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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’

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.

UncleOxidant 3y ago
> What surprises me is that it took this long to kill the product Maybe I'm misremembering, but I seem to recall that it was killed once before?
- SheinhardtWigCo 3y ago
  It’s been scaled down and then back up, never fully shut down.
- odshoifsdhfs 3y ago
  I think the Apple car has been killed maybe 10 times or more in the last decade.
- madeofpalk 3y ago
  It's been killed, restarted, scaled down, scaled up about every 9 months for the past 10 years.
  - MBCook 3y ago
    Yeah based on rumors they were on like version 12 of the program.
  - brandall10 3y ago
    Is this current news more irreversible?
    - madeofpalk 3y ago
      I expect news to say that the project has been restarted, with smaller scope, by the end of the year.
silverquiet 3y ago
> requires infrastructure, sales and after-sales support that just aren’t aligned with how Apple does business 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.
- crazygringo 3y ago
  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.
  - PheonixPharts 3y ago
    > They literally wrote the book on this I didn't realize Apple literally wrote a book on the subject. Sounds interesting, what's the title?
  - scarface_74 3y ago
    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
  - filmgirlcw 3y ago
    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.
onlyrealcuzzo 3y ago
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.
- open_ 3y ago
  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.
- jcgrillo 3y ago
  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..
  - TheOtherHobbes 3y ago
    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.
    - bluGill 3y ago
      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.
donkeykong3232 3y ago
[flagged]
fullshark 3y ago
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.
wredue 3y ago
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.
- acdha 3y ago
  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.
  - ein0p 3y ago
    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.
    - acdha 3y ago
      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.
      - FirmwareBurner 3y ago
        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?
zer00eyz 3y ago
>>> 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. 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.
- klik99 3y ago
  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.
  - throwaway11460 3y ago
    That seems wrong. My brakes work with both batteries disconnected, though I have to push very hard. Audi made in 2014.
dbbk 3y ago
Apple was never going to release a product that would inevitably kill lots of people. Absolute non-starter.
- DinaCoder99 3y ago
  Was the car supposed to have self-driving or something?
  - jayd16 3y ago
    I think the implication is that all cars kill people.
    - dbbk 3y ago
      Yes
- AJ007 3y ago
  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.
  - lotsofpulp 3y ago
    How would Apple know if the iPhone is being used by a driver, as opposed to a passenger?
    - perryizgr8 3y ago
      Isn't this obvious? Use the cameras on the front and back of the device. It's a trivial problem with Apple's sophisticated image description models.
mortenjorck 3y ago
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.
bredren 3y ago
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/jony-ive-apple-modern-car-design-is-shocking https://www.theverge.com/transportation/2015/2/16/8045625/jo...
DinaCoder99 3y ago
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.
- nerdix 3y ago
  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.
  - DinaCoder99 3y ago
    A "defensive play" would hardly involve investing in a technology with zero demonstrated value.
    - Auracle 3y ago
      It’s insane to say generative AI has zero demonstrated value. I use it every day.
- RodgerTheGreat 3y ago
  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.
calf 3y ago
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.
gambiting 3y ago
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.
- filmgirlcw 3y ago
  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.
  - JohnBooty 3y ago
    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.
ActorNightly 3y ago
>This was an idea that never made any sense to me. 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.
- itsoktocry 3y ago
  >Furthermore Tesla has proven that for a lot of people a car is simply an appliance. 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?
  - ActorNightly 3y ago
    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.
- serjester 3y ago
  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.
  - ActorNightly 3y ago
    >Cars have thousands of moving parts (even EV's) Take a car with 4 motors, 1 per wheel (which is the best arrangement). The total list of moving parts. - wheels - suspension linkage - driveshafts - brakes - pedals - windows - wipers - coolant pump - washer fluid pump - seats - frunk/trunk Thats the list of moving parts. Dunno where you got 1000 moving parts from. Most each one of those has reliable manufacturers that have figured out how to build them correctly.
bryanlarsen 3y ago
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? ...?
- x0x0 3y ago
  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.
  - bryanlarsen 3y ago
    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.
    - duped 3y ago
      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.
      - _ea1k 3y ago
        They could hire Magna to build it for them! Then again, that isn't necessarily working out perfectly well for Fisker.
        moogly 3y ago
        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.
gumby 3y ago
I agree with your entire comment but have some nuance about one point: > It’s one thing to create a new [lower-margin business], it’s another to purposefully take it on as a business line when your existing business groups prints money and have 40%+ margins. 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
kypro 3y ago
> It’s high overhead/low-margin and requires infrastructure, sales and after-sales support that just aren’t aligned with how Apple does business. 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.
hanniabu 3y ago
> It’s high overhead/low-margin 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_have_an_idea 3y ago
> Good. Also bad. From the article: > many employees on the car team — known as the Special Projects Group, or SPG — will be shifted to the artificial intelligence division 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.
- kjreact 3y ago
  > So, the people that failed to build a car, when Tesla, Xiaomi, BYD and half a dozen tech 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_have_an_idea 3y ago
    I get what you're saying, however I don't think that's true: > the goal was to reach the holy grail of a fully autonomous vehicle 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.
    - kjreact 3y ago
      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.
lumost 3y ago
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.
deleted 3y ago
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Animats 3y ago
> 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. 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.

UncleOxidant 3y ago

> What surprises me is that it took this long to kill the product Maybe I'm misremembering, but I seem to recall that it was killed once before?

SheinhardtWigCo 3y ago
It’s been scaled down and then back up, never fully shut down.
odshoifsdhfs 3y ago
I think the Apple car has been killed maybe 10 times or more in the last decade.
madeofpalk 3y ago
It's been killed, restarted, scaled down, scaled up about every 9 months for the past 10 years.
- MBCook 3y ago
  Yeah based on rumors they were on like version 12 of the program.
- brandall10 3y ago
  Is this current news more irreversible?
  - madeofpalk 3y ago
    I expect news to say that the project has been restarted, with smaller scope, by the end of the year.

silverquiet 3y ago

> requires infrastructure, sales and after-sales support that just aren’t aligned with how Apple does business 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.

crazygringo 3y ago
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.
- PheonixPharts 3y ago
  > They literally wrote the book on this I didn't realize Apple literally wrote a book on the subject. Sounds interesting, what's the title?
- scarface_74 3y ago
  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
- filmgirlcw 3y ago
  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.

onlyrealcuzzo 3y ago

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.

open_ 3y ago
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.
jcgrillo 3y ago
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..
- TheOtherHobbes 3y ago
  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.
  - bluGill 3y ago
    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.

donkeykong3232 3y ago

[flagged]

fullshark 3y ago

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.

wredue 3y ago

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.

acdha 3y ago
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.
- ein0p 3y ago
  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.
  - acdha 3y ago
    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.
    - FirmwareBurner 3y ago
      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?

zer00eyz 3y ago

>>> 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. 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.

klik99 3y ago
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.
- throwaway11460 3y ago
  That seems wrong. My brakes work with both batteries disconnected, though I have to push very hard. Audi made in 2014.

dbbk 3y ago

Apple was never going to release a product that would inevitably kill lots of people. Absolute non-starter.

DinaCoder99 3y ago
Was the car supposed to have self-driving or something?
- jayd16 3y ago
  I think the implication is that all cars kill people.
  - dbbk 3y ago
    Yes
AJ007 3y ago
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.
- lotsofpulp 3y ago
  How would Apple know if the iPhone is being used by a driver, as opposed to a passenger?
  - perryizgr8 3y ago
    Isn't this obvious? Use the cameras on the front and back of the device. It's a trivial problem with Apple's sophisticated image description models.

mortenjorck 3y ago

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.

bredren 3y ago

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/jony-ive-apple-modern-car-design-is-shocking https://www.theverge.com/transportation/2015/2/16/8045625/jo...

DinaCoder99 3y ago

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.

nerdix 3y ago
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.
- DinaCoder99 3y ago
  A "defensive play" would hardly involve investing in a technology with zero demonstrated value.
  - Auracle 3y ago
    It’s insane to say generative AI has zero demonstrated value. I use it every day.
RodgerTheGreat 3y ago
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.

calf 3y ago

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.

gambiting 3y ago

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.

filmgirlcw 3y ago
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.
- JohnBooty 3y ago
  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.

ActorNightly 3y ago

>This was an idea that never made any sense to me. 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.

itsoktocry 3y ago
>Furthermore Tesla has proven that for a lot of people a car is simply an appliance. 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?
- ActorNightly 3y ago
  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.
serjester 3y ago
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.
- ActorNightly 3y ago
  >Cars have thousands of moving parts (even EV's) Take a car with 4 motors, 1 per wheel (which is the best arrangement). The total list of moving parts. - wheels - suspension linkage - driveshafts - brakes - pedals - windows - wipers - coolant pump - washer fluid pump - seats - frunk/trunk Thats the list of moving parts. Dunno where you got 1000 moving parts from. Most each one of those has reliable manufacturers that have figured out how to build them correctly.

bryanlarsen 3y ago

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? ...?

x0x0 3y ago
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.
- bryanlarsen 3y ago
  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.
  - duped 3y ago
    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.
    - _ea1k 3y ago
      They could hire Magna to build it for them! Then again, that isn't necessarily working out perfectly well for Fisker.
      - moogly 3y ago
        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.

gumby 3y ago

I agree with your entire comment but have some nuance about one point: > It’s one thing to create a new [lower-margin business], it’s another to purposefully take it on as a business line when your existing business groups prints money and have 40%+ margins. 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

kypro 3y ago

> It’s high overhead/low-margin and requires infrastructure, sales and after-sales support that just aren’t aligned with how Apple does business. 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.

hanniabu 3y ago

> It’s high overhead/low-margin 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_have_an_idea 3y ago

> Good. Also bad. From the article: > many employees on the car team — known as the Special Projects Group, or SPG — will be shifted to the artificial intelligence division 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.

kjreact 3y ago
> So, the people that failed to build a car, when Tesla, Xiaomi, BYD and half a dozen tech 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_have_an_idea 3y ago
  I get what you're saying, however I don't think that's true: > the goal was to reach the holy grail of a fully autonomous vehicle 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.
  - kjreact 3y ago
    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.

lumost 3y ago

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.

deleted 3y ago

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Animats 3y ago

> 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. 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.