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I genuinely do not understand Apple's move into this space. They've made a trillion dollar business out of small, high-margin electronics that consumers replac

by egd 8y ago

I genuinely do not understand Apple's move into this space. They've made a trillion dollar business out of small, high-margin electronics that consumers replace every couple year. Most of their products serve to enhance this business model or have high complementarity from a technology standpoint. The self-driving car project feels like an incredibly expensive diversion from this core business with limited technological overlap to their existing product lines. I'm trying not to see this as "Post-Jobs Apple finally jumps the shark," but I'm just not getting what the vision here is. This isn't snark, by the way - I'd really love to hear a good model for what they're doing.

staticassertion 8y ago
I'd imagine it's a matter of leveraging existing resources (or resources they could recoup by moving back to their core upon failure) for a chance at a massive, global business.
- monocasa 8y ago
  Or a new field means lots of potential patents to sit on.
  - staticassertion 8y ago
    But that's often the case. The thing is that 'smart cars' are not so different from where Apple is already comfortable, and where they want to move. Let's say they invest massive funds into ML, hardware, etc just to fail in the car market. They can recoup a lot of that by just taking the tech they've built and reinvesting it into their comfort zone.
    - computerex 8y ago
      How do you figure? Can you explain where the overlap is between Apple's current tech investments and autonomous vehicles?
      - gbear605 8y ago
        A lot of autonomous vehicles is the computer vision, which is also a significant thing that they're trying to do with the iPhone - AR.
- MBCook 8y ago
  That’s a good point. It’s going to be a long time before someone finds the next “iPhone“ that really changes everything and becomes a new multi hundred billion dollar business. Driverless cars are the only possibility I can think of right now.
Retric 8y ago
Apple does a lot of low level design work in the electronics, sensors, and AI space. They even work in the automotive space already with Apple CarPlay. (https://www.apple.com/ios/carplay/ https://www.apple.com/ios/carplay/) There are few companies that can afford to invest ~5 billion on a project that might be worth 10+x that or might be worth nothing. So, it’s both less of a stretch then you might think and less of a gamble than most other companies in this space are making.
twiceaday 8y ago
Apple has 285 billion dollars cash. They have enough money to do pretty much anything from scratch.
illumin8 8y ago
The main reason why Apple would be interested in self-driving cars is eyeballs. If we believe that self-driving cars are inevitable, whatever the timeframe, consumers will have a lot more free time while they are commuting, and guess what they'll do during that free time? That's right, they're going to want to watch movies, play games, and fiddle with apps, preferably on a big screen in their car. And guess who needs to be on those big screens in the car to stay relevant? That's right, carOS needs to be on that big screen in the car, or Apple should just cede the market to Google and accept inevitable irrelevance. This is an extremely strategic play that will develop over the next 10-20 years as more and more transportation is completely automated and large screens become ubiquitous.
- egd 8y ago
  They're not an ad company though - what are people going to do in their cars? Probably use their phones and tablets, and if Apple's got a lock on that, then who gives a damn about the car? It's the same reason there's not an Apple Television, there's an AppleTV - the display doesn't matter, the source does.
  - stiGGG 8y ago
    But who is saying they will build their own car? AppleTV is a good example, remember how long an actual Apple Television was rumoured?
    - tinus_hn 8y ago
      People wanted it to happen but it’d be a stupid product. How many people are going to buy a crazy expensive tv that is going to be obsolete in 3 years? Especially as you can just take out the part that becomes obsolete quickly and replace it separately.
- batteryhorse 8y ago
  > If we believe that self-driving cars are inevitable I am a programmer and I would never ever get in a self-driving car if I had a choice. I don't trust other programmers, I don't know if a backdoor has been put in by someone, and I don't want to get into a vehicle that can be hacked. I believe self-driving cars will be a catastrophic failure.
CharlesW 8y ago
> I genuinely do not understand Apple's move into this space. Many people didn't understand their move into MP3 players or mobile phones, either. If you take a step back, Apple is an "affordable luxury" technology products company with a heavy emphasis on design and user experience. In the luxury and "affordable luxury" tiers, cars are technology products with a heavy emphasis on design and user experience. Apple knows that smartphones, as we know them today, are likely to be an anachronism by 2030. The market for transportation is large enough to be interesting as a potential source of revenue when the iPhone cash cow falters.
- egd 8y ago
  Honestly, I agree with @saagarjha further down thread - I think things like AR and personal assistants are much closer to their core model. Grant the MP3 comparison, though - and that's why I'm trying to understand this. They've got smarter people than me pushing for this. That said, I do agree the idea that they're fundamentally a company good at making high-tech, well manufactured items cheaper and at a larger scale than anyone else can and extrapolating that to luxury cars as a market is a reasonable and possibly sufficient view of this.
  - origami777 8y ago
    Another way to look at it is that the entire relationship to personal transportation is going to be reinvented over the coming decades. It's going to be very profitable. And who knows where it will take us. I understand why lots of companies are betting the farm on it.
    - thx4allthestuff 8y ago
      Good point. What are people going to do when they’re sitting in their autonomous vehicles? Probably a great time to display an ad for the week’s best selling AR game.
      - Klover 8y ago
        What do commuters do now while using mass transportation? Read the news, read ads or social media, talk, work. You could say that Microsoft, Facebook, Google, Apple, and Samsung are already big in the “autonomous” section, in that they already provide the information, entertainment and work environment for commuters who do not drive to work. I think it’s only natural that those companies want to get in on the autonomous car industry, at least for the software side. I’m thinking that it might be more likely that companies who do hardware have a greater interest in it, but so far, from the 3 companies with a hardware side; Samsung mainly, but also Apple and Microsoft, only Apple seems to be putting research into autonomous cars. (I have too little knowledge about Huawei and other Chinese companies to know if they have the same possible reasons or approach) Perhaps driving to work is mostly an American thing and Samsung and Microsoft see the world going more towards increasing remote work, increasing mass transportation. It’ll be interesting to see the development. Maybe I will still be alive in 30 years to look back on this comment and see what happened.
newnewpdro 8y ago
What confuses me is why they aren't just bringing to market a classy simple EV with a giant ipad in the center console. This autonomous stuff is stupid. In the mean time people are buying more new ICE vehicles or a poorly made Tesla as a poor substitute for what they really want - a Tesla running iOS with an Apple logo.
- wilsonnb3 8y ago
  Partially because giant touchscreens in non self driving cars are a horrible UX. Also probably because they know they can't outcompete actual car makers at making cars.
  - newnewpdro 8y ago
    Apple could buy the actual car maker competition in cash if they needed to.
    - computerex 8y ago
      Apple can buy Toyota, BMW, Mercedes, Ford in cash? Today I learned.
      - kelnos 8y ago
        Ford's market cap is just under $38B. IIRC, Apple has >$250B cash on hand. Moving that money around (across borders) might be a little bit of a pain, but it's certainly doable.
      - newnewpdro 8y ago
        They could easily buy one to instantly become a major player. How much thicker do you think the margins would be on a Ford if it carried an Apple logo and access to their walled garden on the software end?
      - PeterisP 8y ago
        Yup, every one of these companies is valued less than Apple has in available cash.
Scoping_dindus 8y ago
I think autonomous vehicles is an early investor's game. Once there are rock solid models available, it'll be really hard for smaller corps to jump in. If you're sitting on billions, hell, you might as well get your feet wet and see what happens. People won't stop buying macs if apple ends up not ruling the autonomous vehicle space.
TangoTrotFox 8y ago
Because Microsoft. There was a time when Microsoft was practically printing money, even ignoring corporate contracts. People were cycling through their PCs at an extremely regular rate which in turn resulted in massive revenues for Microsoft as each new machine was accompied by a variety of licensed software. But then something happened. It wasn't long ago that a computer was outdated in 6 months and obsolete in 2 years. Now? You can buy a PC and, unless you either do high end gaming or engage in a handful of esoteric high performance tasks, it'll last indefinitely. Buy this new phone that's slightly faster and slightly thinner than the last one you bought is not a sustainable keystone business model. If they want to stay on top, they need to move on. But to what? Self driving cars seem like they stand a very good chance of being the next huge industry.
adrr 8y ago
Google and Apple have a theory of why it's important to control the autonomous car market. It may be tied to smartphones dominance just for the reason that the two market leaders in smartphone platforms are putting in significant capital into the field.
discordance 8y ago
I have a theory that it has to do with keeping Jonny Ive happy. It's well known that he loves cars. Perhaps he's bored and has taken on other projects to keep him at Apple (designing the new campus, Apple car).
- Fricken 8y ago
  Jobs, back when he was still breathing entertained notions of building a car, and I believe that when Tim Cook and Apple's executives make strategic decisions about the company's future, they're still asking themselves "What would Steve do?"
- kalleboo 8y ago
  This has been my pet theory as well. If Apple loses Ives their stock will tank so throwing a couple billion at a car project to keep him engaged is still a good investment (and if they're lucky it might even yield some valuable patents)
matwood 8y ago
> but I'm just not getting what the vision here is. A place where Apple is working hard to improve is maps. Instead of thinking of the self driving car project as something to sell, think of it as powering Apple Maps. Although it's probably cheaper to just pay a bunch of people to drive around the country 24/7/365.
tambourine_man 8y ago
If Apple could built a nice, reasonably priced electric car, it would sell like hot cakes, self driving notwithstanding
- Fricken 8y ago
  In Jony Ive's words, a robotaxi presents Apple's best opportunity to "Reinvent the mobility experience" A couple years ago amid reports that project Titan was an gigantic, unfocused clusterfuck, there were rumours of a rift between project lead Steve Zadesky and Jony Ivy backed by a bunch of top engineers about whether to build a more conventional vehicle for private ownership or to work towards an autonomous mobility service, and that they were going in two opposing directions at once, before doing a reboot.
bradbatt 8y ago
> I genuinely do not understand Apple's move into this space There are only so many markets big enough for Apple to consider entering. Cars is one of them. Banking is another. They're allowing people to pay by phone now through credit cards. One day soon it will be an easy transition to just keeping your money in Apple Bank.
- kalleboo 8y ago
  You can already keep a cash balance with Apple using Apple Pay Cash https://support.apple.com/explore/apple-pay-cash https://support.apple.com/explore/apple-pay-cash
skywhopper 8y ago
I'm not sure "incredibly expensive" is a thing that Apple needs to care about per se. They are the most profitable company in the world. They have so much cash on hand, coming in so quickly, that they are desperate to find ways to productively spend it. From that point of view, a possibly multi-decade-long "incredibly expensive" R&D process to try to tackle an impossible market (I'm thinking ultimately they would want to make the cars themselves, not just self-driving software) is not entirely ludicrous. That said, I can't map this vision of Apple as a company with too much money to spend looking for new markets with the Apple that can't be bothered to update its desktop computers and who bailed on the wireless router market. If there's any company that has the resources and vision to create the components for an actually useful and productive Connected Home, I would have expected it to be Apple. And I would have thought home servers (in the form of a beefier Mac Mini, maybe) and no-nonsense self-meshing wifi routers (the products they already had) would have been the perfect platform to build on. But they really do seem to have hit some sort of practical limit on how many things they can do at once within their current corporate structure.
flycaliguy 8y ago
My read has always been that they are preparing to provide a luxury/high status product in a future market which will be dominated by whatever the “android” level brand is. Cars are such a strong status symbol that Apple can’t resist. If these vehicles become the next huge computing platform, they have no choice.
ddebernardy 8y ago
> I genuinely do not understand Apple's move into this space. When operating a $200 billion/year business and needing to grow, entering a $X billion/year market will barely move your needle if $X is too small. There are only so many large consumer industries (current or future) that Apple can pick to enter.
stevep98 8y ago
What are the biggest purchases people make? Of those, is there a high-end product which does apple can apply their middle-high end design chop to see a signficant profit? How will Apple grow from a $1T to a $5T, and $50T company? My speculation: cars, houses (or likely condos with Apple financing), then communities (like Disney/Celebration) and Cities. All designed by Apple, with everybody living the Apple way.
- ianamartin 8y ago
  The easy and glib way for Apple to get to a 5 trillion valuation is for the market to give them a p/e ratio like they give Amazon. If market analysts were sane, Apple would've hit the 5 trillion mark a while ago. But it's a stupefying number that isn't worth talking about. Apple is bad at growth. Apple is very good at profit. To them, that's all that matters, and that's not going to change. I think we'll never see Apple valued at 5T because Apple will increase buyback programs and go totally private within 10 years. Exactly because they don't want to have to deal with people who talk about a 50 trillion valuation like it's a thing that better happen or else.
  - microtherion 8y ago
    > The easy and glib way for Apple to get to a 5 trillion valuation is for the market to give them a p/e ratio like they give Amazon. If market analysts were sane, Apple would've hit the 5 trillion mark a while ago. At Amazon's P/E, Apple would be worth about $8T. But I don't think "sane analysis" and "Amazon P/E" are a good fit. > Apple is bad at growth. Apple is very good at profit. I've been wondering about this for a while, so I finally bothered to look up some numbers: 2004-2017, Amazon revenue grew from $6.92B to $177.87B, at 28% per year: https://www.statista.com/statistics/266282/annual-net-revenue-of-amazoncom/ https://www.statista.com/statistics/266282/annual-net-revenu... During that time, Apple revenue grew from $8.2B to $222.23B, at... 29% a year: https://www.statista.com/statistics/265125/total-net-sales-of-apple-since-2004/ https://www.statista.com/statistics/265125/total-net-sales-o... Obviously, these numbers are quite sensitive to starting and ending points, but to me, it looks like Apple has managed to grow at the same overall rate as Amazon, while being massively more profitable.
briandear 8y ago
It’s about inventing a future we want to inhabit — not just selling phones.
fh973 8y ago
They don't have choice. They need new billion dollar businesses and as soon one new thing with potential they have to jump on it. And self driving cars is one that to "investors" promises a huge potential. That's why Amazon Google and Apple did tablets, home automation, ... I don't think they seriously think it's the next big thing, but they don't have alternatives to invest in that promise growth.
millstone 8y ago
At Apple's scale the calculus becomes almost simple: which economic sectors are large enough to move the needle? Answers: health care and pharma, finance and real estate, energy and petroleum, government and defense, and transportation. Of these only transportation and perhaps health care make any sense for Apple, given their core competencies.
- ianamartin 8y ago
  But Apple is either in or getting into healthcare, finance, real estate, and energy though. Apple is a huge consumer of eco-friendly power and builds farms simply for producing the power it needs with no carbon emissions. It is in the finance space indirectly by running the app stores, and directly with Apple pay. It's in the health industry by pushing people to collect health data on their phones and watches. Apple is a big player in real estate markets. That's where it puts stores. I totally agree with you that those are the big sectors Apple can use to move the needle. My only disagreement is that you think only one is tenable. I think all of them but government/defense are realistic. I don't see a future where Tim Cook lets Apple get into world-building. But other than that, Apple is already there. Transportation is the straggler.
  - microtherion 8y ago
    In addition to your list (and I tend to think the potential of Apple Pay is still really underrated), Apple owns Braeburn Capital. Whether Apple wants to or not, by running a fund with $250B+ of assets, it's a fairly sizable player in finance.
    - ianamartin 8y ago
      I had completely forgotten about that. Good point. Do you happen to know how Braeburn compares to other big name funds?
mygo 8y ago
does your Toyota automatically unlock when you simply walk up and look at it? can it remote-start just by you hollering at it? Does it open the trunk just by you saying “open the trunk”? Or wait, you actually still even have a car key? What are you still using a flip phone too? hah. jokes aside, they develop a lot of low-level electronics and operating systems. and they have an AI with arguably the largest voice training. And they have Maps, with lots of real-world travel data. They know which roads are the best and the worst to use for a route. They know when traffic is congested. they know where you’ll need to be and where you’ll be leaving from. They know when your kids get off from school and how they look like. Speaking of sensors, their devices have the most advanced sensors. There are so many different kinds of sensors crammed into the iPhoneX. The best self-driving car sensors use IR, and apple’s already using IR on face-ID. I don’t see why they wouldn’t they be able to develop reliable sensor technologies for cars, given enough time. They don’t have to be the first movers. They’re probably just starting now and maturing the self driving tech and will be ready to respond to how the market develops. Apple partnered with AT&T to get the iPhone out. They could partner with an auto manufacturer for a self driving car.
- 05 8y ago
  “The best self-driving car sensors use IR, and apple’s already using IR on face-ID.” Comparing structured light Kinect with time of flight lidar is apples to oranges.
  - mygo 8y ago
    I see what you did there ;). Anyways they can develop this technology given enough time. They do not have to be the first movers. A little R&D won’t starve their coffers.
singularity2001 8y ago
Exploring new verticals might make sense, which is why I am still surprised they didn't capture the high-end TV market long ago.
sah2ed 8y ago
As we advance as a civilization, our tools have evolved along with us. The invention of electronics combined with electricity meant that we could augment or replace tools that traditionally were mechanical in nature, and thus required some maintenance by the owner. (A good example being the mechanical wrist watch which transitioned from manual winding to battery power; timekeeping transitioning from mechanical to quartz crystals; and the clock face transitioning from moving hands to LCD). The invention of general-purpose computing meant that we could slowly tack on "smartness" to new and existing tools that had become electronic. Apple (originally named Apple Computer) rides on this second shift enabled by the invention of the general-purpose computer -- by using technology to allow us to do more with less. From my observation of Apple, it appears they view the world exclusively through this lens -- where they completely re-imagine our daily tools to make them more useful, more life-enriching, by putting a general-purpose computer at its core. In other words, Apple's unstated mission is to enrich lives using technologies we interact with on a daily basis by designing tools with a computer at the core rather than as an afterthought like other manufacturers. In addition, they try to differentiate themselves from everyone else by shipping devices that are not only beautiful to behold but also well-thought out in terms of ease of use. Sometimes they succeed wildly like with the iPhone. Sometimes they don't.
jfoster 8y ago
This technology is probably the most valuable thing a company can invest in at the moment. Imagine all of the car trips around the world being turned into profitable trips for a company, and imagine this being to the benefit of consumers. Owning a car is expensive; these companies can likely undercut car ownership cost and still make a profit. The savings would come from insurance & fuel efficiencies. Some people will claim they'll never give up on car ownership, but that's just based on the current context. On the timespan of decades, people will be less attached to the idea of car ownership. Companies like Apple & Google are uniquely suited to this problem just by having lots of talented software engineers who know about artificial intelligence. The fact that it has nothing to do with their existing businesses doesn't matter too much; it might end up being a lot bigger than their existing businesses.
- slededit 8y ago
  People don't own cars because they are cheaper. They own them for flexibility - which is why SUVs outsell compacts 10:1 despite worse gas mileage and higher prices. Competing solely on cost is a losing battle and has been since GM overtook ford in the '30s by offering style over pure function. Cars are fashion, and convenience. Even if an uber was cheaper I wouldn't wait 5 minutes for one outside a store.
  - jfoster 8y ago
    If you take an efficient autonomous ride share, you'd gain some conveniences: No need to get a license, no need to do car registration, no need to insure your vehicle, no need to pay attention whilst driving, no need to find parking, no need to refuel/charge, no need to have the car maintained, no such thing as owning a car that has broken down, no need to change a busted tyre, and the list goes on. You might need to wait a minute or two for the cheaper ride to arrive, though. Time will tell whether that's a bias based on our current context or a natural preference.
    - slededit 8y ago
      I get all those from the bus but people still don't take public transit. The wait is truly the killer - not cost.
Numberwang 8y ago
They should have moved into health and personal medicine instead.
Sileni 8y ago
It's such a large commercial space that ending up with even a few useful patents when the first full system comes out is worthwhile. Either sell the patents or use them as leverage. With Apple's cash reserves, they can afford the risk. The chance of shooting the moon is worth it.
csomar 8y ago
I think the big "guys" sees it as the next possible thing. I mean quantum computers might be a reality but you can't currently bet on that happening in the next 5 years. Self-driving cars are currently not there yet. However, it seems that it could work given enough research and development. Self-driving cars is a huge business. You could disrupt Uber, Taxis, Trucking and Public transportation in most of the developed world by a single solution. That's a trillion dollar business.
rjvs 8y ago
I don’t recall the specific numbers anymore but the amount of metal that Apple machines, transports and sells each year is similar to a smaller car company. Why should those pieces of metal only be small?
deleted 8y ago
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jhgg 8y ago
Perhaps I’m a bit simpleminded here, but the answer to me seems pretty obvious. A lot of people spend a lot of time driving places. You can’t use your iDevice while driving. But you could if you had a self driving car. Owning an autonomous vehicle would open up a bit more free time in one’s day to use consume content and use apps. Which seems like something that might benefit Apple. Whether they actually produce a car, or just license the software that powers the car, or contributes their research to the industry as a whole, self driving vehicles seem strongly in Apple’s favor.
roenxi 8y ago
Doubly baffling when considered that the revolutionary trio of iPod, iPhone and iPad look, with eyes crossed and no glasses, remarkably like 3x sizes of a single product and at one point you could represent most of their profits with one small table of products. Apple isn't known for diversity. If the defining feature of cars is engine or physical design, Apple doesn't have a chance; it isn't like traditional industrial companies don't have smart and talented engineers - the Apple of cars already happened with Toyota and their inspired manufacturing process. Apple does have a chance if software is the hardest part of designing the car of the future. In a world where Apple fields a good all-round car with great software, and the software notably improves the driving experience in a difficult-to-mimic fashion, then maybe Apple can find a margin. It is an ambitious play. If they can't differentiate themselves with software it isn't going to be a winner for them. But if they can, it would fit very well with the Apple model of entering a market that was understood to be mature and demonstrating massive profits for well-designed software/hardware combinations. Driving cars in 2018 is like 20c/texts when using the phones of 2006 - if that chore went away, we wouldn't miss it.
tstegart 8y ago
You could think about it this way: the mechanical parts of cars are all the same-ish (and Apple is planning on them being commodities). So when self-driving cars show up, the only thing to differentiate them will be the software, and Apple is planning on controlling it. If you hop in a self-driving car, then hop out at your destination, the only parts you have connection with is the seating and the software.
tim333 8y ago
Well, for a long time their name was Apple Computer and throughout their history they've basically made computers in different form factors - first desktop then laptop then music player form, phone form, tablet form and watch form. It now seems cars are going to become basically computer systems with wheels attached so it may make sense for them to get in on that.

by egd 8y ago

staticassertion 8y ago

I'd imagine it's a matter of leveraging existing resources (or resources they could recoup by moving back to their core upon failure) for a chance at a massive, global business.

monocasa 8y ago
Or a new field means lots of potential patents to sit on.
- staticassertion 8y ago
  But that's often the case. The thing is that 'smart cars' are not so different from where Apple is already comfortable, and where they want to move. Let's say they invest massive funds into ML, hardware, etc just to fail in the car market. They can recoup a lot of that by just taking the tech they've built and reinvesting it into their comfort zone.
  - computerex 8y ago
    How do you figure? Can you explain where the overlap is between Apple's current tech investments and autonomous vehicles?
    - gbear605 8y ago
      A lot of autonomous vehicles is the computer vision, which is also a significant thing that they're trying to do with the iPhone - AR.
MBCook 8y ago
That’s a good point. It’s going to be a long time before someone finds the next “iPhone“ that really changes everything and becomes a new multi hundred billion dollar business. Driverless cars are the only possibility I can think of right now.

Retric 8y ago

Apple does a lot of low level design work in the electronics, sensors, and AI space. They even work in the automotive space already with Apple CarPlay. (https://www.apple.com/ios/carplay/ https://www.apple.com/ios/carplay/) There are few companies that can afford to invest ~5 billion on a project that might be worth 10+x that or might be worth nothing. So, it’s both less of a stretch then you might think and less of a gamble than most other companies in this space are making.

twiceaday 8y ago

Apple has 285 billion dollars cash. They have enough money to do pretty much anything from scratch.

illumin8 8y ago

The main reason why Apple would be interested in self-driving cars is eyeballs. If we believe that self-driving cars are inevitable, whatever the timeframe, consumers will have a lot more free time while they are commuting, and guess what they'll do during that free time? That's right, they're going to want to watch movies, play games, and fiddle with apps, preferably on a big screen in their car. And guess who needs to be on those big screens in the car to stay relevant? That's right, carOS needs to be on that big screen in the car, or Apple should just cede the market to Google and accept inevitable irrelevance. This is an extremely strategic play that will develop over the next 10-20 years as more and more transportation is completely automated and large screens become ubiquitous.

egd 8y ago
They're not an ad company though - what are people going to do in their cars? Probably use their phones and tablets, and if Apple's got a lock on that, then who gives a damn about the car? It's the same reason there's not an Apple Television, there's an AppleTV - the display doesn't matter, the source does.
- stiGGG 8y ago
  But who is saying they will build their own car? AppleTV is a good example, remember how long an actual Apple Television was rumoured?
  - tinus_hn 8y ago
    People wanted it to happen but it’d be a stupid product. How many people are going to buy a crazy expensive tv that is going to be obsolete in 3 years? Especially as you can just take out the part that becomes obsolete quickly and replace it separately.
batteryhorse 8y ago
> If we believe that self-driving cars are inevitable I am a programmer and I would never ever get in a self-driving car if I had a choice. I don't trust other programmers, I don't know if a backdoor has been put in by someone, and I don't want to get into a vehicle that can be hacked. I believe self-driving cars will be a catastrophic failure.

CharlesW 8y ago

> I genuinely do not understand Apple's move into this space. Many people didn't understand their move into MP3 players or mobile phones, either. If you take a step back, Apple is an "affordable luxury" technology products company with a heavy emphasis on design and user experience. In the luxury and "affordable luxury" tiers, cars are technology products with a heavy emphasis on design and user experience. Apple knows that smartphones, as we know them today, are likely to be an anachronism by 2030. The market for transportation is large enough to be interesting as a potential source of revenue when the iPhone cash cow falters.

egd 8y ago
Honestly, I agree with @saagarjha further down thread - I think things like AR and personal assistants are much closer to their core model. Grant the MP3 comparison, though - and that's why I'm trying to understand this. They've got smarter people than me pushing for this. That said, I do agree the idea that they're fundamentally a company good at making high-tech, well manufactured items cheaper and at a larger scale than anyone else can and extrapolating that to luxury cars as a market is a reasonable and possibly sufficient view of this.
- origami777 8y ago
  Another way to look at it is that the entire relationship to personal transportation is going to be reinvented over the coming decades. It's going to be very profitable. And who knows where it will take us. I understand why lots of companies are betting the farm on it.
  - thx4allthestuff 8y ago
    Good point. What are people going to do when they’re sitting in their autonomous vehicles? Probably a great time to display an ad for the week’s best selling AR game.
    - Klover 8y ago
      What do commuters do now while using mass transportation? Read the news, read ads or social media, talk, work. You could say that Microsoft, Facebook, Google, Apple, and Samsung are already big in the “autonomous” section, in that they already provide the information, entertainment and work environment for commuters who do not drive to work. I think it’s only natural that those companies want to get in on the autonomous car industry, at least for the software side. I’m thinking that it might be more likely that companies who do hardware have a greater interest in it, but so far, from the 3 companies with a hardware side; Samsung mainly, but also Apple and Microsoft, only Apple seems to be putting research into autonomous cars. (I have too little knowledge about Huawei and other Chinese companies to know if they have the same possible reasons or approach) Perhaps driving to work is mostly an American thing and Samsung and Microsoft see the world going more towards increasing remote work, increasing mass transportation. It’ll be interesting to see the development. Maybe I will still be alive in 30 years to look back on this comment and see what happened.

newnewpdro 8y ago

What confuses me is why they aren't just bringing to market a classy simple EV with a giant ipad in the center console. This autonomous stuff is stupid. In the mean time people are buying more new ICE vehicles or a poorly made Tesla as a poor substitute for what they really want - a Tesla running iOS with an Apple logo.

wilsonnb3 8y ago
Partially because giant touchscreens in non self driving cars are a horrible UX. Also probably because they know they can't outcompete actual car makers at making cars.
- newnewpdro 8y ago
  Apple could buy the actual car maker competition in cash if they needed to.
  - computerex 8y ago
    Apple can buy Toyota, BMW, Mercedes, Ford in cash? Today I learned.
    - kelnos 8y ago
      Ford's market cap is just under $38B. IIRC, Apple has >$250B cash on hand. Moving that money around (across borders) might be a little bit of a pain, but it's certainly doable.
    - newnewpdro 8y ago
      They could easily buy one to instantly become a major player. How much thicker do you think the margins would be on a Ford if it carried an Apple logo and access to their walled garden on the software end?
    - PeterisP 8y ago
      Yup, every one of these companies is valued less than Apple has in available cash.

Scoping_dindus 8y ago

I think autonomous vehicles is an early investor's game. Once there are rock solid models available, it'll be really hard for smaller corps to jump in. If you're sitting on billions, hell, you might as well get your feet wet and see what happens. People won't stop buying macs if apple ends up not ruling the autonomous vehicle space.

TangoTrotFox 8y ago

Because Microsoft. There was a time when Microsoft was practically printing money, even ignoring corporate contracts. People were cycling through their PCs at an extremely regular rate which in turn resulted in massive revenues for Microsoft as each new machine was accompied by a variety of licensed software. But then something happened. It wasn't long ago that a computer was outdated in 6 months and obsolete in 2 years. Now? You can buy a PC and, unless you either do high end gaming or engage in a handful of esoteric high performance tasks, it'll last indefinitely. Buy this new phone that's slightly faster and slightly thinner than the last one you bought is not a sustainable keystone business model. If they want to stay on top, they need to move on. But to what? Self driving cars seem like they stand a very good chance of being the next huge industry.

adrr 8y ago

Google and Apple have a theory of why it's important to control the autonomous car market. It may be tied to smartphones dominance just for the reason that the two market leaders in smartphone platforms are putting in significant capital into the field.

discordance 8y ago

I have a theory that it has to do with keeping Jonny Ive happy. It's well known that he loves cars. Perhaps he's bored and has taken on other projects to keep him at Apple (designing the new campus, Apple car).

Fricken 8y ago
Jobs, back when he was still breathing entertained notions of building a car, and I believe that when Tim Cook and Apple's executives make strategic decisions about the company's future, they're still asking themselves "What would Steve do?"
kalleboo 8y ago
This has been my pet theory as well. If Apple loses Ives their stock will tank so throwing a couple billion at a car project to keep him engaged is still a good investment (and if they're lucky it might even yield some valuable patents)

matwood 8y ago

> but I'm just not getting what the vision here is. A place where Apple is working hard to improve is maps. Instead of thinking of the self driving car project as something to sell, think of it as powering Apple Maps. Although it's probably cheaper to just pay a bunch of people to drive around the country 24/7/365.

tambourine_man 8y ago

If Apple could built a nice, reasonably priced electric car, it would sell like hot cakes, self driving notwithstanding

Fricken 8y ago
In Jony Ive's words, a robotaxi presents Apple's best opportunity to "Reinvent the mobility experience" A couple years ago amid reports that project Titan was an gigantic, unfocused clusterfuck, there were rumours of a rift between project lead Steve Zadesky and Jony Ivy backed by a bunch of top engineers about whether to build a more conventional vehicle for private ownership or to work towards an autonomous mobility service, and that they were going in two opposing directions at once, before doing a reboot.

bradbatt 8y ago

> I genuinely do not understand Apple's move into this space There are only so many markets big enough for Apple to consider entering. Cars is one of them. Banking is another. They're allowing people to pay by phone now through credit cards. One day soon it will be an easy transition to just keeping your money in Apple Bank.

kalleboo 8y ago
You can already keep a cash balance with Apple using Apple Pay Cash https://support.apple.com/explore/apple-pay-cash https://support.apple.com/explore/apple-pay-cash

skywhopper 8y ago

I'm not sure "incredibly expensive" is a thing that Apple needs to care about per se. They are the most profitable company in the world. They have so much cash on hand, coming in so quickly, that they are desperate to find ways to productively spend it. From that point of view, a possibly multi-decade-long "incredibly expensive" R&D process to try to tackle an impossible market (I'm thinking ultimately they would want to make the cars themselves, not just self-driving software) is not entirely ludicrous. That said, I can't map this vision of Apple as a company with too much money to spend looking for new markets with the Apple that can't be bothered to update its desktop computers and who bailed on the wireless router market. If there's any company that has the resources and vision to create the components for an actually useful and productive Connected Home, I would have expected it to be Apple. And I would have thought home servers (in the form of a beefier Mac Mini, maybe) and no-nonsense self-meshing wifi routers (the products they already had) would have been the perfect platform to build on. But they really do seem to have hit some sort of practical limit on how many things they can do at once within their current corporate structure.

flycaliguy 8y ago

My read has always been that they are preparing to provide a luxury/high status product in a future market which will be dominated by whatever the “android” level brand is. Cars are such a strong status symbol that Apple can’t resist. If these vehicles become the next huge computing platform, they have no choice.

ddebernardy 8y ago

> I genuinely do not understand Apple's move into this space. When operating a $200 billion/year business and needing to grow, entering a $X billion/year market will barely move your needle if $X is too small. There are only so many large consumer industries (current or future) that Apple can pick to enter.

stevep98 8y ago

What are the biggest purchases people make? Of those, is there a high-end product which does apple can apply their middle-high end design chop to see a signficant profit? How will Apple grow from a $1T to a $5T, and $50T company? My speculation: cars, houses (or likely condos with Apple financing), then communities (like Disney/Celebration) and Cities. All designed by Apple, with everybody living the Apple way.

ianamartin 8y ago
The easy and glib way for Apple to get to a 5 trillion valuation is for the market to give them a p/e ratio like they give Amazon. If market analysts were sane, Apple would've hit the 5 trillion mark a while ago. But it's a stupefying number that isn't worth talking about. Apple is bad at growth. Apple is very good at profit. To them, that's all that matters, and that's not going to change. I think we'll never see Apple valued at 5T because Apple will increase buyback programs and go totally private within 10 years. Exactly because they don't want to have to deal with people who talk about a 50 trillion valuation like it's a thing that better happen or else.
- microtherion 8y ago
  > The easy and glib way for Apple to get to a 5 trillion valuation is for the market to give them a p/e ratio like they give Amazon. If market analysts were sane, Apple would've hit the 5 trillion mark a while ago. At Amazon's P/E, Apple would be worth about $8T. But I don't think "sane analysis" and "Amazon P/E" are a good fit. > Apple is bad at growth. Apple is very good at profit. I've been wondering about this for a while, so I finally bothered to look up some numbers: 2004-2017, Amazon revenue grew from $6.92B to $177.87B, at 28% per year: https://www.statista.com/statistics/266282/annual-net-revenue-of-amazoncom/ https://www.statista.com/statistics/266282/annual-net-revenu... During that time, Apple revenue grew from $8.2B to $222.23B, at... 29% a year: https://www.statista.com/statistics/265125/total-net-sales-of-apple-since-2004/ https://www.statista.com/statistics/265125/total-net-sales-o... Obviously, these numbers are quite sensitive to starting and ending points, but to me, it looks like Apple has managed to grow at the same overall rate as Amazon, while being massively more profitable.

briandear 8y ago

It’s about inventing a future we want to inhabit — not just selling phones.

fh973 8y ago

They don't have choice. They need new billion dollar businesses and as soon one new thing with potential they have to jump on it. And self driving cars is one that to "investors" promises a huge potential. That's why Amazon Google and Apple did tablets, home automation, ... I don't think they seriously think it's the next big thing, but they don't have alternatives to invest in that promise growth.

millstone 8y ago

At Apple's scale the calculus becomes almost simple: which economic sectors are large enough to move the needle? Answers: health care and pharma, finance and real estate, energy and petroleum, government and defense, and transportation. Of these only transportation and perhaps health care make any sense for Apple, given their core competencies.

ianamartin 8y ago
But Apple is either in or getting into healthcare, finance, real estate, and energy though. Apple is a huge consumer of eco-friendly power and builds farms simply for producing the power it needs with no carbon emissions. It is in the finance space indirectly by running the app stores, and directly with Apple pay. It's in the health industry by pushing people to collect health data on their phones and watches. Apple is a big player in real estate markets. That's where it puts stores. I totally agree with you that those are the big sectors Apple can use to move the needle. My only disagreement is that you think only one is tenable. I think all of them but government/defense are realistic. I don't see a future where Tim Cook lets Apple get into world-building. But other than that, Apple is already there. Transportation is the straggler.
- microtherion 8y ago
  In addition to your list (and I tend to think the potential of Apple Pay is still really underrated), Apple owns Braeburn Capital. Whether Apple wants to or not, by running a fund with $250B+ of assets, it's a fairly sizable player in finance.
  - ianamartin 8y ago
    I had completely forgotten about that. Good point. Do you happen to know how Braeburn compares to other big name funds?

mygo 8y ago

does your Toyota automatically unlock when you simply walk up and look at it? can it remote-start just by you hollering at it? Does it open the trunk just by you saying “open the trunk”? Or wait, you actually still even have a car key? What are you still using a flip phone too? hah. jokes aside, they develop a lot of low-level electronics and operating systems. and they have an AI with arguably the largest voice training. And they have Maps, with lots of real-world travel data. They know which roads are the best and the worst to use for a route. They know when traffic is congested. they know where you’ll need to be and where you’ll be leaving from. They know when your kids get off from school and how they look like. Speaking of sensors, their devices have the most advanced sensors. There are so many different kinds of sensors crammed into the iPhoneX. The best self-driving car sensors use IR, and apple’s already using IR on face-ID. I don’t see why they wouldn’t they be able to develop reliable sensor technologies for cars, given enough time. They don’t have to be the first movers. They’re probably just starting now and maturing the self driving tech and will be ready to respond to how the market develops. Apple partnered with AT&T to get the iPhone out. They could partner with an auto manufacturer for a self driving car.

05 8y ago
“The best self-driving car sensors use IR, and apple’s already using IR on face-ID.” Comparing structured light Kinect with time of flight lidar is apples to oranges.
- mygo 8y ago
  I see what you did there ;). Anyways they can develop this technology given enough time. They do not have to be the first movers. A little R&D won’t starve their coffers.

singularity2001 8y ago

Exploring new verticals might make sense, which is why I am still surprised they didn't capture the high-end TV market long ago.

sah2ed 8y ago

As we advance as a civilization, our tools have evolved along with us. The invention of electronics combined with electricity meant that we could augment or replace tools that traditionally were mechanical in nature, and thus required some maintenance by the owner. (A good example being the mechanical wrist watch which transitioned from manual winding to battery power; timekeeping transitioning from mechanical to quartz crystals; and the clock face transitioning from moving hands to LCD). The invention of general-purpose computing meant that we could slowly tack on "smartness" to new and existing tools that had become electronic. Apple (originally named Apple Computer) rides on this second shift enabled by the invention of the general-purpose computer -- by using technology to allow us to do more with less. From my observation of Apple, it appears they view the world exclusively through this lens -- where they completely re-imagine our daily tools to make them more useful, more life-enriching, by putting a general-purpose computer at its core. In other words, Apple's unstated mission is to enrich lives using technologies we interact with on a daily basis by designing tools with a computer at the core rather than as an afterthought like other manufacturers. In addition, they try to differentiate themselves from everyone else by shipping devices that are not only beautiful to behold but also well-thought out in terms of ease of use. Sometimes they succeed wildly like with the iPhone. Sometimes they don't.

jfoster 8y ago

This technology is probably the most valuable thing a company can invest in at the moment. Imagine all of the car trips around the world being turned into profitable trips for a company, and imagine this being to the benefit of consumers. Owning a car is expensive; these companies can likely undercut car ownership cost and still make a profit. The savings would come from insurance & fuel efficiencies. Some people will claim they'll never give up on car ownership, but that's just based on the current context. On the timespan of decades, people will be less attached to the idea of car ownership. Companies like Apple & Google are uniquely suited to this problem just by having lots of talented software engineers who know about artificial intelligence. The fact that it has nothing to do with their existing businesses doesn't matter too much; it might end up being a lot bigger than their existing businesses.

slededit 8y ago
People don't own cars because they are cheaper. They own them for flexibility - which is why SUVs outsell compacts 10:1 despite worse gas mileage and higher prices. Competing solely on cost is a losing battle and has been since GM overtook ford in the '30s by offering style over pure function. Cars are fashion, and convenience. Even if an uber was cheaper I wouldn't wait 5 minutes for one outside a store.
- jfoster 8y ago
  If you take an efficient autonomous ride share, you'd gain some conveniences: No need to get a license, no need to do car registration, no need to insure your vehicle, no need to pay attention whilst driving, no need to find parking, no need to refuel/charge, no need to have the car maintained, no such thing as owning a car that has broken down, no need to change a busted tyre, and the list goes on. You might need to wait a minute or two for the cheaper ride to arrive, though. Time will tell whether that's a bias based on our current context or a natural preference.
  - slededit 8y ago
    I get all those from the bus but people still don't take public transit. The wait is truly the killer - not cost.

Numberwang 8y ago

They should have moved into health and personal medicine instead.

Sileni 8y ago

It's such a large commercial space that ending up with even a few useful patents when the first full system comes out is worthwhile. Either sell the patents or use them as leverage. With Apple's cash reserves, they can afford the risk. The chance of shooting the moon is worth it.

csomar 8y ago

I think the big "guys" sees it as the next possible thing. I mean quantum computers might be a reality but you can't currently bet on that happening in the next 5 years. Self-driving cars are currently not there yet. However, it seems that it could work given enough research and development. Self-driving cars is a huge business. You could disrupt Uber, Taxis, Trucking and Public transportation in most of the developed world by a single solution. That's a trillion dollar business.

rjvs 8y ago

I don’t recall the specific numbers anymore but the amount of metal that Apple machines, transports and sells each year is similar to a smaller car company. Why should those pieces of metal only be small?

deleted 8y ago

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jhgg 8y ago

Perhaps I’m a bit simpleminded here, but the answer to me seems pretty obvious. A lot of people spend a lot of time driving places. You can’t use your iDevice while driving. But you could if you had a self driving car. Owning an autonomous vehicle would open up a bit more free time in one’s day to use consume content and use apps. Which seems like something that might benefit Apple. Whether they actually produce a car, or just license the software that powers the car, or contributes their research to the industry as a whole, self driving vehicles seem strongly in Apple’s favor.

roenxi 8y ago

Doubly baffling when considered that the revolutionary trio of iPod, iPhone and iPad look, with eyes crossed and no glasses, remarkably like 3x sizes of a single product and at one point you could represent most of their profits with one small table of products. Apple isn't known for diversity. If the defining feature of cars is engine or physical design, Apple doesn't have a chance; it isn't like traditional industrial companies don't have smart and talented engineers - the Apple of cars already happened with Toyota and their inspired manufacturing process. Apple does have a chance if software is the hardest part of designing the car of the future. In a world where Apple fields a good all-round car with great software, and the software notably improves the driving experience in a difficult-to-mimic fashion, then maybe Apple can find a margin. It is an ambitious play. If they can't differentiate themselves with software it isn't going to be a winner for them. But if they can, it would fit very well with the Apple model of entering a market that was understood to be mature and demonstrating massive profits for well-designed software/hardware combinations. Driving cars in 2018 is like 20c/texts when using the phones of 2006 - if that chore went away, we wouldn't miss it.

tstegart 8y ago

You could think about it this way: the mechanical parts of cars are all the same-ish (and Apple is planning on them being commodities). So when self-driving cars show up, the only thing to differentiate them will be the software, and Apple is planning on controlling it. If you hop in a self-driving car, then hop out at your destination, the only parts you have connection with is the seating and the software.

tim333 8y ago

Well, for a long time their name was Apple Computer and throughout their history they've basically made computers in different form factors - first desktop then laptop then music player form, phone form, tablet form and watch form. It now seems cars are going to become basically computer systems with wheels attached so it may make sense for them to get in on that.