Ex-GM CEO tells Apple: Don't make cars
I'm a big, big Apple fan. I work on a MacBook Pro, chat and text on an iPhone 6 and read Game of Thrones on an iPad Mini. Call me a fan boy if you must. But don't think my passion for Cupertino's fruit company extends to the rumored Apple car. If you listened to last night's episode of the Autoblog Podcast, you heard my firm opposition to this silly idea, and as it turns out, I'm not alone in opposing it. Former General Motors CEO Dan Akerson has officially come out against the notion of Apple taking over our roads.
According to Automotive News, Akerson more or less echoed our arguments on last night's podcast, saying in a phone interview that he wouldn't be very happy, were he an Apple shareholder.
"I would be highly suspect of the long-term prospect of getting into a low-margin, heavy-manufacturing [business]," Akerson said. "A lot of people who don't ever operate in it don't understand and have a tendency to underestimate."
Akerson, who must have listened to the podcast last night, went on to say the company was better off teaming with automakers and providing infotainment and connectivity systems. "I'd have turned over the infotainment and interconnectivity of every GM car" to Apple, Akerson said of his time at the helm of Detroit's biggest automaker.
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Although the car companies don't know it, that space where your cheap radio exist is going to be very valuable, worth billions of dollars. Our car is where we make our buying decision for billions of dollars in goods and services such as food and shopping. Having targeted advertising based on our anticipated actions and location at the exact point where our brains are forming a decision to buy is invaluable.
People driving a Tesla with a 17 inch screen use their car, rather than their phone to search. This is why Apple and Google are getting involved.
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scott313 Days Ago@cointelHence my comment to make systems for the cars that they could sell to any and all makes vs. they to build a car to house only their system.
If they could make a Apple drive system or dash in the car and sell the electronics and even sell updates through them there is a lot more money to be made than trying to build an entire car.
The issue with Apple is the market expects a lot out of them and if they do not produce a profit it will be reflected in their stock fast.
When you go to build the entire car you get into things much more difficult like crash systems and emission systems that are all government regulated.
You also face much greater liability for the failure of a simple part. as we have seen in the GM case where they have to pay out to many because the air bag did not deploy even if they had no belt on, were twice the limit drunk and nearly 3 times the limit speed wise.
These are issues you do not face with a phone or pad.
Years ago many companies diversified and got into building and making things that has some to do with their products but not fully and many ended up realizing they should have remained a supplier as there was just so much more work for such little return.
The fact is making phones and other components is almost a risk free venture and pure profit with little risk. Building a car when you never have Is a major risk and the profits are not great enough for the risk when you are already making more money then you know what to do with.
Tesla is not out of the woods yet and still has a lot on their to do list. Apple has a stock value that needs protected and the risk involved here is like putting all your chips on red 5 and spinning the wheel.
If you think Jobs was against a larger screen on the phone you can only imagine what he would say here.
What some people know is that when EVs become a larger market segment the supply of motors, batteries and other parts will become commodity materials. At that point the building of an EV will simply be a purchasing and assembly job. The cars will be largely similar in main components, and it will only be other add ons and style that differentiate them. Any company with the funds to put together an assembly plant will be able to compete. GM and all the other old car companies fear that day, as well they should because their huge and inert overhead and over abundance of "yes men" puts them at a serious disadvantage. Whether apple goes on this is yet to be seen. Personally I think the margins will be too low for apple.
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