (I'm a fan of the Advanced Scientific Concepts LIDAR, which works great but costs too much because it's made by PhD physicists in Santa Barbara.) Existing automotive radars are dumber than they could be. Those are straightforward engineering problems that Apple could solve. Building cars is a low-margin business. If Apple became a successful car company, their stock would decline.
- bronson 10y ago
  > Building cars is a low-margin business. So is building phones.
  - Animats 10y ago
    Not for Apple.[1] Margins on iPhones are huge. [1] http://fortune.com/2016/04/04/apple-iphone-se-3/ http://fortune.com/2016/04/04/apple-iphone-se-3/
    - aetherson 10y ago
      I think that was your parent's point.
    - ArkyBeagle 10y ago
      But the cost of phones is a couple of zeros ( at least 1.x zeros ) off the cost of cars. What keeps people from buying more expensive cars is how much ( and what sort of ) financing they can qualify for.
      - OscarCunningham 10y ago
        So Apple needs to start a bank as well as a car company!
rmason 10y ago
Speaking from Michigan and not Silicon Valley I've got to wonder which auto manufacturer would buy Apple's software? All the major manufacturers have announced programs for self-driving cars except Fiat/Chrysler. They mention Ford which has stated they will be in production by 2019. Now I would suppose if Ford, GM, Mercedes, Toyoto or any of the Chinese car makers were to have their software fail Apple might be an awfully nice fallback. FYI Ford learned massively from its problems with Microsoft's Sync technology. All the engineers knew it would be a complete disaster but that news wasn't passed up to the execs. Now engineers have been brought into the process. http://www.detroitnews.com/story/business/autos/ford/2016/10/06/myford-touch-system-suit/91704242/ http://www.detroitnews.com/story/business/autos/ford/2016/10...
- Matthias247 10y ago
  Most automotive companies don't do software themselves and even don't have the skills to do it but buy it from a supplier or contractor according to their specification. At least that's the case for the infotainment domain I'm working with. So I guess those plans and concepts for self-driving technology also heavily utilize 3rd party software from suppliers who have specialized in that. In this case Apple would just replace the other supplier. Of course with the risk that the feature set and behavior of the software does not match what the OEM expects.
ArkyBeagle 10y ago
The sheer complexity of establishing a car brand is not what it used to be, but it's still something on the order of nation-state hard - I have a source who used to work an Hyundai back before the S. Korean economy crashed in the Asian Tigers mess ( he then emigrated to the US ) and the car-making experience in Korea was akin to war by his lights. Since he was also in the Korean Marines, I trust his judgement.

127 points by _davidturnbull 10y ago

Making cars, while a hard problem, isn't as hard as making cars self driving. Seems sensible to master the second first.

oddevan 10y ago
Agreed. Making a "dumb" electric car meant going against Tesla that is already making strides toward autonomy. Making a fully autonomous car meant solving new problems that could make-or-break the project. So yeah, Apple's smart to see if they can even make an autonomous system before trying to make their own car. Make sure all the problems are solvable before trying to solve them.
RubenSandwich 10y ago
Agreed. Let's pretend that Apple released a car two years from now, that in true Apple fashion is highly polished, but does not include some sort of self driving functionality while their competitors do. I doubt in that scenario that Apple's car efforts would fare well as self driving is going to change the way we think about cars.
- sangnoir 10y ago
  They could license Google's driving tech: Google is open to partnership. The first iPhone proved that Apple hardware and Google software can be a winning combination.
evo_9 10y ago
Not only that but it positions them better. If they were to develop the defacto standard in autonomous driving systems they could then license it to anyone they want, use it in their own offering and even use the technology in other markets such as robotics.
- molmalo 10y ago
  That sounds more like Google or Microsoft, than Apple...
bitsoda 10y ago
Agreed, but do we even trust Apple to nail down autonomous software when Siri and anything cloud, mapping, or machine learning-related is always a few steps behind Google's offerings?
ArkyBeagle 10y ago
Yeah, because partners. But Jim Lentz of Toyota America was on Charlie Rose last week - they see self-driving cars as an initial skirmish into the larger AI market. They want the whole enchilada, not just a licensing partner.

PhoenixWright 10y ago

A couple of takeaways from this article: Apple has a problem with leadership. When managers aren't buying into a vision, mostly because it's murky at best, that is a big problem. SV hubris believing you can go into any industry and disrupt the incompetent incumbents is laughable. FB found this out with phones and it sounds like Apple and Google are now figuring it out with cars. The Netflix idea works here too: Apple and Google have to become more like GM and BMW before GM and BMW become more like Apple and Google. GM will have an awesome electric with a better range than a Tesla Model 3 this year! If they ever figure out aesthetics and software they will win. Finally this article highlights what Musk has done at Tesla. They are the closest SV company to actually figure out manufacturing. It still remains to be seen but if they do it Tesla will be the market leader in cars.

mikeash 10y ago
Phones is a really weird example here, considering that the two dominant phone players are both SV companies that went into that industry and crushed the incompetent incumbents. I see no reason to think that Apple could do with cars what they did with the iPhone, but that particular example doesn't make any sense.
- samfisher83 10y ago
  You could say the iphone was the evolution from the ipod, and I would argue samsung is quite important to the android growth.
- csydas 10y ago
  I can name a few differences, even if I don't think it's impossible. Phones were ready for a natural complete upgrade from brick phones to smartphones. The mobile environment was there, all the network components were coming online to make it a really useful device, processors were getting to a good stage for mobile usage where it made sense to make the jump and the jump was right into what Apple already knew pretty well. The phone part of smart phones is pretty minor, quite honestly. Smartphones weren't so much an evolution of dumb phones, they were a complete redesign and replacement thereof. The technology that puts an OS in your hand just did the job of being a phone better than a brick phone did[1], and it came with a bunch of extra features that people didn't know they wanted. Cars are a little different. Fundamentally, a self-driving car is still a car with an OS attached. It's not so much just figuring out the OS part of it, it's also getting the engineering on a vehicle right, and I'm guessing with autonomous cars there's a lot you have to take into consideration when it comes to the mechanical aspects. It's not quite like the phone situation where you just replace brick phone with smart phone - a smart car is fundamentally the same as a dumb car except that you don't drive the smart car (and in some models, you do). There's a lot more to take into consideration, a much larger spectrum of rules and regulations, and honestly the car part of smart cars is pretty involved. It's not that Apple doesn't have the money to throw at car R&D, it's just it doesn't seem to make a lot of sense to do it. Again, I don't doubt they could do it, but the barrier of entry just seems higher here, and it's not as natural of a segue for Apple either. They're not just building a tiny computer with an iCar, they'd be building a car with an Apple computer. [1]I realize that many prefer the brick phones to smart phones and that smart phones are pretty bad at the phone part of being a phone, but ultimately between the myriad of communication apps available, you have more communication options available in your hand than you do with a brick phone, and more ways to do the communication thing.

hodder 10y ago

As an Apple shareholder, I am thankful Apple has shelved plans to dump billions into a cyclical, low margin, low return business.

coldtea 10y ago
Low margin? They wouldn't be making Yugos. Like with their laptops and such, they'd be targeting the higher end of the market. Cyclical is also great -- that's exactly what the laptop and especially the phone market are.
- brianfitz 10y ago
  Simply targeting the higher end market doesn't tell you anything about the margins of the business. You need to know the size of each segment of the market and then what can be done to increase margins in each segment. For Tesla, they can't simply stay in the higher end of the market as they need to get greater economies of scale with more volume. Like with the Model 3, they want to move down-market so that they can make the business model work in the long term. As it stands, they only serve the high end of the market and lose money on each car they sell.
  - CardenB 10y ago
    IIRC Tesla's margins are typically higher than competitors. They only lose money on each car because the R&D budget is wrapped into that. They lose money because they're investing into scale.
    - Meegul 10y ago
      IIRC from a shareholders call, a Model S has margins from 20-30% percent, even after R&D is taken out. Tesla's losses have primarily stemmed from capital expenditures.
- intoverflow2 10y ago
  Apple products haven't been the high end of the market for a long time, they're mass produced, mass consumed, purely disposable tech.

willvarfar 10y ago

So Apple change to the approach that Google have been taking all along?

ynniv 10y ago

It's only when Steve isn't at the helm that we hear about internal projects that have no direction. It was good while it lasted.

kbutler 10y ago
I think the key words here are "we hear about". It seems like the Apple Iron Curtain is getting more permeable than it used to be.
- ynniv 10y ago
  That's exactly what I meant. A brand is based on what people know about it, and Steve's tight lipped management meant that projects that weren't yet baked didn't muddy the brand image. Now we have to wonder if Apple makes computers, phones, watches, cars, or not, or maybe they're just a bank? The lack of a unified vision drains the brand energy.
coldtea 10y ago
There were internal projects with no direction all the time under Steve as well. Heck there were even EXTERNAL projects with no direction, like the Apple TV (still flailing around), the Apple Cloud offerings (only got robust in the last 2 years or so, and the most touted part back then, the "office"-like iCloud apps are universally ignored), the Apple boom box, and other things besides.
- digi_owl 10y ago
  I can't help but wonder that during both runs of Jobs at the helm, Apple was basically making products tailored for the wants of one man: Steve Jobs. Supposedly the iPod launched with a idiosyncratic equalizer, apparently tuned to Jobs tastes.
  - chipotle_coyote 10y ago
    I don't think I've heard a story about the equalizer, but I think in general you're right. It worked out that Jobs hit on products that were successful enough of the time, but "idiosyncratic" seemed to be one of his defining characteristics. A few of Jobs's products were so wildly successful that we tend to forget or gloss over the ones that, well, weren't so much. I think idiosyncratic also describes Jony Ive -- but as a pundit (possibly John Gruber?) put it on a podcast recently, Jobs was a better editor. He was good at zeroing on what made designs work rather than merely beautiful. If I have any major criticism of the post-Jobs Apple, it's that they seem to prioritize aesthetics over functionality. I know that's a knock that critics made against them long before the Tim Cook era, but I don't think it was really true until post-Forstall. (And no, I don't mean losing the headphone jack. I mean more things like the entire UX of the new Apple TV, from the beautiful user interface which makes navigating through multiple seasons of a TV show an endlessly scrolling nightmare compared to the previous model's design to the thin, elegant, ergonomically disastrous remote control. Ive seems particularly drawn to the notion that thinness and symmetry are more important than usability.)

swombat 10y ago

Apple could just buy Tesla instead, it's only $20b or so. Pocket change.

_ph_ 10y ago
Teslas Market cap is over $28B, and to buy it, Apple would have to pay a large premium on top of that.

denzil_correa 10y ago

It will be interesting if Tesla's "unexpected announcement" is related to this!

ChemicalWarfare 10y ago

The dilemma here is this - make your own car or partner with a manufacturer. Partnership means smaller profit margin in a very tight market. The Big 3 for example barely make any money when selling cars (as opposed to pickups) these days, so to get a reasonable margin the price would need to be jacked up... Making your own - the barrier to entry in that industry is VERY high which the article kind of alludes to talking about how it's hard to find suppliers willing to sell small batches of parts etc. There's a reason there aren't that many auto manufacturers around, and the ones that are out there aren't exactly the kinds of revenue generating machines as apples and googles of the world.

adamio 10y ago

I think Detroit and other manufactures are fearful of automation. If you ask them what the future looks like its driving assist technology. Fully automated driving kills the emotional experience that is used to sell cars.

qeternity 10y ago
The bigger issue is that autonomous cars make it extremely easy to massively boost utilization: driver assist still means your car sits at home, work, etc when not in use. This in turn means more cars are required by society. Autonomous cars can achieve much higher levels of utilization. This is the real reason legacy car makers don't want fully autonomous vehicles.
- jrockway 10y ago
  Wouldn't Intel not want "the cloud" for the same reason?
  - ben_jones 10y ago
    My guess is that the cloud doesn't affect utilization that much. Auto scaling (IMO) is fickle and for the most part the same number of servers are running, in fact probably way more servers are running because their easy to provision (and then forget about).
- geodel 10y ago
  I think autonomous vehicles will be priced taking that into consideration. It is just expectation of people that they will be priced as cars and can be deployed as profit generating asset.
- smelterdemon 10y ago
  A car being driven all day (especially in cities, where the demand will be highest) is going to wear cars down incredibly fast. Manufacturers won't see that big of a hit if fewer people buy cars, if those people will replace it every year or two.

djyaz1200 10y ago

Apple's move into auto seems to have been about recruiting. For a brief time some of the most talented young engineers were favoring Tesla over Apple because the mission was more interesting.

duaneb 10y ago
Has this stopped?
- deelowe 10y ago
  Yes. People are starting to realize how brutal it can be working for tesla.
georgespencer 10y ago
Just so I'm clear: you're positing that Apple affected an interest in autonomous cars so that they could get engineers away from Tesla to work at Apple [on a project which Apple didn't care about or envisage launching]?

jamesfmilne 10y ago

Good! Maybe they can get back to making some new laptops, and some desktops (Mac Pro, Mac Mini), that don't suck! We shall see what October brings.

mwfunk 10y ago
Blame the stock market. Once a company has a solid product line in one area that doesn't suck, every publicly traded company is under tremendous pressure to move into new markets rather than iterating on previous successes, often to the detriment of preexisting products. The stock market for tech companies rewards growth and just about nothing but growth (and punishes a lack of growth), Amazon being a perfect example. In a way, Amazon's strategy since its inception could be characterized as playing to investor expectations of growth more than running a business. Also, if you look at all the big tech companies (American ones at least) over the past 30 years, there's a recurring pattern of a company becoming preposterously successful, then spending a decade or more reaping the benefits of that success while repeatedly throwing money at the wall for different new projects to try and find something else that sticks. Meanwhile core businesses can lose focus and wither on the vine while huge piles of money and engineering talent get wasted on things that either go nowhere, or break even and fade away years later. Until the last few years, post-1995 Microsoft was a perfect example of this. If there was a product category that was significant enough to be the basis of some other company's entire business (dialup Internet access or search engines or personal finance software, for example), they would spend many years and billions of dollars creating a Microsoft version of that product, based on the idea that they could siphon growth from a known and already-proven segment of the industry. I don't think this was due to a lack of vision or incompetence, I think that that just appeared to be the most effective way to meet investors' demand for growth and new revenue sources. Google is in a similar bind. Think of how long it's been since they have effectively attained a search monopoly. They created a perpetual money machine (ads) that to this day provide the vast majority of their revenues. For 15+ years they have been expending titanic resources on trying to find a way to transition from a company that gets >= 90% of its revenue from ads, to a much larger company with many more revenue streams. They've had some great successes, but they have yet to break out of the trap of fundamentally being a company driven by ad revenue.

stcredzero 10y ago

By the end of 2015, the project was blighted by internal strife. Managers battled about the project’s direction, according to people with knowledge of the operations. “It was an incredible failure of leadership,” one of the people said. This is in stark contrast to the compartmentalization of new projects that Apple under Steve Jobs was able to accomplish with the development of the Macintosh and the iPhone. Is this evidence that Apple is unable to do that now?

oddevan 10y ago
Maybe. Could also be that a car project is much more complex with more opportunities for "battl[ing] about the project's direction." One manager wants to emphasize a modern cockpit, one an electric drivetrain, and one full autonomy. And a leader that understands consumer electronics well enough to navigate "an iPod, a phone, and an internet communicator" might not understand cars enough to navigate a car project the same way. Thus, we get Mansfield in to say "no, we're focusing on this first; we don't have a car without it." This would be like Jobs (or Forstall) coming in to say "we're focusing on a multi-touch OS X first; we don't have a phone without it." So, to answer your question: maybe. :)

Animats 10y ago

Did Apple ever really have a "titanic plan to take on Detroit?" There's no indication that they even built a prototype chassis. This may just be mis-reporting of autonomous vehicle R&D. Apple's strength in automatic driving should be the development of better, and better-looking, sensors. Apple does electronics and small hardware well. Those Velodyne LIDAR things are rotating kludges, look awful, and cost way too much. There are better approaches known. (I'm a fan of the Advanced Scientific Concepts LIDAR, which works great but costs too much because it's made by PhD physicists in Santa Barbara.) Existing automotive radars are dumber than they could be. Those are straightforward engineering problems that Apple could solve. Building cars is a low-margin business. If Apple became a successful car company, their stock would decline.

bronson 10y ago
> Building cars is a low-margin business. So is building phones.
- Animats 10y ago
  Not for Apple.[1] Margins on iPhones are huge. [1] http://fortune.com/2016/04/04/apple-iphone-se-3/ http://fortune.com/2016/04/04/apple-iphone-se-3/
  - aetherson 10y ago
    I think that was your parent's point.
  - ArkyBeagle 10y ago
    But the cost of phones is a couple of zeros ( at least 1.x zeros ) off the cost of cars. What keeps people from buying more expensive cars is how much ( and what sort of ) financing they can qualify for.
    - OscarCunningham 10y ago
      So Apple needs to start a bank as well as a car company!

rmason 10y ago

Speaking from Michigan and not Silicon Valley I've got to wonder which auto manufacturer would buy Apple's software? All the major manufacturers have announced programs for self-driving cars except Fiat/Chrysler. They mention Ford which has stated they will be in production by 2019. Now I would suppose if Ford, GM, Mercedes, Toyoto or any of the Chinese car makers were to have their software fail Apple might be an awfully nice fallback. FYI Ford learned massively from its problems with Microsoft's Sync technology. All the engineers knew it would be a complete disaster but that news wasn't passed up to the execs. Now engineers have been brought into the process. http://www.detroitnews.com/story/business/autos/ford/2016/10/06/myford-touch-system-suit/91704242/ http://www.detroitnews.com/story/business/autos/ford/2016/10...

Matthias247 10y ago
Most automotive companies don't do software themselves and even don't have the skills to do it but buy it from a supplier or contractor according to their specification. At least that's the case for the infotainment domain I'm working with. So I guess those plans and concepts for self-driving technology also heavily utilize 3rd party software from suppliers who have specialized in that. In this case Apple would just replace the other supplier. Of course with the risk that the feature set and behavior of the software does not match what the OEM expects.

ArkyBeagle 10y ago

The sheer complexity of establishing a car brand is not what it used to be, but it's still something on the order of nation-state hard - I have a source who used to work an Hyundai back before the S. Korean economy crashed in the Asian Tigers mess ( he then emigrated to the US ) and the car-making experience in Korea was akin to war by his lights. Since he was also in the Korean Marines, I trust his judgement.