Apple has no pipeline--except maybe cars, and that could be big

In My Humble Opinion
1

OK, there are a couple things I’d like to discuss based on this Quora article (mainly the top answer):

The first is this opinion of mine: Apple doesn’t have a pipeline now except for maybe an entry into the automobile industry, but they have the money they need to do that in the form of cold, hard cash, and I think they have a good chance at succeeding. So I am slamming and praising Apple at the same time. I think the iWatch has been a fine little toy, hardly a game-changer or even a unique product in the market. I think they are out of other ideas and are going to be running in the same iPhone/iPad/Mac rut unless they go crazy with cars. And I would be genuinely excited to see that.

The second thing I’d like to discuss is the Quora answer itself. I’ve translated and written a lot of marketing material for the Japanese auto industry, so I have a bit of an insider’s perspective. First, the things I agree with, more or less:

• The future of cars is electric. I basically agree, but one thing to keep in mind is that, no matter how good a battery gets, one can always get more range by strapping on a fuel tank (probably hydrogen in the future). A BEV powertrain with a 500-700-mile range would be outstanding and satisfy most car users, but I’m not sure about bigger vehicles like buses, semis, etc. Will batteries scale well for such vehicles? One could have a system of swapping out batteries, but I think H2 tanks would be easier, and the cost wouldn’t differ that much. Thus, while I think that passenger cars will mostly be electric, there could very well be an H2 infrastructure coming (assuming that fossil fuels will be phased out because of their emissions).

• Tesla, Apple, and Google have a big opportunity to disrupt the industry. I think Tesla is already doing so, and I hope that will continue. I think Apple has the cash and the creative talent to do big things. Google is already doing cool stuff. So yeah. And I’m sure there are players that will be big yet are still unidentified and perhaps not even in existence.

But then there are several things with which I disagree. I will quote and comment:

True, but legacy automakers are already doing this. They already have models. Honda has the Fit EV and lots of experience in producing actual production EVs (Honda EV Plus - Wikipedia) and concept models. Honda also has electric motorcycles. Nissan has the Leaf. GM has the Volt (the electric vehicle with the aforementioned fuel tank strapped on). And pretty much all of the makers have something. At the very least, they (pretty much) all have hybrids, which are a very good stepping stone to full EVs: they are much more complicated technology, so being able to do that well makes producing EVs a snap.

Except the legacy automakers have EVs as “existing models.”

Not from what I’ve seen. In Japan, the engineers are the highest in rank in car companies. Sure, some engineers will lose power because they only do gasoline engine stuff. But there are many, many parts to the car that the same engineers can continue to design. That’s their job: constantly coming up with new stuff for new models.

This is true all the time. The auto industry is extremely fast-moving. These guys are used to change.

Wrong. Any company doing hybrids already has battery and electric motor tech in the supply chain.

Eh, not a big deal. People are always retiring. Younger people can retrain now. People who are exclusively IC have another 10-15 years at least to ply their trade.

The “reality of the situation” is changing year by year, and the majors are covering all their bets. They are already adapting.

The majors also have a lot of advantages. Almost all of the packaging, suspension, and safety tech is still valid, and they understand all the little details of seat comfort, driver interfaces, fit and finish, and–really important–costing and pricing. Tesla is currently struggling with this last point. Yes, the majors will wave bye-bye to their IC advantages, but they are the experts in every other area as well.

This is uninformed fanboy thinking. Don’t get me wrong: I don’t think all of the majors will survive, inasmuch as some were barely surviving before. A company like Chrysler has pretty much zero areas of excellence and only one brand (Jeep) that has any real meaning in the market (maybe there are some Dodge truck fans too, don’t know).

So, can Apple enter this market and make a difference? Yes! By applying some truly new thinking to it. I hope they will, and I think they can.

2

I agree. I think that once they really get going with a car, they can create another game-changer just like they did with smart phones.

3

It would be awesome to see. It’s also just about the only industry I can think of that can allow them to sustain their arc of ultra-fast growth.

4

What is this, like your third or fourth thread on Apple and its supposedly empty pipeline?

5

I guess, but it’s been awhile. You got a prob with that?

6

Well, what could they invent?

One vague idea I had is they could make another pass at desktop pcs, just done different.

Essentially, the whole reason you even have an operating system at all is to act as an interface between a vast pile of hardware and software.

But what if it didn’t work that way…

You could actually implement every major function of a desktop computer in CPLDs. A hybrid computer with this would have a microprocessor for running legacy apps, but it would also have an array of CPLDs that receive the peripheral inputs and are wired to the functions on the GPU.

Installing an app would eat up CPLD space for as long as the app is hosted. There is a possible swapping scheme.

Advantages?

Instantaneous startups.
It would be the fastest, most responsive computer anyone has every used - most things would happen near instantly
It would be inherently vastly more secure. The inherent nature of implementing a computer and data handling as discrete subsystems only capable of a single task (there’s nothing to hack as bad data cannot cause a CPLD subsystem to execute wildly different instructions) would block almost all known forms of computer hacking.
Architected well, applications would be far more reliable.

Disadvantages?

  1. More expensive hardware in terms of silicon consumed. This is why we have microprocessors and keep most programs stored on magnetic media until needed in the first place. 40 years ago silicon was expensive.
  2. Much more expensive software development costs. It might be 10 times more human labor and time to produce any given application of equivalent complexity. The advantage is the applications could be vastly higher quality and users would be able to perceive the difference.
  3. It would be a total revamp. Everything existing would be thrown out. That’s why there would initially be hybrid systems offered with this technology, where core functions and core apps run on the CPLD but a conventional processor is installed for everything else.
7

You’ve stated your opinion often and consistently enough that I’m asking you now to back it up. Your opinion is bizarre and you have never given any evidence to support it. So I’m asking how do you personally know what is or is not in Apple’s pipeline?

Here’s something you said 2 years ago. “Apple hasn’t delivered a big new product in several years now. There are no rumors of any, either. Without new products, the company can’t grow, and its revenues will probably shrink eventually, as it is becoming less competitive in its current markets, and those markets are themselves becoming less attractive (e.g., commodification of smartphones with sinking price points).”

Since you made that bold claim in 2013, Apple’s yearly revenue is up 72% in 2015 and net income is up 66%. The average selling point of an iPhone this recent quarter is up 10% over the year-ago quarter and yet sales are up almost 20% vs the year-ago.

So how the fuck did they do that with no new products? Where is your chicken little attitude coming from?

Are the happy days going to last forever? No. There will be ups and downs. Apple badly misjudged how often people will upgrade their iPads, for example. But if you insist on sticking to an outlandish position, at least try to back it up with something other than your gut.

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I’m not saying anything a bunch of bloggers out there haven’t said. There aren’t any rumors about amazing products on the way–except for cars. Have you heard anything? I could be wrong; they could be keeping something big secret.

Not really far off. Have they launched a big new product in the last two years? No. They haven’t since 2010, with the iPad.

Apple’s fiscal year ends in September, so we have 2015 and 2014 figures. I don’t see where you get your 72%. Seems like net sales are up 27%. Still impressive. I never made any claims about the direction of their financials. It’s great that they are able to sustain such huge growth based on current products. Kudos. But that’s a whole different argument from whether they have a good pipeline or not.

I never said Apple was on the point of failure. I’ve always recognized the obvious, that they have a butt-ton of cash and are unsinkable for a long, long time. I even started out this post noting that they had the cash on hand to enter the automobile industry.

Well, first we need to start with my actual position, ya know?

9

My opinion is that Apple would fail in the automobile business.

*Computers and automobiles are two vastly different products. Thinking you can transfer your expertise in making one to the other is a mistake.

*Apple has money but automobile making is a huge business. It won’t be able to dominate the field just by its capital.

*Automobile manufacturing is a mature field. It’s not like computers, where Apple got in on the ground floor and helped create the field.

*Apple no longer has Steve Jobs.

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99% of bloggers don’t know anything more or less than you or I do. Is lack of rumors about something specific what you’ve been basing everything on? Don’t you think “Hmmm, I haven’t read about any new rumors lately, so Apple must really be running on empty” is a huge leap of logic?

You are totally far off. I am not arguing that since 2010 they have released your mythical big new amazeballs product.

It seems you need to register to view that site, so I don’t know what’s there or where you’re getting 27%. For the full Fiscal Year 2013, Apple had revenue of $170 billion and net income of $35 billion. For the full Fiscal Year of 2015, Apple had revenue of $233 billion and net income of $52 billion. Revenue increased by 72% and net income increased by 66%. Which basically means Apple is doing a lot better when you predicted they should be doing a lot worse. If those numbers are wrong or misapplied, please tell me.

WTF? Yes, you did. You even included your own quote about financials in your reply. This is you: “Without new products, the company can’t grow, and its revenues will probably shrink eventually, as it is becoming less competitive in its current markets, and those markets are themselves becoming less attractive (e.g., commodification of smartphones with sinking price points).”

You are the one who strung those 2 together by saying without anything in the pipeline, they can’t grow. Again, according to you, there is nothing in the pipeline, yet they have indeed grown.

No, but you have said Apple is all downhill from here. And that’s totally fine. Apple fucks up a lot more than people think. My issue is that your logic for reaching that conclusion (WON’T SOMEBODY PLEASE THINK OF THE PIPELINE?!) is totally bonkers.

Is your position something other than “Apple has nothing in it’s pipeline” with the corollary “and therefore it can’t grow?”

I admit, I’m rehashing old stuff you’ve said, but it all comes back to your oddball claim, which you repeat in this thread, that Apple’s tank is empty. If you want, post your reply and from here on out I’ll stick to only this thread.

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Q: “How do you make a small fortune in the auto industry?”
A: “Start with a large fortune.”

the auto industry is extremely capital intensive and margins are pretty low. You more or less need to own your own manufacturing, and Apple isn’t used to that. Cars aren’t like iPhones; you don’t just design something and then go shopping in China for someone to crank out millions of them.

The question I’d ask you is what would make an Apple car “Apple?” Cars are subject to piles of regulations; so much so that many of them are of similar shape. Look at global mid-size cars like the Ford Fusion/Mondeo, the Mazda 6, BMW 3-series, Mercedes CLA, etc. In order to comply with NHTSA, EU, CAFE, and EPA regulations they all have similar shapes. A flowing aero roofline, a short deck, and a long-ish, drooping hoodline which meets a flat bullnose. there are FMVSS requirements for interior indicators and controls. Apple will be wading into a heavily regulated, saturated, low-margin market and be working under a ton of constraints.

Buses are better suited as hybrids, since much of their operation is short-hop stop and go. Semis? No fucking way. Weight limits mean that every lb. heavier the truck is, that’s one less lb. of cargo they can carry. Right now, kitted with 150 gallons of fuel capacity, a Freightliner Cascadia loaded to 60,000 lbs GVWR can go about 900 miles on a fill. how many thousands of lbs of batteries do you think it would take to do that, not to mention how long do you think that would take to recharge? Trucking lives and dies by keeping loaded trucks on the road. Every minute the truck is parked is money lost.

There could be, but as of now there isn’t. It’s a rather large assumption that one is just going to magically pop up.

They have an opportunity, but nobody seems to be able to articulate why. they just babble “because creative! Tech! disruption!” This industry is not like making the latest match-3 game with cutesy graphics or yet another smartphone app for teens to send each other pictures of their junk. You fuck up and release a buggy smartphone app or OS, you push out an update. You fuck up and release a car with a safety flaw, you had better set aside millions for a recall.

The only thing I see Apple and Google having an advantage with is mapping. But Google’s business model has typically been to come up with something and let everyone (but Microsoft) use it.

Self-driving/autonomous cars are pretty much 80% here already. I’ve driven a Lincoln MKZ with all the goodies (adaptive cruise control, park assist, lane-keep assist, forward collision avoidance, etc.) This car could steer itself, brake itself if it saw an obstruction ahead, steer itself, accelerate itself, etc. And everyone (I mean everyone) is working on that last 20%.

And this is the thing. Apple’s biggest successes have been getting into a market and catching everyone else flat-footed. That’s why the Apple Watch hasn’t really been a breakout product; it was a “me-too” entry in a niche market.

yep, people love to sit there and fawn over Tesla. But I’d insist that the Chevy Volt is a more “advanced” product. And that’s the thing; all of the players in the market are working on this stuff (except maybe for FCA, but that’s partly because they’re wasting time and money trying to revive Alfa Romeo.)

Tesla didn’t make a long-range EV because they were the only company with the skills/talent to do so. They were able to make it because they were founded by someone who sold the company to investors as a “start-up,” so they could lose money for years on building the company.

People (who didn’t care about cars until Tesla showed up and now think they’re experts) seem to think that once you get rid of the gas engine, the car is now over 9000% simpler. Nope. You still need a lot of people skilled in designing body structures, safety systems, suspension, electrical/electronics, etc. And you need these people to be familiar with all of the regulatory requirements for everything. You aren’t going to hire a bunch of 20 year old Silicon Valley tech douchebros and build a car. It doesn’t matter how easy it is to use the tablet stuck in the middle of the dash if your ar folds up like a cardboard box under crash testing.

Tesla was able to take advantage of the cutbacks in Detroit in the mid-late 2000s and got a bunch of good, experienced automotive engineers who had taken buyouts or early retirements.

Maybe. but the people who natter on about it almost never can articulate how or why Apple will do it. most of them are just Apple fans who don’t know what it takes to make cars in this day and age.

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One thing which popped in my head as I was writing the above: FCA is probably the weakest, most vulnerable automaker operating right now, both in terms of financials and future product plan. The whole car business for FCA is being bankrolled by Jeep and Ram, and they’re bleeding off those fat profits for legacy recall issues and trying to revive Alfa Romeo for some reason. They have no hybrids, only the 500 EV which is nothing more than a compliance car and I think the EV hardware was contracted out anyway. The new town & country minivan is supposed to have a PHEV option which I’ll believe when I see, but that’s about it.

Apple could buy FCA with the loose change in Tim Cook’s office and have everything they need to build the “car” part of an “Apple Car.”

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To me the staggering thing is that Apple has about $200 billion cash in hand. That’s roughly what the GDP of New Zealand is. There must be enormous pressure from the institutional shareholders for that cash mountain to either be used or paid in dividend to the stock holders.

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Cook re-instated dividends a year or two ago, and has not been shy about telling investors to get lost.

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True, but it isn’t out of the question for Apple to partner with an established auto-manufacturer. Someone big. Someone like VW (for example) that could really use a boost right now.

But Tesla has revolutionized the center console design with their huge display. MB S class has an all electronic display cluster which is quite different from the majority of analogue based displays. I think Apple is well positioned to design something that leverages their UI experience in this respect. People will flock to it the way they do Apple devices. And Apple doesn’t have to get ALL the market share, just one that is profitable.

As for car design, Apple can’t change standards or physics of aerodynamics, but what Apple is good at is the details of the design. I believe they can design a more beautifully crafted car from the standpoint of fit and finish. In contrast, I know Teslas are generally considered to be “nice” cars but I am not a fan. There is nothing special or elegant about the sedan. Almost every premium manufacturer makes a nicer looking car in that size segment, i.e. Maserati, Jaguar, Aston Martin, Audi, MB, BMW. The Tesla two seater is easily mistaken for the Lotus (I’d rather have the Lotus, to be honest) and has limited appeal anyway.

So yeah, while I agree with much of your post above, I think Apple has a chance of making a better mousetrap from the standpoint of design alone. Perhaps that’s their play. (?) I do hope they don’t insist on integrating it with iTunes. :wink:

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The NCPPR sound nice :dubious:

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Like I said above, they could buy FCA without blinking and get all of the “car” stuff they need.

great. it’s also fucking ugly. Just a giant rectangle shoved in there.

plus, it’s all touch/no tactile, just as the rest of the industry has backed away from that due to too many complaints. MyFord Touch got slammed for relying on touch-sensitive controls, so they’re back to buttons. The Volt had touch sensitive controls, and has gone back to mostly buttons for 2016.

So do Cadillac, Lincoln, BMW, etc.

this is the clueless part. Buying a car is not like buying a $600 iPhone (where you don’t even pay for the phone up front) or a $300 watch.

these are meaningless generalities. How are others deficient in these areas, and how would Apple go about doing it better? Or is it just “Apple will do it better because Apple will do it better?”

The Tesla Roadster is a Lotus, they built the body/chassis.

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That could certainly happen.

Yes, they could not enter the industry arrogantly. They would have to line up the right talent and stuff.

True. But they are one of the few companies with the raw cash to start.

Yes. I think the disruption (not “total disruption”) of EVs gives them a bit of a window.

That could be either feature or bug right now. He had his time and his time. He did some great things, but I’m not a worshipper.

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I think we’re arguing this backwards, really. That any particular company has a pipeline is something to be proven, not disproven, especially since having a good pipeline is far, FAR from automatic. There is no evidence that Apple has anything good in the works. They could be keeping something very amazing very secret, it’s true. But I do disdain the fanboy logic that goes, “Apple is just the kind of company that comes up with something amazing, so they will again soon!” Prove it. Show some hints of that. Any evidence. (I’m saying this to the fanboys, not necessarily you.)

I made no predictions in 2013 about how they’d be doing over the next two years!

I said eventually, which is true. Apple has had insane levels of growth since 2000. They have a very high stock price which is based on anticipation of further massive growth. And it is amazing they have done as well as they have since 2013, but can they keep growing 27% a year with just iPhones and iPads? No, and no one would assert that they could. The markets are maturing, and Apple is not really even trying to capture market share, as they are maintaining premium positioning.

Your stating that what I’m saying is “bonkers” or “oddball” crazy or whatever is a misuse of the those words. The idea that a company’s pipeline sucks is at worst mundane speculation lacking evidence. It’s hardly some wild theory, since in time most/all tech companies run out of amazing new products and cash-cow what they’ve got, get bought out, etc.

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Lots of great points, thanks.

Lol, yep.

True, though a partnership with a cheaper car maker like Tata could be interesting.

What they need is a brilliant new innovation that they can patent. And/or LOTS of incremental innovations that are difficult to imitate. Both are tall orders, it’s true.

I buy your logic. I don’t think batteries scale well for large vehicles.

Japan is betting on fuel cell vehicles to a large extent, and H2 infrastructure is slowly being built. It’s really no more complex than delivering gasoline–easier and safer in many ways. While batteries seem a poor choice for semis, I see no reason why H2 would be.

Yep. They need to take their big pile of money and do something that you and I can’t imagine right at this moment. I’d like to think that Apple could do that right now. While I (fairly I think) knock Apple for its lack of new ideas and (apparent!) lack of pipeline right now, I do look wistfully back at the days when it was full of fun and funky new ideas. I’d like to be amazed again.