[TheOtherHobbes]

Cars are a terrible industry to get into. Building cars is massively capital and plant intensive, heavily dependent on supply chain logistics, and the market is already extremely competitive. The entire industry is well on its way to switching to electric and/or self-driving.

Selling cars requires a huge dealer network rollout with huge up-front costs for training and spares. Doing it DIY would be insanely expensive, and persuading existing dealers to sign up for a franchise is going to be a tough sell considering Apple's historical treatment of resellers.

Apple under Jobs certainly had the imagination to make a good phone - but the phone industry was always fairly crappy, with very clever internals but mediocre UX.

I don't see much reason to think that Apple under Cook has the imagination to break open the car industry in the same way. The possible competitive differentials are much smaller, and Cook isn't the most creative CEO Apple has had.

If the USP is that Car is electric, looks pretty, and may eventually have some self-driving features - that won't be anywhere close to enough. It's going to need to have some wow to get taken seriously, and even if Jobs were alive and in charge there's limited wow space available.

Of course if it flies and/or teleports, that would be something else.

[simonh]

The car industry is about to go through two completely independent revolutions simultaneously. The move to electric power trains, and self-driving. This is the perfect time for an outsider to enter the market because the incumbents have no advantage in these fields relative to a newcomer. In fact as fundamentally hardware companies they have the same issues with figuring out how to develop first class software that the phone companies did.

Apple has huge expertise in both these areas. Not electric motors sure, but electronics design and manufacturing in general and specifically battery technology on the power train side and software on the self-driving side.

But the key to their potential is software. I think the main reason for Apple's success is their super high quality OS core, code libraries and software development tool chain combined with one of the greatest software engineering culture and talent pools on the planet. They have exploited this advantage ruthlessly ever since the 90s. It underlies the success of all their best products - even the iPod if you bear in mind that iTunes was built on these core advantages. Yes iTunes is a mess now, but it made the success of the iPod possible.

The key to success in the coming car revolution will be software. Computers will control and orchestrate every aspect of the internal operation of the vehicle, and that's before you even get to external operations with self-driving. Only Microsoft has the depth of software development competence and the technology platform resources to compete with Apple in this area, but for whatever reason they just don't seem to be able to get their act together when it comes to engineering complete product stacks rather than individual technologies.

[rgbrenner]

the incumbents have no advantage in these fields relative to a newcomer.

Except their distribution network, reputation/brand value, and marketing reach. And their IP in the non-powertrain components. And their manufacturing knowledge which makes the cars more reliable.

And they can fund the move to electric (or whatever) using existing profits. Whereas any newcomer has to raise money and spend time doing all of these things.

While this is probably the best time for someone to attempt to do those things.. the incumbents definitely aren't starting from scratch.. they still have advantages.

[splouk]

Except Apple would already have reputation/brand value as well. Perhaps even more than, say Ford, since they are known as a technology company, and the cars of the future are electric and self-driving.

[simonh]

You are absolutely correct, it will be a tough challenge, but if anyone is ever going to it, it's now.

[kamaal]

>>specifically battery technology on the power train side and software on the self-driving side.

Neither actually.

Battery technology for cars is a very different area of work compared to making battery for phones.

And writing self driving car algorithms isn't exactly the same designing UI on the FreeBSD OS.

[mcphage]

> Cars are a terrible industry to get into. Building cars is massively capital and plant intensive, heavily dependent on supply chain logistics, and the market is already extremely competitive.

That sounds perfect for Apple, though—they've got tons of capital, excellent at supply chain logistics, and used to thriving in very competitive markets.

[WalterBright]

Many car startups have been ground to pieces due to it costing more than their investors ever imagined - Tucker, Bricklin, Delorean, etc.

[ianferrel]

How many of those car startups had the largest market cap in the world before they started making cars?

[givinguflac]

Pretty much everything you just said could have car replaced by the word phone, and you'd sound just like MS BB or Nokia in 2007. "Clever internals but crappy ux" describes pretty much every car ever. Regarding dealerships, ever heard of Tesla? It's definitely possible to diy, and Tesla has nothing compared to Apple's resources.

[forgetsusername]

>Regarding dealerships, ever heard of Tesla?

Tesla is trying this model, but I don't know whether anyone can makes claims as to its success yet. Right now they're pretty low volume and are losing lots of money. Maybe the no dealer model scales, maybe it doesn't.

[Retric]

Tesla has 325,000+ pre-orders for the model 3 a 35,000$ car.

For comparison Acura only sold 167,843 units in 2014 and they have some models for ~10,000$ less.* And they have an extensive dealer network. Honda their parent brand sells well under 2 million cars a year and is a major automaker.

*List price on a new ILX is 27,990 but this assumes people are paying sticker price.

[coredog64]

At Tesla's current projections, it will take close to 3 years to fill those pre-orders. That's been pretty well understood for a while, so perhaps that had something to do with the number of deposits placed.

Besides, those pre-orders are refundable $1K deposits, not someone who has put down $30K right now for delivery 2 years hence.

[dragonwriter]

Acura is the luxury mark of Honda; it doesn't need to operate at a scale that would make it viable as an independent business.

[dpcx]

Tesla also doesn't have quite the clout that Apple does. Apple could literally bully their way in to the self-sales car market...

[obsurveyor]

They'd still be facing the same dealer and local legislative roadblocks that Tesla has been triggering states to create or enforce since they started and they can't just bully through that. It will require lobbying, time and possibly new legislation, none of which is fast.

Having Tesla front-run a lot of this stuff is pretty smart if they are intending to go that route though.

[scarface74]

Imagine the Apple talking point. "We want to sell you this car but government protectionist regulation won't allow us". And they do that in every state, starting with the most wealthy, most liberal states and move slowly to the less affluent states. Apple has a lot more die-hard fans than Tesla. Just compare the number of people who have Apple products compared to Teslas. y

[mosdave]

> "Clever internals but crappy ux" describes pretty much every car ever.

My '69 Chevelle disagrees.

[groby_b]

So the best company to get into the car space, if any were to try it:

* would have lots of spare capital * would have experience building/running plants * would know how to manage a long supply chain extremely well * carries huge cachet, allowing them to stand out in a competitive market. * Is not afraid to exclusively target the high-margin side of the market. * Knows a thing or two about entire sectors undergoing a revolution. * Has lots of experience building retail networks.

Well, what do you know, that sort of looks like Apple.

As for "not enough wow space" being available - that's what people thought about the phone industry as well.

Would I bet on Apple being a success? Probably not. But if anybody were to take on that market, Apple's one of the more well-placed contenders.

[patrickk]

> Cars are a terrible industry to get into.

Copypasta from a comment I made on reddit about Tesla, many of these points also apply to Apple, especially the battery knowledge...

"You could argue that Tesla is in the battery pack business, and only incidentally in the car business. When electric cars ultimately take off, not only will their vehicles be perfectly positioned, they can sell the know-how to the slow moving incumbent car makers who are struggling to play catch up. They already have a likely unsurmountable lead in battery pack knowledge (things like software to control charging and discharging certain batteries to extend the life of the pack, compartmentalised batteries to reduce fire risk and crucial battery cooling systems), and their fleet gathers more data daily, while the rest of the car industry makes half-hearted hybrids, or technologically inferior, range-limited cars."

"They already own the high end, and once the Gigafactory pumps out batteries in full force, they'll own the low end, at least initially. Not to mention, another industry, solar PV, is growing and growing but badly needs storage tech to reach full potential. Guess who has a market-ready, solar PV-complimenting battery pack, and will soon have an enormous factory churning out battery packs? They are going to sell these packs to the world for decades."

> Building cars is massively capital and plant intensive

Apple has buckets of cash, they need something huge to move the needle and to show the world they're still innovative, and EVs are likely it.

> heavily dependent on supply chain logistics

Tim Cook's specialty. Apple has lots of experience in dealing with a complex supply chain dealing with huge volume.

> and the market is already extremely competitive.

I would argue the market for EVs/autonomous vehicles is quite different from ICE cars. For one thing, existing car makers are only dipping their toes in the EV market, instead of going toe to toe with Tesla directly (e.g. BMW has the i3 and i8, but no high-volume EV version of the 5 series to take on the Model S directly). So it's going to be a landgrab for EV market share. Existing car markers are heavily invested in extremely refined diesel and petrol engines and the associated paraphernalia like turbos, they probably wish EVs would just go away. Also, they rely on service and repairs for a significant chunk of revenue. EVs are mechanically simpler, and will require much less maintenance. So the traditional business model will be disrupted, again something incumbents don't want.

If version II or III of the Apple car offers autonomy, then we can imagine a city car which is designed to be a taxi, which means you only ever rent it. Again, this is an alien concept to existing car makers, who rely on dealer networks selling to end customers. So this would also favour new players not bound by older business practices.

In short, with Apple's battery expertise, huge cash reserves, supply chain experience and the relatively open market for EVs/autonomous vehicles, I'd say now is a great time for Apple to get into the market. They are also betting on the trend of lithium ion batteries getting better and cheaper every year[1]

[1] http://rameznaam.com/2015/10/14/how-cheap-can-energy-storage...