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Apple R&D Reveals a Pivot Is Coming

• draw_down 10y ago
  Maybe not a huge mystery- they're working on a car, at the very least.
• slantaclaus 10y ago
  Fire Tim Cook?
  • slantaclaus 10y ago
    Always and forever negatively attacked. AS IF Removing this guy could cause improvement.
  • spriggan3 10y ago
    > Fire Tim Cook? Why do you want him fired? who do you think can replace Cook? I don't see anybody.
    • slantaclaus 10y ago
      Some guys were talking about buying out TSLA and placing Musk at the helm. Honestly anybody else. Somebody else deserves a chance. The idea that this guy is the BEST candidate for CEO of the largest company in the world is preposterous.
• bitmapbrother 10y ago
  Apple's not going to pivot. I'm sure they'd like to, but I can't really see what they would pivot too. Instead they'll just throw their hat into the usual next big thing everyone else is chasing - VR / AR and electric cars - of which I don't think they'll have a lot of success in. Their bread and butter will always be the iPhone and they'll ride that wave until it comes crashing to the shore.
  • sxg 10y ago
    > but I can't really see what they would pivot too. If a pivot was obvious, then it wouldn't be a pivot. It would just be the next step in the original plan.
  • epistasis 10y ago
    If we're going to go on history, it's quite likely that whatever Apple pivots to, lots of people will say "yeah, whatever Apple, that's a tiny market and there are already like four players in there and they're all more serious than you." Then within three years Apple will have taken what seemed not so consequential, completely dominated, expanded the market by several orders of magnitude, and left everybody in their dust. That's what a successful Apple pivot looks like. VR, electric cars?! Maybe, but extremely unlikely. Those are obvious things that everybody in Silicon Valley is thinking about and has overhyped to death. Apple would probably take some smaller category that people hadn't thought could hit the big time. IMHO, it's obviously not going to be VR, that's been completely overhyped, sounds cool to nerds but completely impractical and practically useless, and will have basically no impact on the majority of lives out there.
    • petra 10y ago
      This mythic story was true in the past, but with the Apple watch, they didn't introduce something that different from the competition - most of their win there was because of their brand, their loyal customers and the watch being a fashion item.
      • rahoulb 10y ago
        I'd say the watch is similar to the iPod; there was competition out there but the general public didn't really care. Then the iPod was released and commentators complained it was less capable and more expensive than its rivals (insert famous slashdot quote here). But the people who bought it loved it and Apple iterated on the design. (With the watch there are a number of studies that say that tech people don't like it but non-tech people love it - personally I sold mine and won't get another till the screen is on constantly and its thinner). The question is whether the watch repeats the iPod trick of dominating and expanding the market two iterations on. With the iPod this happened when it was no longer tied to the Mac, maybe with the watch that will happen when it's no longer tied to the iPhone?
• mozumder 10y ago
  There's so much Apple could be doing that are a more natural progression from their existing product lines. They could take inspiration from some of their previous consumer efforts to target entirely new product lines, such as a camera (QuickTake), printer (LaserWriter), or game console (Pippin). A modern version of all these would sell out. Or they could reintroduce their enterprise/business products, such as XServe. The electric car idea really won't be ready anytime soon, due to limits of neural-net learning speed.
  • traskjd 10y ago
    One of the biggest challenges that Apple has, is what would actually be meaningful? I loved a comment I saw recently that highlighted that a 10 digit revenue item can be counted as largely insignificant to a company the size of Apple. So, if you start looking at product spaces that have: 1. A meaningful market size (ideally all consumers) 2. A price that is significant 3. Enhances the brand image as chic/cool 4. Is global You don't really discover too many spaces to play in. They're not going to move the needle with a new printer. Frankly, if I was Tim Cook, I'd just buy Tesla and be done with it. Goodness knows they have the cash, and Elon has signalled previously that he'd be interested in handing over the reigns once the original strategy was delivered.
    • mozumder 10y ago
      The problem they're facing with the big bets is that they can lose big as well. With iPhone sales dropping 30%/year, they're losing about that much revenue also, since the company's revenue is tied so much to that singular product. A broad product portfolio will always be more stable over the long term.
    • Eridrus 10y ago
      This is exactly the sort of thinking that leads to companies becoming irrelevant; almost nothing can move the needle for them, so they fail to see the next thing coming. The initial theory of disruptive innovation from The Innovator's Dilemma is about this exact issue and how companies can deal with it.
    • 10y ago
• carsongross 10y ago
  I wish it was possible for Apple to settle in and polish, competently executing on designs that are already very good and slowly improving their entire lineup (including, please, monitors!) It's rather depressing to consider that excellent industrial design can only be supported on the exponential-looking part of the sigmoid curve.
  • tim333 10y ago
    I imagine they'll keep polishing the existing stuff as they have for a while. It's just they seem to be working on a car too. I'm not sure launching a new product is really a pivot - that term is usually used when junking the old business plan.
• BIackSwan 10y ago
  Great post. A keyword is missing - autonomous car - maybe the first couple of versions will be manual but they can be relevant in the long term only if they are working on bringing autonomous cars to the market as fast as tesla/google.
• heifetz 10y ago
  Apple needs a visionary. Google, Amazon and Facebook all have founders who are visionaries and drive the focus of the company. Tim Cook could be a great CEO, but he is not a visionary and does not drive products. Who is driving the vision at Apple? It's not Jony, I have no idea who is doing that. That is also something you can't do by committee. Apple seems to be really floundering and does not have any great visions for new products or focus to make people excited! People have certainly slowly lost interest in the iPhone. Apple needs to spend its cash and bring Elon Musk onboard!
  • petra 10y ago
    Apple can find visionaries as it did in the past, when fadell outside of Apple started pitching the idea of the iPod and Apple recruited him and let him manage that division.
    • dba7dba 10y ago
      And even the idea of allowing 3rd party apps on iPhone was pretty much forced upon Apple by popular demand from what I recall.
• darawk 10y ago
  Is this a surprise? Isn't it well known that Apple is working on a car? I think the big question here is not are they working on a car, but can they deliver a car that represents a significant improvement over what's out there. And that i'm highly skeptical of, unless they deliver full autonomy. But there is just no way Apple is going to beat Google to market with that technology. So, I agree they're working on a car, but I feel fairly confident that it will be an absolute disaster for them. Though most times that's been said about their products in the past decade or two has been a disaster for the person saying it.
  • mturmon 10y ago
    I guess it's the magnitude of the effort that is not widely appreciated. DF reported on May 4 (http://daringfireball.net/linked/2016/05/04/manjoo-moonshots http://daringfireball.net/linked/2016/05/04/manjoo-moonshots) that: "I know The New York Times can’t say that it’s certain that Apple is working on a car, but I can. They are. Of course they’re working on a pay TV service. It would be astonishing if they didn’t have teams hard at work on VR and AR. The difference between Apple and other companies is that Apple will spend tens (or in the case of the car, hundreds) of millions of dollars on a new product and never ship it. They don’t just say no to ideas — they say no to long-in-development projects." Note, "hundreds" of millions of dollars. Whatever you say about DF spin (and you'd be right!), the facts he leaks are generally accurate. The analysis in the OP (exhibit 3) would seem to indicate ~$5B on R&D on hitherto-unknown products since 2014. Which is astonishingly large. Because it's based on company reports, this must be common knowledge for serious tech industry analysts.
  • CPLX 10y ago
    > But there is just no way Apple is going to beat Google to market with that technology. Why? Apple is possibly the world's most effective company at synthesizing industrial design and software in premium devices sold to consumers. Google is a web/cloud services and advertising company. The reason presumably is that you can't see what Apple is doing in public, while Google has a car that still can't drive itself in the rain that is occasionally seen wandering around Mountain View. I question the methodology of that analysis.
• rdl 10y ago
  The other depressing interpretation is that they're achieving less per dollar spent on R&D (becoming less efficient); they certainly seem to be achieving less per release of product now, so it would be consistent. Maybe there was a time when Apple got the most brilliant people wanting to work there because it was Apple; if that's no longer true, their efficiency would decrease. (Arguably the same thing happened in K-12 education; when women were largely excluded from other professions, teaching positions were filled by the best women in the workforce; now, many of them would rather be doctors/engineers/lawyers/etc., so the quality of educators has decreased to the market level.)
  • nikdaheratik 10y ago
    From looking at the numbers, they would need to be spending 10x more to achieve less per release. It seems much more likely that they're putting their resources into something else, like a car or some other new category. This would also partially explain why some of their more mature products aren't getting anything too interesting, though no one else seems to be moving into the space either. So it could also be that they're is only so much you can do with mobile phones right now.
  • Alex3917 10y ago
    If their efficiency is decreasing then that's probably more related to having too many products rather than not-smart-enough people. The cost of shipping each new release roughly follows Metcalfe's law, meaning that each existing product/feature you need to support going forward makes the next release exponentially more expensive. My hope is that the car is a front and they're secretly building arcologies, but in reality they're probably just building some shitty car.
• datashovel 10y ago
  I think the ideas presented appear somewhat contradictory. I may be missing something here because the following 2 ideas seem contradictory to me. 1) Apple's secrecy 2) Apple's pivot If they're pivoting, why be secret about it? One of the reasons provided was that being public about new products could hurt current product sales. If it's an entirely new product line (ie. car), I have a hard time believing someone will think twice about buying an iPhone because Apple is coming out with an electric car. Instead being secret seems it may hurt more than help. If I'm in the market for a new car, and there's a real release of an affordable Tesla that has already happened, while at the same time I have no idea what Apple is doing or if they're even going to do it or what kind of timeline the project is on, I'm probably going to buy the Tesla. Otherwise if I'm somewhat certain that Apple may be coming out with a new car within a year or two, I may decide to hold off with my purchase of the Tesla for the time being in order to consider buying the Apple iCar when it comes out.
  • IBM 10y ago
    Apple doesn't pre-announce things or do concept videos (the only exception I can think of in recent memory was announcing the Mac Pro at WWDC). Things get announced when it's a product ready to be sold. It's tough to say this is the wrong strategy considering the success they've gotten because of it. And there are plenty of counter examples from their Silicon Valley rivals who like to generate PR for blue sky research or things that will never come to market for years (if ever).
    • inmyunix 10y ago
      Watch.
      • comex 10y ago
        Yeah, 7 1/2 months was a pretty huge announcement-to-launch delay for Apple (though the original iPhone went 5). But that's nothing like a "concept video" or "blue sky research" - it was announced as a final product design with the same look and feature set it shipped with (though not with a price), and was probably delayed due to manufacturing issues. The car, on the other hand, is still years out.
• Animats 10y ago
  Apple may be developing automatic driving technology, but actually making cars seems unlikely. They mostly outsource manufacturing, after all. Apple might be working on something to take a bite out of Facebook or Google Search or Amazon's Echo. The next big thing is likely to be "you just talk to it and it does the right thing". Siri with common sense.
  • IBM 10y ago
    Facebook and Google Search are ad businesses, and looking at those businesses they're very small compared to Apple. There's also tons of competition there already and it's outside of the skillset of Apple. Apple is making a car not self-driving technology. They may develop self-driving technology, but the business will be making a finished product that they sell to customers, not licensing technology to others (which is what Google is doing).
    • jbigelow76 10y ago
      >Facebook and Google Search are ad businesses, and looking at those businesses they're very small compared to Apple. FB maybe, but Google? Back in February Google was larger than Apple in terms of market cap. As of right now Apple is back on top, $506B to Google's $491B, explain again how Google is "very small compared to Apple"?
      • IBM 10y ago
        Google's business is 90% ads and they did $16.35 billion in profit in the last year compared to Apple's $50 billion (from Yahoo Finance). Should Apple focus their efforts to get a chunk of the ad $ out there or focus on a business that utilizes their competencies?
• serge2k 10y ago
  Is the car before or after the TV they were definitely going to release a few years ago?
  • TazeTSchnitzel 10y ago
    The TV did come to fruition, but they made a set-top box rather than a fully-integrated product. They made a Mac mini instead of an iMac, if you will.
• Mendenhall 10y ago
  Maybe apple is moving into weaponry, now that would be a pivot!
• inmyunix 10y ago
  Car seems likely, yes, but I would place bets on an augmented reality play as well.
  • deleted 10y ago
    [deleted]
• beloch 10y ago
  According to this chart, Apple spent $6B in 2014 and is projected to spend just over $10B in 2016. For comparison, in 2014 Volkswagen spent $13.5B, Samsung spent $13.4B, and Microsoft spent $10.4B. [1] Apple has, historically, not been a big spender when it comes to research, tending to favor short-term, tightly focused research over long-term, curiosity driven research. Over the last few years their research budget has ballooned, but only in 2017 (projected) are they going to reach levels that the above companies were spending at in 2014. Has Apple's research focus changed? Perhaps we're not seeing some monumental project in the works, although an autonomous car would be pretty big. Perhaps what we're seeing is Apple deciding to loosen the purse strings and, instead of stashing away obscene piles of money, they've loosened their research focus and now have a lot of people doing whatever the hell they want, much like MS, just because something useful might someday emerge. Let's face it, Apple has so much money they could probably launch their own space program if they really wanted to. [1]http://fortune.com/2014/11/17/top-10-research-development/ http://fortune.com/2014/11/17/top-10-research-development/
  • astrodust 10y ago
    Just imagine how much fun Ive would have designing an orbital space station. What's interesting is how aggressively they're moving into the car space if that's what's happening. The phone people had no idea, they got blindsided thinking Apple wouldn't have the guts, would never commit the money.
    • iLoch 10y ago
      Not nearly as much fun as he'd have talking about how he designed it.
      • deleted 10y ago
        [deleted]
      • tzaman 10y ago
        Not nearly as much fun as YouTubers would have remaking his promo videos :)
• Inconel 10y ago
  I’ve read a number of articles about the prospect of an Apple car but most have still left me with more questions than answers. My main questions regarding an Apple car are the following: 1. Apple seems reluctant to chase market share at the expense of profit. The automotive industry is very well established and from my understanding operates on razor thin margins. Apple seems to be a master of the supply chain but much of this has to do with the fact that they ship such large numbers of very similar hardware. Apple doesn’t ship the most smartphones in the world but they do ship the most of a single model and this allows them to put incredible pressure on their suppliers. Does anyone expect Apple to be able to move so many cars that they would be able to put more downward pressure on suppliers than the traditional automakers? 2. If the strategy isn’t to dominate the market and thus assert downward pressure on suppliers then I would assume the strategy would be to sell a premium car that carries higher margins. Apple obviously has a well deserved reputation as a premium product within the computing/electronics space but is it a given that this would translate to the automotive market as well? I don’t particularly care for a brand’s prestige but I know this does inform many consumers’ decision making. Apple might be viewed as a premium brand compared to Samsung/Moto/Lenovo/HP/etc, but would most consumers be willing to pay a premium for an Apple car compared to a BMW or Mercedes? 3. Is there any reason that Apple’s prowess in the electronics supply chain may not translate well to the automotive supply chain? These two industries seem very different to me. 4. Apple, like almost everyone else in the tech industry, uses outsourced manufacturing for the majority of their products. While there are similar contract manufacturers in automotive, they are not nearly as large nor their use as wide spread, to my knowledge at least. Foxconn was already one of the biggest electronics manufacturers even before they started building iPhones for Apple, I don’t think a Foxconn equivalent exists in the automotive world. I would imagine this may present problems for someone like Apple that doesn’t plan on actually building their own cars, or do they? 5. There is considerable risk when launching a car model, even for the established players, I would assume the potential risk for a newcomer would be even greater. Newly introduced cars seem to suffer from more serious and more widespread problems than newly launched smartphones/computers do, although those often suffer problems as well. Does the potential exist that problems encountered with a newly introduced Apple car may carry over to negative perceptions about the broader Apple brand? It seems enormously perilous to me to risk your brand reputation on one specific product line that traditionally tends to be both very low margin and suffer from frequent defects. I’m curious what others may think of my concerns or if anyone knows of articles that have gone into more depth with regards to my concerns.
• aetherson 10y ago
  The idea that Apple is going to "pivot" is fatuous. Are they working on some non-phone products that they hope will be big? I'm sure they are. Could they conceivably find that one of those products achieves massive traction and overshadows the iPhone (especially as the market for smartphones cools)? Sure, though I'd bet against it actually playing out like that. Is Apple making a big planned play to radically deemphasize smartphone sales in a desperate gamble to become a car company? Of course they aren't. Even if the smartphone market's high-water mark was 2015, Apple has a hugely successful, almost grotesquely profitable product that will -- assuming they don't do something absurd like pivot away from it -- be the source of incredible value for at least a decade and probably much more. On the back of the iPhone, Apple has grown to a market cap that -- even after recent losses, and despite a weirdly low P/E -- is massively higher than the combined market caps of the top five auto companies.
  • cageface 10y ago
    There are no guarantees that the iPhone will generate anything like the profits of the last several years indefinitely. There are a number of strong headwinds including the end of carrier subsidies, market saturation, a weak global economy, increasingly mature competition at much lower price points etc. I don't think they're in crisis but they do have a real problem on their hands. Of course they have a lot of room to slash margins to compete so I'm not too pessimistic but the iPhone was really a once in a generation kind of product and I think they've taken most of the easy profits off the table already.
    • aetherson 10y ago
      Nothing is indefinite. And, basically, I agree with you. If 2015 wasn't the high water mark of the smartphone market, then some near-future year will be. But smartphones are also clearly not going to crash and burn. Even if people don't replace them like clockwork every year or two years, there is going to be a healthy market for iPhones for a long, long time. There are still people without smartphones, there are still large markets with low Apple penetration, and they have an enormous install base and developer support -- and, as you say, positively absurd profits to cut into eventually. Does Apple dream of another product that will be as big as the iPhone, but is yet in its infancy, with its growth ahead of it instead of behind? Well, of course they do. How could they not? Will they launch new products? Of course they will. Might one of them be a car? It might. If the stars align for Apple again, might we in ten years say that they are not the iPhone company, but rather the X company? Yes, that is possible. But: 1. There is no possibility that Apple is planning to pivot in any meaningful sense of the word. "Pivot" does not mean "launch a new product and hope it takes off." Pivoting is simply not something that the most valuable company in the world does in the face of some cooling of demand. Pivoting is what desperate start-ups do. 2. If the leaders of Apple are basically cool-headed people who do not entirely buy some kind of superheroic mythology of what Apple is capable of, they are probably aware that the iPhone was a literally singularly successful product in the history of, like, the world, and that the odds that lightning will strike twice and they will have another product that successful or even more successful are lower than the odds of lightning literally striking the same person twice. It is possible that Steve Jobs was not a basically cool-headed person. I think that Apple's current leadership is. 3. And specifically, the product that makes us forget the iPhone just straight up can't be a car. There is just no demand for a car that can support an Apple-in-2015 type valuation, especially at iPhone-like profit margins, double-especially in a world in which autonomous cars makes any meaningful jump in the utilization of each car. And PS: approximately 0% of Apple's current employee base would be useful in Apple-as-a-car-company.
• dbcooper 10y ago
  Perhaps some of this is that they are accounting more expenses as R&D for tax reasons?
• abalone 10y ago
  It's a car and it's not a "pivot". The Mac, iPod, iPhone, iPad, Apple TV and Watch are all about apply the same philosophy to new product categories and then tightly integrating them. At the core of it is fundamentally rethinking the interface between user and machine. With cars it makes perfect sense as long as you do one thing first: throw out everything you've read about fully autonomous cars being right around the corner. If instead we're facing a future of semi-autonomous capabilities which still require a human to oversee and guide -- much like the autopilot controls of airplanes -- then there is a massive opportunity to rethink the automobile interface from the ground up around this new hybrid approach. You can be sure that Apple's car will not just be a Jony Ive designed Tesla. It will involve a rethinking of the user interface. Apple likes to make a 10X difference when entering product categories and that's been the key element. Effective autopilot assistance features can plausibly get us to 10X improvements in safety and convenience. Apple's functional organization is one of its secret weapons in applying this philosophy consistently across so many consumer categories and creating a halo effect. I would be very surprised if they changed that for computers-with-wheels.
  • bendbro 10y ago
    I know people have said this before and been very wrong for it, but I just don't think there's much in those constraints to innovate (read Blackberry). Unless you change the only fundamental aspects of owning a car (driving, parking, and maintenance), all you're doing is polishing a turd. If Apple is just building the car, and fully autonomous transport is out of the picture, then all they can hope to do is make it electric and install all kinds of shiny gizmos inside. Battery tech won't advance on their doing, so we can't expect their "revolutionary" change to involve any actual gain in commuting, but we can expect to be inundated with a lot of beeps and boops. Oh and maybe your Apple watch will unlock the doors.
    • abalone 10y ago
      You mentioned Blackberry. Pre-iPhone, the world probably would have said there isn't much you can do to innovate on smartphones. They will always need keyboards so the screen has to be small, etc. With cars I want to underscore what I said about a "10X" improvement in safety and convenience. That is not just polishing a turd. What does it take to actually get to a car that largely drives itself, on myriad roads and conditions? It is wishful thinking to believe cars will do this all by themselves without drivers anytime soon. Instead, think of a UI that is much more about "mind-melding" with a human driver. Letting them know exactly what it is planning to do, how it intends on navigating that stretch of Highway 1 without driving off the cliff. THAT will probably require fundamentally rethinking the cockpit. You will be mostly focused on "driving by instruments". If they can achieve that, then we get cars that really do save thousands of lives and make the journey much more relaxing.
• mulcahey 10y ago
  I really wonder how they will differentiate themselves from Tesla's offerings. Tesla represents the very cutting edge of innovation in the automotive industry being the leaders in autonomy, EVs, battery production, the chargin network, etc. I wonder if Apple will partner with Tesla to use their Gigafactory batteries and charging network. If not they would have a lot of ground to make up.
  • abalone 10y ago
    Tesla's made enormous strides in core automotive engineering but to answer your question you have to ask, what would make a 10X difference in a product category? That's Apple's rough criteria for entering a space. It's not just moving to electrics. The answer, at least for Apple, has always been in user-facing software. The hardware is a "pretty box" (to use Jobs' phrase) and certainly there is impressive core engineering there. But the 10X difference comes from fundamentally re-envisioned software platforms and user interfaces. So this doesn't make much sense for cars if we only think in terms of traditional automotive engineering or "merely" shifting to an electric platform. Tons of incredible feats of engineering, but not a 10X difference in user experience or opening of a new landscape like the Mac, iPhone, etc. BUT if we look to the (semi-)autonomous future then it's a huge wide-open landscape of innovation. And it's all about the software smarts and user interface. It's critical to understand that the user interface is essential, i.e. that we will not simply jump to fully autonomous cars. They will be cars that interface with human drivers for quite some time. So that's where Apple will compete with Tesla. And yes getting the underlying (electric) automotive hardware and production right is a huge challenge in and of itself, but ultimately technically feasible. The software layer on top of it is more of a proprietary differentiator in the long run.
• fblp 10y ago
  I wonder if this could also be some smart accounting. The US and other countries have tax incentives that encourage R&D expenditure.
• davesque 10y ago
  Even if Apple is working on a car, I can't imagine that it will cost any less than $50,000. I've always felt the amount of money people spend on luxury vehicles is obscene.
• exabrial 10y ago
  All I want is an Ethernet port on my MacBook Pro. Please stop the maddening war on ports. Edit: sorry I meant Macbook pro
  • emdowling 10y ago
    It does. It has two of them in fact.
    • Daneel_ 10y ago
      ...via dongle, at US$29 each, thank you very much. Want to connect an external screen at the same time? Too bad. I'll take built in ethernet and two display connectors on my lenovo instead. Want to add another network port? Well, there's USB3 gigabit, or simply USB-C. If you need native PCIe adaptors, then Dell XPS range comes with Thunderbolt 3 via USB-C. Sorry, I have to agree with the parent that the port war is growing tiring. Unless there's a plethora of USB-C ports on the laptop we still need our connectors.
      • realityking 10y ago
        Are you thinking of MacBooks? Because the grandparent talked about the Mac Pro who has two normal RJ45 ports: http://www.apple.com/mac-pro/specs/ http://www.apple.com/mac-pro/specs/
        • Daneel_ 10y ago
          ...yes. Yes I am. Egg on face. The point still stands though, it's such a shame seeing the minimisation of ports on all systems these days. I can understand using standard ports (usb-c) for peripherals, but essentials such as Ethernet, display and several USB ports (whichever format) should remain built in.
          • shoyer 10y ago
            There's a simpler reason for the lack of an Ethernet port. Compare the size of an Ethernet port to a USB port on the Mac Pro and then look at the side of your MacBook Pro. The Ethernet port would not even fit.
• nickpeterson 10y ago
  Has anyone mentioned that maybe Apple just doesn't have the focus (Jobs) at the top telling it where to spent R&D? How much did Apple spend on R&D under other CEO's when Jobs left?
• zargath 10y ago
  Apple snatched a few Tesla employees and a few people has said that Apple are working on a car. Seems obvious. Has anybody considered that it might be other form of transportation? Maybe an electric motorcycle or some other cart? All their devices is very personal, could be a personal transportation device? Apple's mission seems to be to create the best products they know how to build. But environmentalism is pretty highly valued at Apple, so it seems likely that they will move towards things that they think will benefit not only their costumers but also the environment. But Tesla's mission seems to be about accelerating the adoption of electric cars. They need "everybody" to produce electric cars, so it is in Tesla's best interrest that they build a car. It will be interesting to see if Apple picks up on Tesla's R&D, with the opensource patents and maybe even a Tesla Gigafactory. But very interesting to follow, hope they make a car and hope they make it great. But I am afraid they lost their cocky edge a few years ago, so it will probably just be a nice new car.
• boznz 10y ago
  Assuming its a car.. Cars are not phones and I don't see the massive factory/production line being prepared to build the cars nor the investment in battery production that would be required (assuming an EV not an ICE) so unless they buy BMW (LOL!) or another car manufacturer then it will be 3 years minimum from them showing a car to us being able to buy it.
  • varjag 10y ago
    Apple definitely can tear apart the status quo in dashboard/driver UI/entertainment console automotive market. They don't have to make a complete vehicle. Even with semi/fully autonomous cars there's a huge potential for a quality OEM software/sensors package. Remember aside from the biggest car conglomerates there's a dozen smaller 2nd tier makes who can't afford building self driving car from the ground up. Even the biggest ones invest into it more out of necessity than internal motivation.
• brandonmenc 10y ago
  They are not working on "just a car." They are trying to become a mass transit provider by owning and operating a large fleet of those self-driving cars, renting them out on a per-ride basis. That is, if they're smart.
  • estefan 10y ago
    Yeah the future of cars is not owning one. Cities don't need more individual car ownership.
    • Toenex 10y ago
      > Yeah the future of cars is not owning one. I think it is more "The future of cars is not _everyone_ owning one." The point is that most cars spend most of their time sat, parked waiting for a single user who is also usually the owner. This is inefficient. I'd rather the car I owned was out earning money while I'm sleeping/working and available just when I need it. Uber has the right idea, and those that own cars will become part of their network. Two other industries I see impacted; car parks - my car doesn't need to remain near me; home delivery - thanks, I'll send the car to pick it.
• Corrado 10y ago
  I think I would be more excited if Apple were researching ways to remove the cell phone completely, at least in a physical sense. Think about it, with the rise of things like AR/VR for output and Viv for input, what need do we have of a handheld device? Everybody is concentrating on the next iPhone, but what if it is a set of contact lenses and headphones? I think that would truly blow people's socks off. Sure, Apple could be (and probably is) working on an automobile of some sort, but that seems like it would be difficult to really make a 10x improvement on. Especially with all the rules and regulations about what can be considered a car; it must have mirrors, steering wheel, pedals, etc. The prospect is so limiting. Besides, I think Tesla is rocking the automotive world and Apple would probably be better teaming up with them than going alone. Just my $.02 worth.
  • collyw 10y ago
    Google glass seemed to be the first step in that direction, but it hasn't proven so popular.
    • B1FF_PSUVM 10y ago
      Apple will do it with lapel pins. (Sorry, Jony.)
• raverbashing 10y ago
  No what I think is happening is this: - Apple is investing more in ancillary services (iCloud, Siri, Maps, new Arm processors, etc) - More investment into manufacturers to get the latest tech (retina, etc) - Some of it is lacking focus and spending a lot of "R&D" money in irrelevant stuff (like most big companies do)
• paulftw 10y ago
  I think median Software Engineer Salary also followed hockey stick graph over last couple of years, as well as CA real estate prices, so it isn't that clear that Apple grew headcount at all. When iPhone came out there was no app store nor 3rd party apps; when apps arrived they had no push notifications; icloud didn't exist and so on. Products become exponentially more complex, requiring proportional growth in R&D. There may even be tax incentives to maximize R&D spending. Smart home / smart appliances would be a much more logical step for Apple as it'd be much closer to their area of expertise in electronics. Unlike with iPod and iPhone, there's at least one company that is already doing all the right and hard things around cars - Tesla. TVs, kitchen appliances, even lights are much better understood and researched. Technology is there, safety/regulatory barriers are lower than with cars, consumer demand is pretty obvious. Yet existing manufacturers releasing product after product with laughable design and usability. Just like used to be the case with Nokia and Windows smartphones.
  • ryandrake 10y ago
    Is there any actual evidence showing that median salaries are anything but stagnant recently? There may be a few outlier people at a few outlier companies experiencing "hockey stick" growth, but is this true for the median?
• kukabynd 10y ago
  Since there was talk about Apple Watch, there also was a lack of wow effect people had expected from it. Considering Apple’s human power, there is something going that takes time. Might be a car, might be something else. Smartphones have plateaued, so they’ve been working on something greater long before growth had slowed down. Time will show.
• herghost 10y ago
  Why not financial services? There's a handful of small players testing the banking regulations now (like Mondo) to get authorised as basically "iPhone banks" - modern, mobile, without the legacy and technical debt. With Apple Pay (and their $billion reserves) Apple could conceivably sweep in and buy up these newly regulated challenger-banks and buy their way into FS overnight.
  • tomelders 10y ago
    Thanks to all those banks that have seeded Apple Pay with more customers than they could possibly have hoped for. I don't know if Apple are thinking along these lines, but I do know that it's a great idea either way.
• reissbaker 10y ago
  Apple was once considered extremely innovative despite its secrecy because it regularly shipped ground-breaking new products like OS X, its breathtakingly high-design computers in the late 90s and early 2000s, the iPod, and of course the iPhone. Apple hasn't shipped a successful new product line since Steve Jobs' death, and sales of its last successful major product — the iPhone — now seem to be slowing. Their cloud efforts are famously flailing, and their software is increasingly stale: who here has a folder full of unused Apple apps, with better third-party replacements on their home screen or dock? Almost everyone with an Apple device. I sit here writing this on a Macbook, unironically. Their hardware manufacturing capability is best in class, and they've managed to hone their existing products' hardware increasingly close to perfection. But innovative? You can't be innovative just by spending money on R&D. You have to ship new products. And for now, Apple seems like it can't.
  • cstross 10y ago
    > Apple hasn't shipped a successful new product line since Steve Jobs' death I disagree. The Apple Watch is only "unsuccessful" using a yardstick calibrated to the scale of existing Apple product lines -- in its first year it appears to have achieved sales revenue on the same order as Rolex ($4.7Bn, per Forbes). (Apple's secretiveness makes it hard to tell how many Watches they've sold, but the low estimates are in the millions, and the high end estimate -- 12 million shipped through 2015, per Canalys -- would put them in the same league as the market leading luxury watch manufacturer, if not ahead.) If any other company had released a product that replaced the century-old industry-wide #1 luxury brand within a single year it would be seen as truly disruptive and a major breakthrough. But the wristwatch industry is small by Apple standards, and the nascent smartwatch market is still embryonic compared to smartphones, so the scale of sales doesn't match onlookers' inflated expectations of an Apple product. (As for Project Titan, I expect a bit more than just an electric car, given that scale of investment. Possibly an attempt at redefining how we do intraurban and suburban personal transport, the Apple way. But they'll have an uphill struggle to supplant the automobile with something better, because of all the built infrastructure and regulatory constraints, so at least at first it'll look like "just an electric car".)
    • 10y ago
• lr 10y ago
  Has this car thing in relation to Apple been confirmed? Nothing about the word Titan makes me think of cars.
• no1youknowz 10y ago
  According to venturebeat[0]. Samsung has 1m gear VR users. We all know how apple has a far superior supply chain, creates better software experiences and does things "right". So is it that much of a stretch for them to actually come out with a mobile VR headset? Think about it. - They make the phones. - They make the vr software. - They already have the eco-system for you to get apps from and the developers to sell through. - They can sell upgrades for face/hand tracking, etc. What about a version of FaceTime, where 2 people can call each other and play a game together? Within a very short time could exceed what Oculus is doing very quickly. [0]: http://venturebeat.com/2016/05/11/oculus-and-samsung-have-1m-gear-vr-wearing-users/ http://venturebeat.com/2016/05/11/oculus-and-samsung-have-1m...
  • sametmax 10y ago
    > We all know how apple has a far superior supply chain, creates better software experiences and does things "right" "We all know" ? The starting point for your whole desmonstration is assuming general agrement of one of the biggest source of troll of all time ?
  • robert_tweed 10y ago
    I came here to say the same thing. I wonder where all these rumours about a car are coming from? Smoke and mirrors? Frankly, that idea sounds ridiculous, but the first "good" VR headset is something that Apple is absolutely capable of delivering and importantly, it fits the R&D spending figures in the article (a car would cost them a lot more). They also happen to have a number of unique strengths such as their own OS, their own SoC that give them a huge advantage over anyone else in market. It also makes sense that Apple would not want Facebook to gain any traction with the Oculus Store in competition to their own App Store, so frankly it would be a huge strategic mistake for Apple not to release a VR device within the next 2 years. I just think they won't release anything until all the user-hostile kinks have been worked out. Apple is not, as many seem to be suggesting in this thread, about applying "disruptive UX" to random markets like cars. They are about giving new technologies mass-market appeal. They take something niche (like MP3 players, smartphones, or VR) and they make it into something that everyone wants.
  • bobbyi_settv 10y ago
• JustSomeNobody 10y ago
  >After analyzing the three preceding possible explanations for Apple's R&D increase, we can conclude the only one that actually makes sense is the third choice: Apple is looking to pivot. Can we really conclude that? Good geez.
• jimmytidey 10y ago
  Isn't it basically impossible for Apple to surprise us with a driverless car? Surely all of the process to make a driverless car legal would be in public? Surely the production line for any kind of car at all would be almost impossible to organise covertly, all the factory space, tooling etc?
  • mrcwinn 10y ago
    I remember the "iPhone" being a topic of rumor for literally years. Leaked photos (some more accurate than others) and a steady drip of information. Looking back, it was still a big surprise once the details were known. So, a car? Build a roof, sign some NDAs, and do your best.
    • coredog64 10y ago
      I was at On Semiconductor in 2007, and it was an open secret around the office that Apple was getting into the phone business. We knew because management kept touting the fact that we had $4-5 worth of the overall BOM in the iPhone and that was going to be awesome for us.
      • scottmf 10y ago
        iPhone was announced Jan 2007
  • Joeri 10y ago
    The iphone needed to be fcc certified too, they just announced it 6 months prior to selling it to keep the element of surprise.
    • jimmytidey 10y ago
      Getting a phone certified is surely quite a bit different from an autonomous car ready for consumer use?
• Communitivity 10y ago
  I don't understand the confusion on what Apple's next big thing is, they've laid it out time and again. Come to think of it, I think I just saw a slide with it right on the single slide during the Viv presentation. I went back and found it. Here is the video URL at the time the slide is shown: https://youtu.be/Rblb3sptgpQ?t=51 https://youtu.be/Rblb3sptgpQ?t=51 It's the same thing OpenAI, HARC, and other groups are working on: creating revolutionary intelligent assistants and possibly achieving strong AI. The chance to work on that project at Apple, that I might consider a move for. Applied AI combined with conversational or AR interfaces to create specialized personal assistants will be the next in the line of game changers such as car, flight, radio, telephone, computer, rocket, internet, cell phone, the web, smart phone, tablets, and data mining.
  • mcphage 10y ago
    > I don't understand the confusion on what Apple's next big thing is, they've laid it out time and again. [...] It's the same thing OpenAI, HARC, and other groups are working on: creating revolutionary intelligent assistants and possibly achieving strong AI. I hope so, but given they released Siri in 2011, and only minimally improved on it since, it doesn't look like they're giving the field much attention. It doesn't look Apple takes it very seriously, and in the meantime Google & Microsoft have released their own superior versions.
    • eric_h 10y ago
      > given they released Siri in 2011, and only minimally improved on it since It's quite possible that their iterative loop on Siri and Siri-like experiments simply doesn't include the general populace. Apple does not have much of a history of touting beta software and using their customers as guinea pigs, but internally they definitely do.
      • mcphage 10y ago
        It's definitely possible, but I'm not sure why they wouldn't? The data from millions of users from all over the country / world would be a lot better than a small number of users in a single place. And they still push it as a sales feature, so showing real improvement over time sounds like something they would want. Still, I hope you're right; I do agree that it's a big part of the future, and seeing it flounder is frustrating.
• Grue3 10y ago
  What are the margins in car industry? iPhone margins are enormous, so how do cars really compare? Is it even worth pivoting into this industry when you're already a big player in a more valuable industry?
• mangeletti 10y ago
  I have long thought that Apple was working in secret on a consumer robot; perhaps something on the order of $1-5k price point. It was just a hunch. I've now begun to think that the increase in what everyone is calling "R&D" is just Apple become too large to any longer be efficient. Perhaps they've crossed that point mentioned in the Mythical Man Month where gains in team size decrease productivity.
• justaman 10y ago
  They are working on a "next-gen" operating system. Something entirely unlike what we have come to know as a GUI. I just thought I would leave this comment here so in a few years someone will find it.
• baron816 10y ago
  I don't like the idea of Apple (or even Google for that matter) making cars. It seems like such a weird space for a company that makes consumer electronics parts to move into. It would be almost as weird as them starting to build houses. And I don't want to buy all my stuff from one company. Either way, I'm skeptical that any company is going to make huge, monopolistic profits from selling autonomous cars. It's something that's going to easily commoditizable. Consumers aren't going to care which company their buy their autonomous tech from, as long as it's safe and it works. A better fit (although much, much, much harder to achieve) for Apple would be a real robot/android. Apple has hundreds of billions in cash to play with and a steady stream of income on the horizon for the next few years. I think they should accept that they don't have to come out with the next big hit every year. They should look 10+ years in advance and try to beat everyone to the last consumer electronic product.
  • murukesh_s 10y ago
    "the last consumer electronic product" - loved that part..
  • manmal 10y ago
    Do you believe that we will have robots as shown in movies, now that Moore's law is grinding to a halt?
    • baron816 10y ago
      I don't know if it's possible to build a robot like that. Or if will take a hundred years for the technology to evolve to get to the point that will make it possible. I know currently it's not even really possible to get a robot to do a simple task like folding a towel. It'll undoubtably be extremely difficult to make something that's useful and functional. But I think Apple needs to look to something that big if it wants to grow at a fast pace again.
  • bo1024 10y ago
    I don't like the idea of Apple making cars for the same reason I'm uncomfortable with their phones: you won't own the car you're purchasing, in most meaningful senses of the word "own". (We have seen this problem with Tesla already.) To your second point, I'm not sure that autonomous tech will be easily commoditizable. Some companies will have much better tech than others and consumers will prefer them. Think about internet search engines: The easiest of all industries to compete in, yet (or "thus") full of huge, monopolistic profits.
• stevewilhelm 10y ago
  I don't think Apple would necessarily have to build their own cars from scratch or solve the alternative fuel issue or deliver a self-driving car to have a significant impact on the automobile industry. For example, I would personally love a Subaru that had its information and entertainment systems designed and built by Apple and licensed to Subaru. It would also be cool if Apple's designers helped with the overall exterior and interior design.
  • gomox 10y ago
    Ha. If anyone can make a Subaru pretty and user-friendly it's the guys that originally made Unix work as a desktop OS.
• bresc 10y ago
  I have to ask: Why cars? Why are Google, Tesla and now Apple supposedly investing in cars? From the European point of view cars seem to be a dead end. More and more people live in an urban area and more and more young people use public transportation way more often, than cars. Additionally carsharing makes owning a car in a german city kinda obsolete. So... why cars?
  • gmarx 10y ago
    Imagine this future in Europe: pretty much no one owns a personal car. When you want to go somewhere you order a car on your phone and within 10 minutes a driverless car arrives and takes you to your detination. Your music plays through the sound system. The back seat is comfy and you have plenty of room to work or surf the internet. The trip could be to the hardware store, or hundreds of miles to visit family.
    • potatolicious 10y ago
      I feel like OP understands this - the questions is that why do any of that when the younger generation is rapidly urbanizing, in which case "order a car on your phone, wait 10 minutes" seems silly compared to "walk out front door, onto train, be at destination even sooner". The self-driving utopia is primarily a suburban-centric dream, in many European cities (and a small handful of American ones) it's likely to be less efficient than what already exists. Around here for example, the subway runs every 2-3 minutes and moves faster than cars - perhaps even self-driving ones. Trips are generally short enough that being able to work/surf the internet is a pretty marginal benefit, and the hardware store is so close that it would be nonsensical to use any vehicle to go there. All of the above pre-supposed long travel times and having to take a vehicle for even mundane every tasks - this is untrue for many cities, where cars (self-driving or otherwise) will likely be strictly inferior to the utility offered by walking or mass transit.
      • WalterSear 10y ago
        City subways systems take decades to build. Public transport is a shambles outside high density cities, and in many of those. Here in SF, it takes me an hour to get downtown by bus or subway, and 10-15 minutes by bus.
• anamoulous 10y ago
  Search engine.
• samsonradu 10y ago
  Until the next big thing comes, AAPL shares just hit 2year low so people might be losing their trust/patience.
• woodpanel 10y ago
  The author is correct that Apple is haunted by the iPhone's success. My 2 cents: 1) The car business delivers lower margins than the iPhone. Even if you compare them to those of premium car companies (like Range Rover, Audi, Mercedes, BMW or Lexus). 2) The iPhone didn't had comparable brands to compete against, when it entered the phone market. It came with a hefty price tag. A sum that was never even considered mass-marketable before. The iPhone created the premium sector for phones. It raised the share of income people considered plausible for cellphones. The author is also right in that apple is very good at applying their business model to new markets. But 3) to become premium in the car business either means - lowering their margins - producing cars that aim at a smaller/niche market (Porsche to Ferrari/McLaren), - lowering the costs of the supply chain currently in use by other premium car makers. The last one would be doable, certaintly by Apple. Certaintly with EVs. But I doubt it would be doable without any information leak other than this article. 4) More plausable for apple's margin territory would be an attempt at the user interface of cars. Like appleTv is for television sets or the healthKit-API. The problem with cars is not the getting-from-a-to-b-part, not the status-part or the comfortable-interior-part. The problem with cars is the user interface-part, it's the outdated-touchscreens-part or the connecting-and-charging-and-holding-your-phone-part. It's the car's software that sucks. And for some that sucking software includes the driving-yourself-part. Reaching out to current premium car-makers also points into this UI/API-direction. 5) Also there are a lot of lower hanging fruits out there, easier to tackle than building a premium car. Like VR or building physical television sets, home automation, healthcare - or wait, software.
• prawn 10y ago
  I suspect the Titan codename is a trick and they're actually working on single-occupant vehicles. HMD and transport are the obvious markets to tackle.
• thbb 10y ago
  Apple certainly does well in investing in R&D and looking towards some amount of pivoting. However, this quasi-exponential growth in spending reminds me of a pathetic moment at a EU commission meeting I attended, on research and innovation public funds in 2010. The EU commissioner basically complained that Europe had no Unicorns like the GAFAs, but wanted to be reassuring: this is about to change. We will prevail, because we'll spend more on R&D (through tax money) than all of these do together. With the implicit assumption that the more you spend, the bigger the returns.