4 ms·

Do cars count as hardware? People spend a lot on those.

chubot 6y ago
Well, there seems to be a clear downward trend in car purchasing, if you look at demographics (e.g. the move from suburbs back to cities) Renting a service + car together via rideshare does have some fundamental economic efficiencies (depending on where you live, and other aspects the situation)
jayd16 6y ago
Its about the margin though isn't it? They cost a lot to buy but they also cost a lot to make. How much value can Apple and Microsoft extract from you over the lifetime of a single car.
- mywittyname 6y ago
  > How much value can Apple and Microsoft extract from you over the lifetime of a single car. Probably less than Toyota has extracted from me in my lifetime already. Cars are lower margin, but they are expensive in absolute dollars, and their purchase almost always involves leverage. A $35,000 car will typically earn the manufacture $3-7k in direct profits, the financing arm gets ~$1800, the dealership gets ~$600 (plus profits from extended warranties, service, etc). There's still a ton of money to be made in automobile manufacturing. And that's for an average car (actually, below average, the median new car price is nearly $40k). Vehicles like Porsches or an F-150s have insanely high margins. Porsche has the highest margins in the industry (50% for the 911) by a comfortable amount and Ford reports the percentage of F-150s sold for over $50k in their annual reports, and have for years, because it's the most critical aspect of their bottom line. Tech companies benefit from having really dispersed revenue streams: they make a few dollars off of billions of people while car companies make thousands of dollars off of a few million people.
  - blackrock 6y ago
    Cars are a consumable product. They only last about 10 years. Before you get bored of it and buy a new one. Or before it breaks down so often, that you must buy a new car. Software, like Microsoft Office, is also consumable, in the sense that your computer burns out, or Microsoft makes its operating system end-of-life after 5 years. This forces you to buy a new license. So if Toyota makes $3,000 in profit per car. And you replace your car in 10 years, then this is $300/year. Or about $25/month in profits to Toyota. If it’s $7,000, then the monthly profits goes up to $58/month for Toyota. So it’s the equivalent to a Netflix or Cable TV subscription for Toyota. But with the entrenched benefit that being a car manufacturer is big business, and there aren’t that many players in it. What Toyota did was to make perfect, their vehicles, that they have such a loyal following. That their customers go back to them for every new car, decade after decade. And plus, they make more money from their luxury brand, Lexus, and from their trucks.
Darmody 6y ago
That depends on how you look at it. But it doesn't matter. A car costs a lot, yes, but the margin is not that big. You can't build a car and send the same unit to every buyer. While I can code once and sell the software to a million clients. Tesla is the most valuable car company in the world and I think it has a lot to do with the software, not only the hardware.
freehunter 6y ago
People spend a small amount of money on the hardware of a car, then spend a lot of money on the luxurious comfort and prestige upgrades. Boston Dynamics makes utility robots that are cool from an engineering standpoint but not super useful (or even welcome) in someone's home. Hyundai makes a lot of sense, since these expensive-but-handy robots will fit in well with their other industrial robots and military equipment.
blackrock 6y ago
Maybe someone should make a company to turn cars to vehicle-as-a-service? VAAS The first company to do this will own the market. I think Tesla was trying to achieve this.
- mandelbrotwurst 6y ago
  You're describing leases.
  - blackrock 6y ago
    No, not leases. You’d have to maintain the car yourself. I’m describing more of a robotic Uber/Lyft, with Level 5 autonomous driving. But not Uber, the company itself. Since we know they’re retarded, and wrote autonomous driving software that ran over a human. So we can’t trust them.

Well, there seems to be a clear downward trend in car purchasing, if you look at demographics (e.g. the move from suburbs back to cities) Renting a service + car together via rideshare does have some fundamental economic efficiencies (depending on where you live, and other aspects the situation)

jayd16 6y ago

Its about the margin though isn't it? They cost a lot to buy but they also cost a lot to make. How much value can Apple and Microsoft extract from you over the lifetime of a single car.

mywittyname 6y ago
> How much value can Apple and Microsoft extract from you over the lifetime of a single car. Probably less than Toyota has extracted from me in my lifetime already. Cars are lower margin, but they are expensive in absolute dollars, and their purchase almost always involves leverage. A $35,000 car will typically earn the manufacture $3-7k in direct profits, the financing arm gets ~$1800, the dealership gets ~$600 (plus profits from extended warranties, service, etc). There's still a ton of money to be made in automobile manufacturing. And that's for an average car (actually, below average, the median new car price is nearly $40k). Vehicles like Porsches or an F-150s have insanely high margins. Porsche has the highest margins in the industry (50% for the 911) by a comfortable amount and Ford reports the percentage of F-150s sold for over $50k in their annual reports, and have for years, because it's the most critical aspect of their bottom line. Tech companies benefit from having really dispersed revenue streams: they make a few dollars off of billions of people while car companies make thousands of dollars off of a few million people.
- blackrock 6y ago
  Cars are a consumable product. They only last about 10 years. Before you get bored of it and buy a new one. Or before it breaks down so often, that you must buy a new car. Software, like Microsoft Office, is also consumable, in the sense that your computer burns out, or Microsoft makes its operating system end-of-life after 5 years. This forces you to buy a new license. So if Toyota makes $3,000 in profit per car. And you replace your car in 10 years, then this is $300/year. Or about $25/month in profits to Toyota. If it’s $7,000, then the monthly profits goes up to $58/month for Toyota. So it’s the equivalent to a Netflix or Cable TV subscription for Toyota. But with the entrenched benefit that being a car manufacturer is big business, and there aren’t that many players in it. What Toyota did was to make perfect, their vehicles, that they have such a loyal following. That their customers go back to them for every new car, decade after decade. And plus, they make more money from their luxury brand, Lexus, and from their trucks.

Darmody 6y ago

That depends on how you look at it. But it doesn't matter. A car costs a lot, yes, but the margin is not that big. You can't build a car and send the same unit to every buyer. While I can code once and sell the software to a million clients. Tesla is the most valuable car company in the world and I think it has a lot to do with the software, not only the hardware.

freehunter 6y ago

People spend a small amount of money on the hardware of a car, then spend a lot of money on the luxurious comfort and prestige upgrades. Boston Dynamics makes utility robots that are cool from an engineering standpoint but not super useful (or even welcome) in someone's home. Hyundai makes a lot of sense, since these expensive-but-handy robots will fit in well with their other industrial robots and military equipment.

blackrock 6y ago

Maybe someone should make a company to turn cars to vehicle-as-a-service? VAAS The first company to do this will own the market. I think Tesla was trying to achieve this.

mandelbrotwurst 6y ago
You're describing leases.
- blackrock 6y ago
  No, not leases. You’d have to maintain the car yourself. I’m describing more of a robotic Uber/Lyft, with Level 5 autonomous driving. But not Uber, the company itself. Since we know they’re retarded, and wrote autonomous driving software that ran over a human. So we can’t trust them.