Apple developing their own car?

[RobStark]

Now, latest report on the subject from Jefferies & Co.’s Sundeep Bajikar, published by Barron’s, says that Apple Car will likely cost $55,000 and ship 200,000 cars in the first year(2019).

Read more at http://www.econotimes.com/Apple-car-to-cost-$55000-rumors-say-97015#0G1PLI7TTQbco4ZM.99

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Musk's arrogance towards partners and (future) competitors might very well be his downfall long-term. Apple is not joking around with $200bn in the bank whenever it enters a new sector.

Says who?

10 Old Apple Products That Totally Failed - Business Insider

 

[tftf]

10 Old Apple Products That Totally Failed - Business Insider

So, based on Musk's trash talk quote and this list (the majority of these failures are from the 80s and 90s when Apple was a different company with poor management) do you predict that Apple will fail?

I wouldn't bet against Apple given their resources, their recent car/ battery expert hirings and overall success penetrating sectors (music, phones, tablets) in the past decade. Apple has a very strong brand across the globe as a result (often in top three in brand value surveys).

Let's at least wait a few years to see if they greenlight the car project for production and unveil the details to the public.

And this Jefferies quote made me chuckle:

We believe Apple would be interested in and probably is developing a Car to 1) increase potential for longer term revenue and profit growth, 2) fend off ecosystem threats posed by Google Car, and 3) leverage and extend its premium brand image by introducing a new category that we think consumers are likely to be interested in. Our FY2019 Apple Car scenario assumes a $55,000 ASP and 200K shipments, yielding an EPS benefit of ~$0.32. When paired with a forward P/E of ~10x this contributes ~$3 to the AAPL stock price.

Apple: $55,000 Car Could Add 32 Cents EPS in 2019, Jefferies Says - Tech Trader Daily - Barrons.com

Ecosystem threat? There is most likely no Google car (except for OEM demo builds) going into production ever. Google said it intends to license the technology to others whereas Apple usually intends to build and offer the entire bundle (software, hardware, services) under its own brand when it's ready to enter a sector in full force.

Apple's current CarPlay, much like the exploratory Motorola Rokr-iTunes phone before Apple launched its first real smartphone, therefore could be just an early trial before Apple launches its own car and mobility ecosystem.

And $55k ASP at 200k units? Did Apple tell him? ROFL. We might as well throw coins in the air to come up with more numbers...all we know is that Apple is working on something in the mobility space.

As I wrote before: Maybe we can never buy nor drive (at least in Gen 2 or Gen3 iterations) an Apple car.

"Transport as a Service" business models could work very different in a decade or two compared to buying and driving a traditional car today.

Finally, let's slap the same forward P/E ratio of 10 on TSLA and see what that stock should be worth...

 

[gregincal]

Finally, let's slap the same forward P/E ratio of 10 on TSLA and see what that stock should be worth...

I'm not sure if this is what you were saying, but given that Tesla doesn't have any earnings and isn't likely to in the next year it would be worth 0.

 

[wdolson]

Apple will hopefully buy lots of Tesla batteries from the Gigafactory, which will be cheaper than anyone else's batteries. If Apple uses Tesla's open patents, batteries and charging standards, they could leverage Tesla's infrastructure to produce EVs much cheaper than anyone else. GM on the other hand, is in a bad position because they can't fully commit to EVs due to legacy technology.

Tesla isn't going to have any batteries to spare from the Gigafactory to sell to anyone else. If they come up with the best Li-Ion battery for BEVs, I could see Tesla building another Gigafactory to sell EV batteries to other companies. Elon is kind of a control freak about his projects coming out a certain way, but he also wants to see BEVs become the mainstream. So I doubt he would have any problems selling extra battery production to other companies and he has been clear he's open to sharing the supercharger network with other companies as long as they pay their share and the cars are designed to take the current the SCs produce.

So, based on Musk's trash talk quote and this list (the majority of these failures are from the 80s and 90s when Apple was a different company with poor management) do you predict that Apple will fail?

I wouldn't bet against Apple given their resources, their recent car/ battery expert hirings and overall success penetrating sectors (music, phones, tablets) in the past decade. Apple has a very strong brand across the globe as a result (often in top three in brand value surveys).

Let's at least wait a few years to see if they greenlight the car project for production and unveil the details to the public.

A number of those failures were while Steve Jobs was at the helm, both on the early and late end of that list. Steve Jobs also failed at Next computer. I remember looking at a Next at a tradeshow way back when, but it went nowhere.

Another point is that Apple has different management now. Steve Jobs was hands on with major projects the same way Elon Musk is hands on with both Tesla and SpaceX. Jobs was able to nudge the direction of projects as they went on. This was a critical component in the way things turned out. I know Jobs gave Time Cook all his ideas before he died, but we don't know how Cook will guide projects all the way through. The Apple Watch was well underway when Jobs died.

Tim Cook might be as good as Jobs was at guiding projects, but the level of talent Jobs had in that area is very rare. There are probably only a few people in the world in that league and one of them is running Apple's top competitor in the EV business.

And this Jefferies quote made me chuckle:

Apple: $55,000 Car Could Add 32 Cents EPS in 2019, Jefferies Says - Tech Trader Daily - Barrons.com

Ecosystem threat? There is most likely no Google car (except for OEM demo builds) going into production ever. Google said it intends to license the technology to others whereas Apple usually intends to build and offer the entire bundle (software, hardware, services) under its own brand when it's ready to enter a sector in full force.

Apple's current CarPlay, much like the exploratory Motorola Rokr-iTunes phone before Apple launched its first real smartphone, therefore could be just an early trial before Apple launches its own car and mobility ecosystem.

And $55k ASP at 200k units? Did Apple tell him? ROFL. We might as well throw coins in the air to come up with more numbers...all we know is that Apple is working on something in the mobility space.

As I wrote before: Maybe we can never buy nor drive (at least in Gen 2 or Gen3 iterations) an Apple car.

"Transport as a Service" business models could work very different in a decade or two compared to buying and driving a traditional car today.

Finally, let's slap the same forward P/E ratio of 10 on TSLA and see what that stock should be worth...

Apple is a hardware and software company, Google is primarily a software company. If Google did decide to build a car, that would be a major departure for them. Their efforts up to now have been concentrated on one technology rather than all the technologies that go into a car. One of Google's founders is also a close friend of Elon Musk, so I would expect Google to have a more cooperative relationship with Tesla than an adversarial one.

 

[tftf]

Apple is a hardware and software company, Google is primarily a software company. If Google did decide to build a car, that would be a major departure for them.

That's what I wrote above. Apple usually wants to build and control the entire (hardware, software, associated services, the whole widget) customer experience.

That's why I think CarPlay is only a first step and ultimately Apple wants to build its own car (hardware).

 

[wdolson]

That's what I wrote above. Apple usually wants to build and control the entire (hardware, software, associated services, the whole widget) customer experience.

That's why I think CarPlay is only a first step and ultimately Apple wants to build its own car (hardware).

Sorry, I was agreeing with you, but I think I got distracted part way through.

 

[voyager]

Interesting article

"In the next few years, Tesla has the potential to become the Apple of electric cars, even if Apple enters the industry... But as Wired recently pointed out—in disturbing fashion—the modern car is essentially a smartphone with wheels. And Apple knows how to market smartphones. Apple is a lifestyle choice, and there’s no greater sign of the lifestyle you’ve chosen in America than the car you drive"...

 

[tftf]

New developments:

"Electric Motorcycle Startup Mission Motors Ceases Operations After Losing Talent to Apple"

""Mission had a great group of engineers, specifically electric drive expertise," [former CEO Derek] Kaufman said. "Apple knew that - they wanted it, and they went and got it.""

"Apple has been rumored to be working on an electric vehicle, codenamed "Project Titan," for several months, with its secretive automotive team reportedly including former employees from Tesla, Ford, GM, A123 Systems, Samsung and other competitors. Earlier this year, it reached a settlement with A123 in a poaching lawsuit."

Source: http://bit.ly/1NkefaX

 

[voyager]

New developments:
Source: http://bit.ly/1NkefaX

Instead of naming its project after Saturn's largest moon, Apple should have right away called it Black Hole. All stuff that 'matters' seems to gravitate towards Apple's car project.

 

[mspohr]

Instead of naming its project after Saturn's largest moon, Apple should have right away called it Black Hole. All stuff that 'matters' seems to gravitate towards Apple's car project.

And nothing ever comes out.

 

[Caligula]

Yet another Apple product I'll never buy. This thread may as well be about the new Ifone 7.5S, or whatever they are calling it now... as it holds about as much interest for me either way.

 

[Carlios]

well entering electric car market is getting more and more expensive. Apple might catch it in the right time, but I doubt it will become as big as other major manufacturers. They will also join the forces with other software developers right away in order to repel Apple from taking too big of a share.
But it is likely that Apple wants to expand to car market. Smart phone market can change with one big invention and put Apple out of the map (almost). Just look what happened with Nokia in 2007- till now.
Also I think Apple is more focused on looking at google's self driving car and offering alternative. It depends what will happen also with that project. I got a feeling those could all as well be big failures... Or great successes.

 

[ohmman]

There are a couple of clear potential benefits to the project for Apple. The most obvious one is that they might succeed and be able to produce an electric vehicle. However, I don't think that's the most likely outcome. Instead, they will have their hands in the process of what it takes to build an electric vehicle, which means they'll be able to find exactly where future Apple products would fit in other manufacturer's vehicles in the future.

I can't predict where this would be, exactly, but I could imagine them creating Apple ICs with Apple software, or full UI suites with Apple hardware that are able to be integrated into vehicles. Not sure if that market makes sense to them, but surely they'd get some takers as new entrants to the EV market show up.

 

[nativewolf]

There are a couple of clear potential benefits to the project for Apple. The most obvious one is that they might succeed and be able to produce an electric vehicle. However, I don't think that's the most likely outcome. Instead, they will have their hands in the process of what it takes to build an electric vehicle, which means they'll be able to find exactly where future Apple products would fit in other manufacturer's vehicles in the future.

I can't predict where this would be, exactly, but I could imagine them creating Apple ICs with Apple software, or full UI suites with Apple hardware that are able to be integrated into vehicles. Not sure if that market makes sense to them, but surely they'd get some takers as new entrants to the EV market show up.

The problem Apple has is a strange one. CASH. They have too much cash, about 210 Billion sitting around the world. With that they could actually buy GM (about $80 billion for GM stock and to pay off debt) and Ford (65 billion but could not but the $100billion in ford debts). Anyhow, it is a huge pile of cash. Automobiles are one of the only industries that could absorb a $200 billion dollar cash pile. Never underestimate the stupidity of a company that has no strategic focus and too much money (look at Xerox in heyday, Kodak in heydays, or GM in 60s).

 

[ilovemycoffee]

The problem Apple has is a strange one. CASH. They have too much cash, about 210 Billion sitting around the world. With that they could actually buy GM (about $80 billion for GM stock and to pay off debt) and Ford (65 billion but could not but the $100billion in ford debts). Anyhow, it is a huge pile of cash. Automobiles are one of the only industries that could absorb a $200 billion dollar cash pile. Never underestimate the stupidity of a company that has no strategic focus and too much money (look at Xerox in heyday, Kodak in heydays, or GM in 60s).

Maybe Apple should build an Airline instead? That will take care of any extra money.

 

[TEG]

Maybe Apple should build an Airline instead? That will take care of any extra money.

 

[Ktowntslafan]

Apple CEO Tim Cook: ‘Massive Change’ Is Coming to the Auto Industry

Cook: Auto industry on verge of ‘massive change’

	​
​ Cook: Auto industry on verge of ‘massive change’Tim Cook said the auto industry is about to change, but he declined to respond reports that Apple is developing an electric car, Re/code reports.
View on [url]www.cnbc.com[/URL]	Preview by Yahoo​

 

[vinnie97]

Yet another Apple product I'll never buy. This thread may as well be about the new Ifone 7.5S, or whatever they are calling it now... as it holds about as much interest for me either way.

You got that right (unfortunate that this thread keeps getting bumped). The day Apple buys Tesla is the day I'll be looking at alternatives (double gulp, GM). Their cult fanbase keeps me far away (among other things).

 

[Fiver]

You got that right (unfortunate that this thread keeps getting bumped). The day Apple buys Tesla is the day I'll be looking at alternatives (double gulp, GM). Their cult fanbase keeps me far away (among other things).

I can't wait for Apple to make a car. Competition is good.

 

[sandpiper]

I can't wait for Apple to make a car. Competition is good.

I agree. And I'm convinced that Apple is entering the vehicle market only because it doesn't know what to do with all of it's cash. So they've decided to undertake a mission, not unlike Tesla or Google. We should definitely be supportive as it can only accelerate the demise of the ICE.

Will they make money on it? Who knows? That's a question for a few years in the future.