Apple and Cars

[Arthur Hanson]

The Apple car is coming and with it a whole new and exciting game. This will be just an intitial entry into Apple becoming the dominant platform for transportation and transport of everything, from the light weight electric bicycle to the fifteen hundred foot autonamous container ship to eventually space craft. This is one area that can significantly move the needle for even the world's largest company. Apple is forced to keep innovaing and finding new frontiers as their products and markets age and become lower margin commodities or push the markets and products into new uncharted areas. Apple has already proven it can do this as it has progressed in computing, entertainment and communications. The automotive industry is just an extension of where Apple has been going with their maps, entertainment, communications and above all their main talent, intuative user interfaces.

Just like Morris Chang said TSM is part of a group of companies cooperating, the same will be true of Apple and their suppliers and contractors. We are entering a new age of business built on the foundry model that allows companies to progress at a rate that just a few years ago was unimaginable. As I have written before, the foundry model is the superior business model of modern times from contract manufacturing, research, distribution, design and many processes and things we have not even considered yet. In this area TSM is superior to Samsung for they don't compete with their customers, a corner stone of the strength of the foundry model.

The chain is getting longer, now it's AI/big data/communications/processing power/mems/robotics. This chain will ecompas everything from transportation, food, shelter, medical care and many areas we haven't even considered.

Housing and building will be next with the Chinese building a state of the art 57 story building in 19 days. 3D printing and prefab construction of everything from phones to buildings will change everything.

Agriculture is going to be the next big market for technology as we learn to grow on one acre that use to take forty and has the potential to reach the equivalent of 700 using microbial/algae agriculture.

Medical will probably be the largest needle mover of all down the line as people get richer, they vastly increase the amount they spend on medical.

Changing educations very structure will be key as the accelleration of all technologies picks up speed. In fact we will have to adopt a whole new social structure to adapt to this or we will suffer calamities we can't even imagine. Hopefully even here technology has an answer with the advances in social media.

With the car(auto) we are about to enter the age of Autonomous Autormation. We are now in a Brave New World.

Everything will be linked and everything will be watched by some ones AI, I just hope it's on our side.

 

[Tom Simon]

Traffic in Silicon Valley is as bad as it has ever been. Perhaps the Apple executives (and Google's) are stuck traffic driving to work every day thinking there has to be a better way. If anything else in our lives, like phones or computers, worked as bad a cars at rush hour, we'd all raise a hue and cry. We are overdue for better auto technology, and I agree it a huge new opportunity. People will always HAVE to get around. It's a much more compelling application than fitness, or social media. Apple is good at keeping things under wraps. Makes me wonder just how far along they are.

 

[Daniel Payne]

Yes, Apple has hired some new employees with experience in Electric Vehicles and batteries, but it is way more likely that they will partner with an existing auto-maker like BMW and do a joint ownership vehicle instead of creating a new auto brand.

Besides, who would pay $75,000 for a new Apple car when you can buy another new car for $25,000? I'm just using a simple 3X multiplier based on how Apple prices their cell phones and laptop devices compared to the industry averages.

 

[ippisl]

Daniel , The 3X multiple is just a question of financial engineering. Apple can spin-out a car making subsidiary(fully controlled by Apple, unlike BMW) that will get funding from external sources, while selling some unique IP(that will prices at say $5K-10K) to that subsidiary at 3X multiples.

 

[ippisl]

The problem ,as it currently stand - except for having control over a large user ecosystem and better branding, Apple currently isn't meaningfully better than competitors at much. Google and many others have greatly improved in design, and Google is undoubtedly better at AI and cloud and software development in general.

So it's hard to see how they will compete, except on something related to brand.

 

[hist78]

The problem ,as it currently stand - except for having control over a large user ecosystem and better branding, Apple currently isn't meaningfully better than competitors at much. Google and many others have greatly improved in design, and Google is undoubtedly better at AI and cloud and software development in general.

So it's hard to see how they will compete, except on something related to brand.

To reduce the time and resources required for entering a meaningful and profitable automobile market, Apple can create a joint venture with those capable players in the market. For example Apple can partner with Tesla, BMW, Audi, Nissan, or even Google to form a new type of automobile company. If Apple can partner with Microsoft today for the benefit of customers (and Apple's own profit), there is no reason to stop them to work with Google. IMHO, the new Alphabet corporate structure Google is migrating to can make this kind of collaboration more feasible.