[antonius]

Mansfield has a successful track record with respect to Apple products.

With that said, this is his most difficult challenge to date and I'm not sure how successful he and the company as a whole will be given the difficulties of bringing an autonomous car to market.

[arjunrc]

I believe the goal here is an electric car with autonomous features, branded similar to the S-Class or the new E-Class (instead of going all the way like Tesla's AutoPilot).

[pgodzin]

What's the point of that? Why would Apple want to make such a huge bet on an industry they have never been in just to create an incremental improvement on cars already billed as luxury items?

If they proceed with the Apple Car, I would imagine it would be a disrupting concept that Apple would be uniquely prepared to handle.

[Roritharr]

I think it has to do with the car industry being the best out of a bunch of bad options. You simply don't need the kind of liquidity Apple has on hand to run a business with the current Product Lineup Apple has on offer. Sure they could do more here and there, but compared to the insane amounts of capital Apple has, any effort in the computing/telco space is just pocketchange.

If Apple ventures out of computing and into areas that need that kind of capital to be feasible, you start comparing lots of medium to low margin industries, the car industry being one of them.

When you look at Apple's brand, company focus and in-house experience, there's only a few industries where diving into could make it a relatively safe bet for the capital involved.

Cars make sense because they are complex technology, already very brand and UX focused in their usual sales processes, and there is a lot of money to be made in the optimization of the supply chain, all things which Apple is second to none.

There were surely other options and I imagine are still being discussed in Cupertino.

Large Scale Urban Development seems like a similar viable candidate, but the salescycles and product lifecycles are probably too much at odds with the rest of Apples business. But the prospect of an build to order Apple Campus must seem quite exciting to some people that are having a blast building the new spaceship.

Among other industries, i could also imagine the Hotel industry being on their marks for similar reasons.

[dingaling]

With the capital they have on hand they could literally start space hotels as a business; they have more cash than the horrifically cost-inefficient ISS cost and just short of the entire Apollo program ( about $150 billion adjusted for inflation ).

Compared to options like that, building cars just looks like selling sugary water. Why not put 90% in the pot and really move things forward?

[sangnoir]

> Why not put 90% in the pot and really move things forward?

Job security? I bet the shareholders would revolt at the first sign of faltering on a $150 billion project. Sugary water might not be exciting, but it is nice and safe and won't get the C-level execs fired.

[maxerickson]

The businesses you mention have much lower margins than premium consumer electronics. Apple branded condos would be a poor use of the brand. They should just give the money to shareholders if that's all they can think of.

[Roritharr]

Thats the point, there are no other industries that provide a ROI as high as Apples while needing that much cash and benefit from Apple Position. Hence the choosing of the best of Bad options. Giving the money to shareholders surely would be an option, but Apple's Board seems to think going toward another big industry is a better Option.

[Zigurd]

Apple appears to be able to defy gravity in smartphone margins. Let's see how they do with cars. Some people think Tesla has a 25%+ gross margin. And Apple has the capital to do something similar at a the scale of auto industry incumbents.

[ams6110]

It's one thing to talk yourself into an iPhone that costs a few hundred dollars more than the competition. It's another thing to talk yourself into an iCar that costs $50,000 more (assuming...)

[coredog64]

That supply chain optimization comes at the cost of having to fight 50 pitched political battles with some very entrenched interests (dealerships).

[Bluestrike2]

I can't see Apple (or any other car startup, for that matter) going any where near the dealership model. There are too many problems with it and too little flexibility. If it weren't for legacy agreements that effectively hamstring manufacturers, it's likely that there would have been some significant changes made years ago. Anyhow, Tesla has already done the hard work of confronting it and making consumers aware of an alternative.

The biggest problem will be dealing with their influence over state legislatures. Tesla already upset dealerships; the idea of someone like Apple (with their capital on hand, experience, and influence at the federal level) following in Tesla's footsteps will be enough to terrify dealerships into some pretty heavy-handed action.

As for the supply chains, there are a lot of differences between the supply chain for consumer electronics manufacturing and automobile parts, but Apple's experience is still intensely relevant. I think it's likely that they'll have a lot of successes in dealing with it, despite those differences.

[csours]

The supply chain is on the other end of the process from the dealerships.

Supply chain -> Assembly (manufacturing) -> sales (Dealership)

[SEJeff]

Seems like for a distribution model, Apple would go the way of Tesla and forgo them entirely. In fact, it would be amusing to see Apple fight legal battles that help sell Teslas in states where they've outlawed it due to the huge dealer lobby. If anyone could slug that one out and win, Apple certainly has the expertise and capital to do it.

[zwily]

Tesla will have already won most the battles before Apple starts fighting, I'm guessing.

[skewart]

My guess is they will rethink what a "car" fundamentally is all about. They'll create a vehicle that has new features that play to their strengths, even if the "car-ness" isn't a big improvement on existing models in the market.

Back when the iPhone first came out a lot of people dismissed it because it wasn't a very good phone - the audio quality and reception tended to be worse than a good Nokia. Who cares if it has all these extra whiz-bang features like a touch screen and a web browser if it's not a very good phone, the thinking went. A lot of people didn't appreciate that Apple was creating a communication and information retrieval device, and not just a traditional phone with some extra features.

I suspect Apple will create a car that provides a great experience for people getting from point A to point B. It will probably not be a great car to drive. But it will probably be an awesome car for passengers. My guess is that they are betting that there will be more passengers relative to drivers over the next decade or two, and that passengers will, in a perhaps indirect way, become a bigger force in car buying decisions than they have been in the past.

So, by the metrics traditionally used to compare cars it will probably be only an incremental improvement over existing models - or it might even be a step backwards. But by the metrics that we'll use to evaluate cars in ten or fifteen years it will be an amazing improvement.

[rodgerd]

> Back when the iPhone first came out a lot of people dismissed it because it wasn't a very good phone

You're describing the launch of the Prius and the GT86, both of which were bagged for tyre size, horsepower, and other metrics. Both have done quite well for Toyota.

[coredog64]

The original Prius wasn't all that great. It is the second and third gen that have done well for Toyota.

[rodgerd]

> The original Prius wasn't all that great.

Much like the original iPhone.

[ams6110]

Not everyone bagged the GT86. Top Gear loved it. Prius on the other hand... not.

[rodgerd]

> Top Gear loved it.

Oh, absolutely. They loved the handling and similar less quantifiable qualities. The people bagging it were the people saying, "Only 200HP? Why are the tyres so small?" while the folks looking at the overall picture were saying "this is a hugely fun car in a very practical way."

[pgodzin]

> But it will probably be an awesome car for passengers.

Isn't fully autonomous the goal precisely for this reason?

[skewart]

It is. And the move towards autonomous cars is part of the reason why there will be more passengers relative to drivers on the road. But it's not the only factor, or the only way to improve the passenger experience.

For example, I'd gladly forget about Lyft and Uber and use a new ride service if their drivers all had cars that offered me a better experience than what a Toyota Camry provides today.

Also, in-car entertainment has become hugely popular for family cars like mini/sport-utility vans.

My guess is that Apple will create an in-car infotainment system that makes current systems look like phone web browsers from 2005.

[semi-extrinsic]

> I'd gladly forget about Lyft and Uber and use a new ride service if their drivers all had cars that offered me a better experience than what a Toyota Camry provides today.

Why don't you use a limousine service, then? There are surely services in your area offering to drive you around in a long-body S-class or 7-series, which are actually purpose built for back-seat comfort.

My guess is you can't afford that. Why would you then be able to afford whatever premium Apple car ride service in the future?

[matt4077]

I'd consider it a failure if all Apple added was a better entertainment system. It's nice (possibly) and it seems to fit with the rest of Apple's products, but it'd fail to get to the core of the whole "car" concept.

[rodgerd]

> Back when the iPhone first came out a lot of people dismissed it because it wasn't a very good phone

You're describing the launch of the Prius and the GT86, both of which were bagged for tyre size, horsepower, and other metrics. Both have done

[jms18]

Ballmer in a 2007 interview with USA Today:

"There's no chance that the iPhone is going to get any significant market share. No chance. It's a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I'd prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get."

Palm CEO Ed Colligan in 2006:

"We’ve learned and struggled for a few years here figuring out how to make a decent phone," he said. "[Apple is] not going to just figure this out. They’re not going to just walk in."

[mikeash]

They laughed at Einstein, but they also laughed at Bozo the Clown.

A smartphone was solidly within Apple's expertise in 2007. It's a small consumer electronics device (iPod, Mac) with a graphical UI (Mac OS X). Apple had tons of experience building (or more accurately, outsourcing the building of) small electronics. What was tricky about the iPhone was the RF stuff, getting the carriers to cooperate, and cutting data usage to squeeze into the crappy data plans available. Except RF stuff is nearly off-the-shelf, and Apple cut the Gordian Knot for the other two items by partnering with an underdog carrier in exchange for unlimited data plans.

A car is far outside Apple's expertise. Are they going to outsource it to Foxconn like they do with the iPhone, and ship them across the Pacific? Doesn't seem feasible. Will they buy or build their own factory? Doable, but totally new for them. What about sales, service, and support? The iPhone was able to use Apple's extensive network of existing retail stores for that, but cars need garages and mechanics.

Obviously, it can be done. Tesla pulled it off with far less. But there's plenty of room for Apple to crash and burn, too. (Figuratively, one hopes.)

[pmontra]

> Are they going to outsource it to Foxconn like they do with the iPhone, and ship them across the Pacific? Doesn't seem feasible.

There is the example of this Italian car sharing service http://www.sharengo.it/

They designed their own car and a Chinese company built it.

[mikeash]

Cool! Do you know who built it and how many they're making?

[baddox]

> Are they going to outsource it to Foxconn like they do with the iPhone, and ship them across the Pacific? Doesn't seem feasible.

I have no idea, but they seem to be pretty good at outsourcing manufacturing where it makes sense to do so. I don't see that as a significant blocker to an Apple automobile.

[martin_bech]

Most of Apples revenue is outside the US now. But i suspect they will do, what Tesla is planning, a factory in each major market.

[tpowell]

I wouldn't underestimate them with their war chest and supply chain expertise, and don't forget their roots: https://www.youtube.com/watch?v=dSj6kvv7_Sg

[revelation]

That's pretty.. mundane.

[ams6110]

Jobs built a factory. The NeXT computer was made there and the factory was reportedly state-of-the-art.

Of course Jobs is gone but I would guess there are others still at Apple that were involved so that it might not be totally new to them.

[declan]

I visited the NeXT factory in Fremont, and it certainly seemed state of the art to me at the time.

NeXT Computer Inc. eventually became NeXT Software Inc. and ceased manufacturing hardware. That was 23 years ago. I'd be surprised if any significant presence from that manufacturing team remained in Cupertino today.

[protomyth]

I was under the impression due to cost and poor sales, they actually had alternate arrangements to build the NeXT products after a while. It was a nice video and launch story though.

[sinatra]

Your kind of arguments were also made about how Apple was going to disrupt the watch industry, the TV industry, and maybe a few more industries. Watches and TVs are closer to Apple's expertise than cars. Apple still hasn't been able to do anything meaningful in those industries.

I still think that, with cars, Apple will try to do what it did with the Apple TV. Just like they built something that works with existing TVs, they'll try to build something that works with existing cars (or a few car partners). I don't think they'll try to manufacture cars.

[FireBeyond]

Precisely. I think it would be fair to describe the Apple Watch as a flop. Amongst my tech friends, and my watch-loving friends (and a noted intersection of the two), only one owns an Apple Watch. And they prefer their Pebble.

[riyadparvez]

I never understand the point of these posted quotes. Every time someone posts a reasonable doubt about Apple's new ventures, there's always the classic "iPhone rebuttal." Yes, Apple did iPhone, and during that time, some of their competitors laughed at them. What does it prove now? Apple is going to solve every single problem on earth just because they have iPhone? Companies create amazing products, same companies also create horrible products. Just because they had created an amazing product does not mean every single product they will create subsequently will be amazing and vice-versa. Why is it so hard for some people to understand?

[parasubvert]

What does any discourse on a forum prove? We're debating stuff that we mostly have little clue or hard data about. Most of what we have are narratives, quotes, anecdotes, analogies, etc.

In the old days we called it "shooting the breeze".

I'm sure an auto industry exec or engineer might chime in with some insight, but even that doesn't prove anything, just might illuminate the challenge Apple has ahead of them.

[maxerickson]

Ballmer was only wrong about which Apple alternative ended up capturing a majority of the market.

It doesn't matter a lot to Apple as they have captured a large portion of the segment of the market that is willing and able to spend more, but Android has more of the total market.

[bandushrew]

That is a point that most people overlook.

Ballmer was right. He underestimated the amount of money they would make, and also underestimated the size of the various markets, and ALSO got it wrong about who would be the "other" OS but......his core point was correct.

[parasubvert]

His core point was not correct. iOS has about 39% of smartphone share in the U.S., 27% in China, and 19% in Europe. Those are not insignificant.

[carterehsmith]

How about the total profit?

Maybe a year ago Apple was selling like 20% of the phones, but making like 90% of the profits. Did things change?

[pgodzin]

Hard to compare a 100 year old industry with dozens of entrenched companies (many intended for the luxury end of the market) and a medium that was just getting off the ground with the high point being a "decent phone"

[vijayr]

Did Ballmer and Coligan really believe what they said? Or were they just trying to put up a brave face? I'm inclined to think it is the latter. Obviously they can't say "oh we know Apple will do very well and kick our butt", right?

[mikestew]

Did Ballmer and Coligan really believe what they said?

I believe that Ballmer believed it. Because MSFT in response to this new iPhone was...to let WinMobile, which was already starting to look long in the tooth before iPhone, sit and languish for a few more years. It wasn't until iOS had well and truly kicked their ass that MSFT decided to freshen up WinMo. By then it was too late.

Palm? Eh, maybe Coligan believed it. Then again, Palm was well aware of the Newton because, well, Palm kicked Newton's ass. But Palm knew that Apple could make a mobile device (even if it were pricey). Could adding phone radios and a dialer be that much of a barrier to entry? I mean, Palm obviously figured out how to do it.

[rhino369]

To be fair, $500 subsidized was way way way above market and Apple had to cut the price significantly. Without the pricecut, the iphone would have probably been more a premium product instead of the default phone in America. They would have still made a killing, but they would have opened the door for Android to mop up.

[mikehall314]

Wasn't it the case that the original iPhone was not, in fact, carrier subsidised?

That was where the big price cut in the iPhone 3G (at $199, down from $399) came from?

[makomk]

The original iPhone was, in fact, carrier subsidised. Apple got a cut of the special monthly contract required to use it. If I remember correctly, they had to offer an unlocked version in a few countries and it was several hundred dollars more.

[nostromo]

> No wireless. Less space than a nomad. Lame.

Apple could release a car that has fewer features than a Tesla or Mercedes, and if it was designed very well, with seamless integration with the iPhone, lots of people would buy it.

[tammer]

The real evidence of this is the news today of Ford (as far as I know last of the major car companies with presence in the US) incorporating CarPlay into their console software. I've heard the reason for the swift industry-wide uptake of the platform is very high consumer demand - even to the point of driving the purchasing choice for a number of customers.

[atonse]

It was a non-trivial factor in my picking a Kia to lease.

I'm not a car person so I mostly can't tell the difference in power, nor do I need it, from other cars. I didn't care about reliability since it was a lease. But I did care that I had to use yet another shitty car-company interface, so having CarPlay support was a huge plus.

The car companies brought this on themselves by designing such bad software for their in-dash systems.

[serge2k]

> I'm not a car person so I mostly can't tell the difference in power

Bet you could if you tried. ;)

I really like my car. It's comfortable, I like driving it.

I really really really really hate the fucking sync software. It's just awful. Full of the stupidest bugs. I don't even have the full nav version, I have the smaller radio system. If I could find a decent replacement console that let me keep my climate controls (physical HVAC controls are a must. no touchscreen BS) I'd upgrade to carplay.

[mikestew]

I'm not a car person so I mostly can't tell the difference in power, nor do I need it, from other cars.

If you lived close, I'd take you for a ride in our 4000lb. VW camper van that cranks out a massive 68 horsepower. You'll notice the difference on the first hill we encounter. :-) (I take your point, though; I've a similar attitude: if I want to go fast, I'll get on the motorcycle and do it right, otherwise I don't care much.)

But I did care that I had to use yet another shitty car-company interface, so having CarPlay support was a huge plus.

Between rental cars and our Nissan Leaf with it's fucking abysmal in-dash UI, I've decided that any car we buy from here on out will have CarPlay or no deal. I'm just not going to put up with crappy car UIs anymore. Plopping a CarPlay-compatible dash unit in our old Scion xB was a revelation. Nothing earth-shattering in CarPlay, but it's familiar and non-annoying. I was driving my Mom's new '16 Corvette, and having not memorized central Florida roads, I found the UI to be annoying as usual. In fact, I can't remember if I ever found the navigation function. What I do remember is tripping across the CarPlay icon on the dash and thinking, "thank $DEITY!"

[Steko]

Apple could sell a lot simply by offering a superior car buying experience. While others have tried/done this, the median car buying experience is still as garbage as it's ever been.

[lastyearman]

Buying a new car is a nightmare. You start with a baseline model and think that's not too bad, tick some reasonable boxes and whoops, your car is now twice as expensive. Usually buying something is a pleasant experience but when it comes to cars? Hell no.

If they just offered one model that has everything and you pick the color, pay a monthly fee and they'd take care of the maintenance, insurance and whatnot.

[ghaff]

Honestly, if you handle your own financing so that doesn't get mixed into the deal, have a hard and fast value in mind for a potential trade-in, and go to a no-haggle dealer, I'm not sure how it's a nightmare. The experience is probably better buying higher-end cars but if you know what you want, what its price is, and get a bank check for what you owe, there are a lot worse experiences.

The reason a lot of people have bad experiences is that they're trying to buy something that they can't really afford, they need financing, and have a trade-in they want to be worth more than it is and the whole transaction becomes this complicated shell game.

[jpalomaki]

Bringing something truly disruptive to the automobile market could be impossible. There's so many companies actively working with cars that maybe there is no room for disruption.

Think about the smart watch market. Many other companies are iterating their products in public. Apple couldn't really surprise the customers with their product. Maybe they build a better product than others, but it was no iPad (which took the whole market by surprise).

[pgodzin]

Agreed. But building a smart watch isn't that much different than building an iPhone. It's quite a jump to car manufacturer.

[kalleboo]

> If they proceed with the Apple Car, I would imagine it would be a disrupting concept that Apple would be uniquely prepared to handle.

That's what people thought about the Apple Watch as well, but it seems these days Apple is content with releasing products that simply complement their portfolio rather than create new markets

[pgodzin]

Evolutionary consumer electronics. The infrastructure and ecosystem they already had in place was easily adapted to manufacturing the watches. I really can't see a marginally better car ever being worth the gigantic entry cost to the market.

[wvenable]

Isn't that what they did with the smartphone market? The big difference is that the iPhone is a computer running OS X -- all things Apple has huge experience with. A car is something they have no experience with.

[martin_bech]

I drive a Tesla daily, its basicly an iPhone on wheels.

[wvenable]

Would you argue the most significant part is that big tablet in the middle or the combination of the wheels, steering, axles, interior upholstery, steel frame, aluminum body panels, battery, etc?

Apple hasn't manufactured anything larger than can be easily Fedex'd. It seems like calling the Tesla an iPhone on wheels misses nearly all of the significant details.

[PhantomGremlin]

wheels, steering, axles, interior upholstery, steel frame, aluminum body panels, battery, etc

Musk has made the point that a lot of that stuff can be purchased from or outsourced to third parties. Which is what the traditional car companies now do. Which is what Tesla does.

The traditional manufacturers maintained their expertise in engines, but, ironically, that's one thing that Tesla had absolutely no use for anyway.

That being said, I do share your skepticism.

[simonebrunozzi]

Why Apple went into music with the iPod? Well... The rest is history.

[scoot]

> "instead of going all the way like Tesla's AutoPilot"

The name "AutoPilot" is misleading - it's anything but. An advanced lan-assist, sure, but compared to google, Tesla's technology is very far from going all the way.

[ams6110]

I am guessing not a full EV but a hybrid.

Full EVs still have competitive vulnerability in range and refueling time. And they likely will for the next decade at least. It's the reason that EVs are still off the table for me.

Something in an innovative hybrid, like a Volt but better designed, would be much more interesting to me.

[mikeryan]

I don't believe that at all.

I'd guess fully autonomous and fully electric. I mean everyone here can see the writing on the wall that this kind of thing that is going to happen. If I'm Apple I skate to where the puck is going to be.

[thevibesman]

I have a feeling Apple might be working on a completely autonomous design; one that would not be legal to be tested on public roads due to current laws requiring human UI elements such as steering wheels and pedals.

[boznz]

Source? Only rumor and speculation on the internet at the moment

[dexwiz]

Apple's goal is to make the first well polished version on the market, and then claim they invented it. Looking at MP3Players/Smartphones/TabletsWithPens.