Apple will not be getting into the car business, no matter what you read, because…

…it makes no business sense. A key take away from the article linked to below:

Ford’s revenue and operating income: $134 billion, 3.9%. Apple’s corresponding numbers: $234 billion, 40%! Or consider the world’s two largest car companies, Toyota and Volkswagen, both of which hover around $200 billion in revenue. Toyota just reported a higher than usual 10% net profit versus Apple’s 22.8%. The Financial Times recently pegged the VW brand’s operating margin at about 2%. (We’ll see how the German auto giant, which was ever so close to taking the industry’s Ichiban ranking from Toyota, extracts itself from its current engine management software troubles.) Yes, the car industry is large (around $2 trillion—that’s two thousand billions), but it grows slowly. In 2015 it saw 2% annual growth—and that was considered a good year.

There are so many other lines of business that could bring more revenue and profit to Apple. Unless the car business changes dramatically — and that is possible — then I can’t see how it makes any business sense for them to become car makers.

For more details on this, see: Why should Apple even bother building a car? – Quartz

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One response to “Apple will not be getting into the car business, no matter what you read, because…

  1. Pingback: On the future of Apple and the case for an Apple car | Smart People I Know

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