Tag Archives: automobiles

Quote

Is the Citroën Ami One the future of urban vehicles?


I am not sure of the viability of this vehicle, licence or no: You don’t need a licence to drive the Citroën Ami One in Yanko Design,

I do think it is interesting though. And Yanko Design has great photos and a write up on it. Worth reviewing and considering it. We need alternatives to the automobiles we have now. Perhaps this is it.

On the future of Apple and the case for an Apple car

Well-respected Apple analyst Gene Munster of Piper Jaffray gave a presentation on the company’s future at Business Insider’s Ignition conference and it’s really good. The entire presentation is here and worthwhile: Future of Apple presentation by analyst Gene Munster at Business Insider Ignition – Business Insider.

Earlier I wrote about how I don’t think Apple will get into the car business. However, after reading what Munster said, I can see how others think Apple will get into cars. Specifically, here’s are the pro-car points he makes:

  • Apple could align with and compete in the BMW market: BMW sold 1.8M cars in CY14.
  • If Apple priced them at $75K, 1.8M cars is $135B in revenue
  • Apple could start small: sell 30K in first year (similar to Tesla’s 35K in CY14)
  • In a market of 88M cars in CY15, 1.8M cars is nothing

The approach laid out in those points is a similar game plan that Apple followed in the smart phone market.

The more I thought about it, the more I am leaning towards Apple getting into the car business, at least in a limited way. The bulk of the market would not be Apple and there likely would still be lots of car manufacturers after Apple jumps in, just like there are many smartphone makers. But Apple would take over the most profitable part of the car manufacturing marketplace.

Read the analyst report: you will get great insight into where Apple is heading.

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