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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

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.
nradov 3y ago
Ferrari's value is driven more by merchandising than by car sales. Even if a hypothetical Apple car did well, that wouldn't drive billions in sales of Apple branded jackets, hats, luggage, shot glasses, etc.
- spaceguillotine 3y ago
  Ironically this was something Apple used to be good at but they killed off all the fun things with apple branding on them, now all you get is two campus exclusive shirt designs. I'd love some retro apple "lifestyle" gear, throwback porsche racing jacket would be clutch right now with the yoots
  - vineyardmike 3y ago
    I never understood why each of the flagship Apple stores don’t have custom merch. I’ll admit that I’ve stopped at plenty of Apple stores while traveling, simply because they’re nearby. They’re usually in very nice locations for tourists (5th av, grand central station, etc) and I can totally see them dramatically improving brand appeal and catering to fanboys with localized tee shirts or Apple Watch bands or polishing cloths or any number of other gimmicks. Oh and their retro stuff would sell out in an instant. Their 80s stuff was cool.
    - selimthegrim 3y ago
      I would totally buy a (corrected!) Apple Pascal T shirt after the poster.
- rasz 3y ago
  >more by merchandising than by car sales That was the case until SUV release. Ferrari announced plans to limit SUV sales, but that wont last in light of what Lamborghini is doing.
jakeinspace 3y ago
I’m guessing that most of Ferrari’s market value comes from the brand compared to future revenue or IP. Apple is just not that elite of a brand, I don’t see how selling million-dollar vehicles would significantly change their brand (assuming an Apple logo hood ornament).
- bigstrat2003 3y ago
  Aren't they? Their entire business is pretty much based on brand. Apple products aren't actually better than the competition (often they are worse, like the iPhone not letting you install apps outside the app store). But it doesn't matter because people think Apple is cool. I don't see why that wouldn't translate to cars.
  - rescbr 3y ago
    61% marketshare for phones in the US doesn't sound like a luxury brand to me. They might position themselves as an aspirational brand outside the US, and by keeping retail prices close to the same as in the US, no matter the local purchasing power, I can see how they can be perceived as an upscale brand in some markets.
    - boznz 3y ago
      A luxury car is different to a "luxury" phone, you are fighting for share at the top 10% of the market.
  - eastbound 3y ago
    I love how Apple haters don’t understand the phenomenon. Look, I bought Sony headphones, some reference like xixikxixkklkxwx. I now have tinitus. Everyone tells me it’s because I didn’t buy the xixikxixkklkxwii, which were obviously better. The entire PC market is like this. Intel sells i7, but it’s not the same as the i7 of 20 years ago. LG sells screens where you have 90% chances of buying shit and get told “Well they do make good screens, you should have bought the other reference. What did you expect. You noob.” The entire Android market is like this. You buy Samsung and you get OEM preinstalled shit. “Yeah everyone knows you should gave bought the Pixel, not the Samsung.” So now, instead of buying things twice because the one was shit, I just buy Apple. I don’t buy “the iPhone”. I buy “iPhone”. It could be 99% more expensive, it’s still less than buying things twice.
filmgirlcw 3y ago
But I guess my question is, why would you bother with only making 4,000 cars a year, if you’re Apple? Especially if the initial cost of making that $100b market cap (which a solid iPhone quarter alone will net you) is more than $100b (not accounting for R&D tax rules fuckery because I’m not versed enough in how all that works and what the current rules are) on development work. I have similar concerns about the Apple Vision Pro, given its small yields and current high ASP/muted demand, but at least there you can see the vision (pun unavoidable) of how it could eventually be an iPad-sized business or greater. A car only works if you do go after Tesla and Mercedes and BMW, etc. I just don’t see any reason Apple would enter any business if not to take it on as a mass market player. Selling a $10,000 variant of a $500 watch is one thing (and that strategy failed, for what it’s worth), selling a low quantity machine that you still have to maintain and support that isn’t part of your core competency as a company is something else entirely.
matwood 3y ago
But Apple's M.O. is Toyota volume with Ferrari margins. No way would they be happy selling 4k of anything. And Apple's required margins is why I never thought they would release a car - there isn't enough money in it.

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.

nradov 3y ago

Ferrari's value is driven more by merchandising than by car sales. Even if a hypothetical Apple car did well, that wouldn't drive billions in sales of Apple branded jackets, hats, luggage, shot glasses, etc.

spaceguillotine 3y ago
Ironically this was something Apple used to be good at but they killed off all the fun things with apple branding on them, now all you get is two campus exclusive shirt designs. I'd love some retro apple "lifestyle" gear, throwback porsche racing jacket would be clutch right now with the yoots
- vineyardmike 3y ago
  I never understood why each of the flagship Apple stores don’t have custom merch. I’ll admit that I’ve stopped at plenty of Apple stores while traveling, simply because they’re nearby. They’re usually in very nice locations for tourists (5th av, grand central station, etc) and I can totally see them dramatically improving brand appeal and catering to fanboys with localized tee shirts or Apple Watch bands or polishing cloths or any number of other gimmicks. Oh and their retro stuff would sell out in an instant. Their 80s stuff was cool.
  - selimthegrim 3y ago
    I would totally buy a (corrected!) Apple Pascal T shirt after the poster.
rasz 3y ago
>more by merchandising than by car sales That was the case until SUV release. Ferrari announced plans to limit SUV sales, but that wont last in light of what Lamborghini is doing.

jakeinspace 3y ago

I’m guessing that most of Ferrari’s market value comes from the brand compared to future revenue or IP. Apple is just not that elite of a brand, I don’t see how selling million-dollar vehicles would significantly change their brand (assuming an Apple logo hood ornament).

bigstrat2003 3y ago
Aren't they? Their entire business is pretty much based on brand. Apple products aren't actually better than the competition (often they are worse, like the iPhone not letting you install apps outside the app store). But it doesn't matter because people think Apple is cool. I don't see why that wouldn't translate to cars.
- rescbr 3y ago
  61% marketshare for phones in the US doesn't sound like a luxury brand to me. They might position themselves as an aspirational brand outside the US, and by keeping retail prices close to the same as in the US, no matter the local purchasing power, I can see how they can be perceived as an upscale brand in some markets.
  - boznz 3y ago
    A luxury car is different to a "luxury" phone, you are fighting for share at the top 10% of the market.
- eastbound 3y ago
  I love how Apple haters don’t understand the phenomenon. Look, I bought Sony headphones, some reference like xixikxixkklkxwx. I now have tinitus. Everyone tells me it’s because I didn’t buy the xixikxixkklkxwii, which were obviously better. The entire PC market is like this. Intel sells i7, but it’s not the same as the i7 of 20 years ago. LG sells screens where you have 90% chances of buying shit and get told “Well they do make good screens, you should have bought the other reference. What did you expect. You noob.” The entire Android market is like this. You buy Samsung and you get OEM preinstalled shit. “Yeah everyone knows you should gave bought the Pixel, not the Samsung.” So now, instead of buying things twice because the one was shit, I just buy Apple. I don’t buy “the iPhone”. I buy “iPhone”. It could be 99% more expensive, it’s still less than buying things twice.

filmgirlcw 3y ago

But I guess my question is, why would you bother with only making 4,000 cars a year, if you’re Apple? Especially if the initial cost of making that $100b market cap (which a solid iPhone quarter alone will net you) is more than $100b (not accounting for R&D tax rules fuckery because I’m not versed enough in how all that works and what the current rules are) on development work. I have similar concerns about the Apple Vision Pro, given its small yields and current high ASP/muted demand, but at least there you can see the vision (pun unavoidable) of how it could eventually be an iPad-sized business or greater. A car only works if you do go after Tesla and Mercedes and BMW, etc. I just don’t see any reason Apple would enter any business if not to take it on as a mass market player. Selling a $10,000 variant of a $500 watch is one thing (and that strategy failed, for what it’s worth), selling a low quantity machine that you still have to maintain and support that isn’t part of your core competency as a company is something else entirely.

matwood 3y ago

But Apple's M.O. is Toyota volume with Ferrari margins. No way would they be happy selling 4k of anything. And Apple's required margins is why I never thought they would release a car - there isn't enough money in it.