
More Apple Car Thoughts: Money, Design UI, Distribution - subnaught
http://www.mondaynote.com/2015/11/30/more-apple-car-thoughts/
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Aloha
If I were producing a car, I'd look into vehicle as a service.

Which means, one monthly price, a lease like object (but without mileage
limits), insurance and any maintenance is included, and when the period over
(say 24 months), you can return it or trade it in on a new model for a small
fee. In a smart world, the cars wouldn't even need to be totally new, they
could go thru a re-manufacturing process to replace most wearable components
(like the interior, tires, and possibly repainting).

Apple does two things really well, it makes very pretty products, but it also
makes products that are generally less complex in use. The most complex part
about automobile ownership is the purchase process (and insurance too), if you
can remove the complexity, you can make a much better customer experience.

~~~
mkempe
Apple has indeed started down the path of iPhone leasing.

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LukaAl
From one point of view I don't buy in the skepticism surrounding an Apple Car.
As many issue could exist, and this article present a long list, Apple has the
resources and the capabilities to overcome them.

The problem for Apple right now is that is so huge that any business idea is
so small in scale that doesn't move the needle. I mean a 1 billion dollar idea
is a great pitch, but for Apple is less the 0.5% in revenue, doesn't make the
board level.

From this point of view there are very few industry where you could venture
with such a huge scale. The automotive industry is one of them and appears to
be ready for disruption. The problem as mentioned in the article is the
incredibly low margin. I don't believe you could cut a lot on the cost of
production, years of experience have optimized the process an the material
that get into a car is that much, you could reduce them by a lot without
impacting safety. Apple could try to put a premium on their car, and the
margin on ultra-high premium car (Ferrari, Lamborghini...) are higher than
Apple's margin. But the price is so high that the revenue is razor thin. The
point is, a 30% premium on a device that costs on average 400$ is 120$,
doesn't reduce the buyers pool by a lot. A 30% premium on a 20K car is 6K, it
change a lot. And if you go in the premium segment is even more.

Final consideration, maybe the price Apple is aiming are not electric car but
direct competition with Google's self-driving car. Or if you want car as-a-
service. It is something not totally in Apple's DNA but it could provide hefty
profit margins. Could be that the release date is 2029 and not 2019?

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ctdonath
Somebody is arranging to build a car factory in Atlanta. No names given yet.

~~~
arjunrc
Do you have a source to this?

I haven't seen any news regarding this in any of the auto websites or related
sub-reddits

~~~
OopsCriticality
[http://faradayfuture.com/press/20151105.html](http://faradayfuture.com/press/20151105.html)

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paulsutter
Good insight into entering the car business. But he missed the only thing that
matters.

Apple's car must be centered around self-driving, or it wont be relevant.
Tesla's Autopilot represents an automotive phase change[1]. A car without
autopilot is like using a fax machine instead of an iPhone.

[1] [http://jalopnik.com/teslas-autopilot-system-is-awesome-
and-c...](http://jalopnik.com/teslas-autopilot-system-is-awesome-and-creepy-
and-a-sig-1736573089)

~~~
mikeash
Autopilot is cool, but it's not a game changer by any means. The driver still
has to be fully engaged. This is not a system where you can turn it on and
then read a book or take a nap.

80% of the benefit of Autopilot is the traffic-aware cruise control. That's
basically just a radar unit that keeps you from hitting the car in front.
Remarkably useful, but not anything like a phase change.

If and when true autonomous technology arrives, that certainly will be a phase
change. And Autopilot is a step (a small one) in that direction. But it is not
by itself a prticularly big deal.

(Full disclosure: I've driven maybe 1,000 miles with Autopilot, and a few
thousand miles with the pre-Autopilot traffic-aware cruise control.)

~~~
paulsutter
The key of autopilot is not the current state of the software. The key is that
they have shipped it and their learning curve will be steeper and product
development faster and more user-proven than the competitors.

Google had an enormous technology lead but they've squandered it on a clowncar
that remains a concept. They're overthinking the product, how can we ensure
people aren't afraid of the technology? Make it cute. Riiight. Funny how they
don't mention any pre-orders.

Shipping autopilot was bold and smart. Tesla has a deterministic path forward.
Meanwhile Google and the traditional car companies are lost in indecision. And
Apple is starting out even further behind. Tesla's autopilot is a wake-up call
for all of them.

EDIT: Qworg, they can add a sensor to the cars they ship at any time. They did
it in the past and you can be sure they are doing it now. The others still
need to figure out how to ship a single car.

~~~
Qworg
I wouldn't take it as far as you have - releasing Autopilot this early was the
right move, but the current sensor mix will limit the applicability of their
data gathering until they ship new hardware.

I'm not sure GoogleX had to approach self-driving as a product. At least, not
until Alphabet.

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OopsCriticality
This car stuff still doesn't make sense to me.

One big thing I don't understand about these Apple car rumors is what is Apple
supposed to be doing that current automotive groups are not? If you're new to
a product area, building a car using CMs (makes sense) with subsystems sourced
from the CM or outside suppliers (also makes sense), where's the je ne sais
quoi that makes the Apple car compelling over other options? How can you have
an advantage over the established manufacturers, if you're sourcing
parts/knowledge (e.g., BMW's nifty CFRP material) from your competition?
What's the sustainable competitive advantage?

An obvious answer would seem to be design, but I don't buy that Apple
producing a better UI than the current car manufacturers is fait accompli. On
infotainment, CarPlay is pretty frustrating to use, to the point that I
question if anyone from Apple has actually used it while driving: legibility
is awful (especially for Maps), Siri doesn't work well in the noisy car
environment as a primary navigation tool, and touch operation takes too much
eye attention. Some of the usability failures are due to current Apple styling
choices (e.g., fonts that are too thin), but many are (as I see it) due to the
unsuitability of the Apple multitouch UI paradigm for the car. For comparison,
I'd rate both Chrysler's UConnect and BMW's iDrive as superior in usability. I
have no doubt that CarPlay can be improved (e.g., physical jog wheels), but I
see those improvements as teaching away from the Apple's UI paradigm and
towards the existing competitors in the auto world. As to interior or exterior
design, I also remain skeptical: Apple tends to pick materials that don't wear
well in use, and we're talking about a product that will have far longer
lifecycle than anything in the current Apple lineup. I'm sure Apple could
produce something that looks nice, but plenty of marques make nice looking
cars. Nice appearance for cars is commoditized.

Apple's current supply chain and manufacturing processes are a hell of an
advantage in consumer electronics, but there would seem to be very little
overlap with automotive. I guess that applies broadly too, there seems to be
so little overlap with Apple's current corporate experience and advantages in
consumer electronics and the automotive arena.

edit: Also, JLG's point on maintenance is poppycock. Electric cars may have
_reduced_ maintenance, but to suggest that tires and wiper blades are all one
has to worry about is plain wrong. Part of the product lifecycle
considerations includes recalls, e.g., Takata airbags.

~~~
Steko
What can Apple do different than big incumbents? How about all the stuff HN
goes gaga over when Tesla does it?

I think you're selling design as a difference short, for Apple design is
holistic and affects the entire product experience not just the look and feel
or the entertainment ux.

They design the manufacturing process to squeeze out nickels on the dollar and
using CM means they avoid legacy overhead that weighs down behemoths like GM,
VW and Toyota. They also don't have any legacy overhead tied to engineering
around ICE. As we've seen with Tesla, they had to reinvent almost everything
because most of the problems traditional car companies had been working on
don't exist in an all-electric vehicle.

Apple designs the buying process, which for cars is nightmare fuel for most
people. Even in their normal retail stores, buying is easier, you can pick up
some things off the shelf, ring it up yourself right where you're standing
with the Store app and then walk out. This may be Apple's biggest advantage
from the customer's perspective.

Carplay I haven't used but I think you may be selling this short too, on
/r/cars when an industry entertainment guy asked what they should be doing the
most upvoted response was: get out of the way and make dumb screens for
Android Auto and CarPlay [1]. Maybe you're right though and it is outclassed
by some current offerings. Perhaps this area is an Apple weakness but another
possibly is that CarPlay is to iCar as the Motorola ROKR was to the iphone.

[1]
[https://www.reddit.com/r/cars/comments/2vfubz/i_am_one_of_th...](https://www.reddit.com/r/cars/comments/2vfubz/i_am_one_of_the_lead_engineers_responsible_for/)

You talk about Apple's materials being shoddy but that is not the impression I
have (outside of charging cables). My iphone 3gs and 4s have held up very well
and metal frame ipads, macbooks and iphones seem to do even better. Greg
Koenig's much linked post about their Watch manufacturing [2] basically said
Apple is operating at the pinnacle of craftsmanship when it comes to
materials, precision and finish. One quote of many possible: _" I see a
process that could only have been created by a team looking to execute on a
level far beyond what was necessary or what will be noticed. This isn't a
supply chain, it is a ritual Apple is performing to bring themselves up to the
standards necessary to compete against companies with centuries of
experience."_ There is plenty of room for technical gimmicks here in the auto
industry and I fully expect a video of Jony Ive explaining how revolutionary
it is for safety when the entire carframe is milled from a single piece of
aluminum.

[2] [http://atomicdelights.com/blog/a-glimpse-at-how-the-apple-
wa...](http://atomicdelights.com/blog/a-glimpse-at-how-the-apple-watch-is-
made)

~~~
OopsCriticality
> They design the manufacturing process to squeeze out nickels on the dollar
> and using CM means they avoid legacy overhead that weighs down behemoths
> like GM, VW and Toyota.

GM's legacy overhead was discharged during their bankruptcy. As to DFM and
manufacturing costs, the auto market is viciously competitive, and I don't see
how newcomer Apple and their CMs are going to do something that the existing
manufacturers haven't done already to maintain competitiveness in the current
market.

> They also don't have any legacy overhead tied to engineering around ICE. As
> we've seen with Tesla, they had to reinvent almost everything because most
> of the problems traditional car companies had been working on don't exist in
> an all-electric vehicle.

Don't know what you mean by legacy overhead wrt. ICE. As to Tesla, that
statement reads bombastic given previous efforts by others in battery electric
vehicles. Beyond previous efforts by others, I'd say that BMW has done more
innovation with their i sub-brand than Tesla has done, especially wrt. vehicle
weight. Tesla does cool stuff, but the evangelism is tiring.

> Apple designs the buying process, which for cars is nightmare fuel for most
> people.

I completely agree that the current car purchasing process sucks, even for "no
hassle" dealers, but how much can Apple do here? So much of the pain is
finance- and paperwork-related, and even if Apple brings in their own
financing, that can't get around the legal requirements for the paperwork.

> Carplay I haven't used but I think you may be selling this short too…

I agree that CarPlay sounds like a great idea, so much so that I
unceremoniously ripped out my car's stock headunit to put in an aftermarket
Pioneer unit with CarPlay a year ago. The problem is in the execution. Some
stuff is almost magical, like automatically offering to navigate to the next
appointment in my calendar; mostly though it's frustrating because it isn't
reliable (especially in cell coverage-poor areas) and requires too much
cognitive load to use. I have no doubt that Apple could improve it, but I
don't know that the will is there because I think they would need to
acknowledge that their current look and interaction paradigm aren't suited for
in-car use.

> You talk about Apple's materials being shoddy but that is not the impression
> I have (outside of charging cables). My iphone 3gs and 4s have held up very
> well and metal frame ipads, macbooks and iphones seem to do even better.

I too have had good experiences with the metals, although the stuff using
6000-series aluminum is a bit dent-prone; I have no experience with the
7000-series containing Apple devices but would naturally expect that they
would do much better. I was however specifically thinking of their PU and
leather iPhone and iPad accessories: they look disgusting after only a week's
use in the lighter colors, and I was mentally picturing the touch surfaces of
a car using the same materials.

> There is plenty of room for technical gimmicks here in the auto industry and
> I fully expect a video of Jony Ive explaining how revolutionary it is for
> safety when the entire carframe is milled from a single piece of aluminum.

Sounds a little expensive to insure.

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mkempe
Here's one way to look at it: Tim Cook's deep expertise is in logistics,
exclusive supplies, and large-scale production runs.

What industry has been stagnating, is hence most ripe for re-invention, and
heavily involves problems in Cook's favorite domain?

While Steve Jobs was passionate about computers as wheels for the mind and
about gestalt esthetics, Tim Cook is passionate about supply lines. Different
people, distinct ambitions.

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brazzledazzle
I can't imagine this is the case, but what if they're building an
OS/UI/experience that car manufacturers would build into their vehicles? That
would go against everything they've ever done but would be easier and would
remove them from direct liability (depending on what features it offered). 30%
on a car might be difficult for even Apple to pull off but 30% on a $2-5K
option would probably be something most people would spring for. I imagine it
would put Google in a tough position, even if they had superior features (like
better self-driving).

~~~
ams6110
They can't really innovate the UI. The UI for a car is the steering wheel,
accelerator, and brake. They can't change that. They might make a slightly
better navigation/entertainment package but honestly I'd rather have a simple
radio and manual climate controls anyway. My phone handles music and
navigation, I don't need to spend an extra $2K-$5K to duplicate that.

Apple has always produced high quality consumer electronics used mostly for
entertainment. Cars are entirely out of their realm of experience. Cars are
too competitive and are subject to too much regulation and liability to make
30%. I think it's a huge mistake for them but time will tell.

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csours
A better question than what could Apple do better (everything [1]), is WHY
would Apple enter the market?

Answer: The automobile is the ultimate mobile platform.

What can I do with the ultimate mobile platform? Keep my users connected. Keep
my users entertained. Keep my users happy. Remove inconvenient interactions
with the outside world (tolls, drive throughs, parking, driving...).

How can I extract value from the ultimate mobile platform? Sell (or lease) the
platform. Sell advertisements. Collect a percent of each interaction with the
outside world. YOU DON'T HAVE TO PICK JUST ONE! You can mix and match
depending on the application.

\---

Manufacturing ONE car is not particularly difficult. Designing ONE car is a
little complicated. Selling ONE car is pretty easy.

Manufacturing vehicles at scale is hideously complicated[2]. A small example
using product volume alone: a MacBook Pro is 1770.6 cm3; the Frunk of a Tesla
is 150079 cm3 - you can fit almost 85 Macbooks into one of the smaller storage
areas on the vehicle.

85 MacBooks cost in the same ballpark as one Tesla.

You can compare almost any other stats and get the same picture.

\---

1\. What's the biggest room in the Universe? The room for improvement.

2\. I used to work in IT for Automotive Manufacturing. "We have all the
problems of a major theme park and a major zoo", and we have to make cars too!

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marpstar
all I want in life is for my car to have Apple Pay so that I can go through
the McDonald's drive-thru and have to do nothing but order my food. bonus if
it knows my order ahead of time because I always get the same thing and I have
to say nothing at all.

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subinsebastien
If it is self driving and super smart, it detects when you are hungry,
automatically goes through the nearest drive-thru, order something based on
your nutrition requirements, and you just have to chew when an inbuilt robotic
hand pushes the food into your mouth.

~~~
tonyedgecombe
Can't we get rid of the chewing bit, it's such an inconvenience.

