Poor poor Apple. The richest company in the world (it moves up and down, but it always floats near the top) just wanted to find a car maker to be its dance partner for its autonomous electric car project. It likely foresaw that Hyundai and Nissan would fall over themselves by the mere opportunity to contribute all of their latest technology and manufacturing expertise to a vehicle for which they wouldn’t get credit in the market.
Well, what a surprise – it didn’t happen. After Hyundai struggled with (and leaked) a potential partnership, and then There were rumors about Nissan To do the same, Apple has met a handful of automakers who had nothing for it. Now it has little choice but to turn to a contract manufacturer, such as Magna Steyr or his trusted friends at Foxconn, according to a new Bloomberg report.
It always seemed like it was going to be that way. This game from Apple courting automakers has played out like a miserable season of the Bachelor in which none of the contestants want to be, but showed up anyway. Apparently Apple met Ferrari during this exploratory phase, Bloomberg reports, which is tragically funny. There are no details on what that discussion entailed, but whatever the topic was, “the talks did not go further.”
Hyundai, Nissan and Ferrari aren’t impressionable startups ready to be claimed – they’re multinational corporations making cars longer than Apple computers. I would say that much of Apple’s success over the past two decades has been due to its surprising lack of hubris. Sure, it talks big, but for the most part it stays in its orbit, doesn’t introduce anything until it’s actually done, and doesn’t get caught up in weird corporate deals and takeovers that everyone can clearly see are doomed to fail. get started. Thinking it could essentially house an established car brand as a contract manufacturer isn’t typical of Apple, but just the kind of hubris you’d expect from a company in its position.
Making cars is of course difficult and expensive, and I understand why Apple wanted to give this a shot. As Bloomberg rightly points out, it reflects how the company builds its gadgets. Tim Cook’s crew designs the product and someone else builds it.
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But there is a difference between, say, asking Magna Steyr to fix your car and asking Hyundai. The latter has his own cars for sale, with his name on it. It probably won’t be that excited if the result turns out to be a huge success. A useful analogy from Bloomberg:
A longtime manager at both Apple and Tesla Inc. said this would be the same as Apple hitting bitter smartphone rival Samsung Electronics Co. would ask to produce the iPhone. Apple wants to question the assumptions of how a car works – how the seats are made, what the body looks like, the person said. A traditional carmaker would be reluctant to help such a potentially disruptive competitor, the person said, who asked not to be identified when discussing private matters.
Yes, Apple has a history of emerging industries. It changed the way record labels distribute music, and the way people buy it (well, until Spotify appeared.) It also changed the way software is distributed. But changing paradigms of how people find and use content is a very different beast from head-to-toe reinvention of how cars – probably the most complex physical ‘good’ we buy – are made.
It is also much more difficult to make money outside the gate in this business. “Car industry profit margins are lower than Apple’s current model, ” Bloomberg quotes Goldman Sachs analysts in a recent investor note.
By choosing to partner with a company like Magna, Apple can avoid the inevitable conflict of egos that would likely disintegrate if it chose a customer-centric factory partner. Part of me is still shocked that a company with so much experience selling things like Apple hasn’t just saved itself time and admitted it before.