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Comment by jcfrei | Hacker News Reader

I doubt Apple will ever launch its own car. However it seems that quite a few large IT firms consider DaaS (Driving as a Service) a viable B2B market. If you can create a superior suite of machine learning tools (including always up-to-date road data) that successfully drives passengers and goods from point A to point B then you can secure big revenue streams from automobile companies for years to come.

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I agree. Take a quick look at the value chain, and think about who is going to capture the bulk of the margin. Is it the company building thousands of pounds of commodity pig iron? Or is it the company providing the machine learning secret sauce? Or is it the company making must-have sensors. My bet is on the software and the sensors.

PC's of a couple of decades ago provide a parallel. Microsoft getting 10's of dollars of margin off every PC, Intel getting 10's or maybe 100+ dollars of margin off every PC, and motherboard makers with a gross margin of $3 per board. Much less the case makers....

The old line auto manufactures are building cases for the computers and software that are tomorrow's self-driving cars.

> I doubt Apple will ever launch its own car.

It's a large consumer market that's changing rapidly and ripe for disruption. Why would you doubt that Apple will enter it?

Because manufacturing your own car in large quantities is very difficult. Tesla is a good example on how difficult it is to scale up production numbers. And even though the market / products themselves are changing rapidly the required expertise for a mass production of cars remains the same. I think an acquisition would be slightly more realistic. But has Apple ever acquired an entire product line? I don't think that's in their DNA (EDIT: Beats being one notable and recent exception...).

I agree with your conclusion, but I think your analysis is dead wrong. I don't think Apple would have problems manufacturing cars at scale. They have virtually unlimited money to aquire people with the know how, and to invest in factories. And they have lots of experience with manufacturing already. Sure, cars are different from consumer electronics, but not in any insurmountable way.

The real reason I think Apple would pull the plug on it's car project, is if they believe we are about to move to a transportation as a service world. Ride sharing and self driving cars are trends that point in that direction. Apple is a (consumer) product company. Their internal structure is set up to make the best consumer products and sell them directly to consumers. They are not set up to be a services company. Being a (successful) services company is to some extent antithetical to being a successful product company. Apple knows this.

>Sure, cars are different from consumer electronics, but not in any insurmountable way.

Perhaps not "insurmountable"...

...but you realize that what Apple currently manufactures is equivalent to one single, near-insignificant component of what goes into a car: the on-board navigation system.

Building a car is hard. I don't think Apple can't do it, but I'm convinced they won't find it "worth it".

No, building a car is actually comparatively easy, as evidenced by the myriad of boutique super cars. It's especially easy if what you want to build is an electric car, because electric cars have an order of magnitude fewer moving parts compared to an ICE car. What is difficult is mass producing a car, as evidenced by Tesla's difficulty in doing just that. But Apple has lots of experience at mass production, and they have the means to acquire whatever talent they lack. That's not to say that they are guaranteed to succeed, but they have a much, much better chance than almost any technology company.

Because transportation will become a service, rather than a product [1].

[1] https://en.wikipedia.org/wiki/Transportation_as_a_Service

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