From one point of view I don't buy in the skepticism surrounding an Apple Car. As many issue could exist, and this article present a long list, Apple has the resources and the capabilities to overcome them.
The problem for Apple right now is that is so huge that any business idea is so small in scale that doesn't move the needle. I mean a 1 billion dollar idea is a great pitch, but for Apple is less the 0.5% in revenue, doesn't make the board level.
From this point of view there are very few industry where you could venture with such a huge scale. The automotive industry is one of them and appears to be ready for disruption.
The problem as mentioned in the article is the incredibly low margin. I don't believe you could cut a lot on the cost of production, years of experience have optimized the process an the material that get into a car is that much, you could reduce them by a lot without impacting safety. Apple could try to put a premium on their car, and the margin on ultra-high premium car (Ferrari, Lamborghini...) are higher than Apple's margin. But the price is so high that the revenue is razor thin. The point is, a 30% premium on a device that costs on average 400$ is 120$, doesn't reduce the buyers pool by a lot. A 30% premium on a 20K car is 6K, it change a lot. And if you go in the premium segment is even more.
Final consideration, maybe the price Apple is aiming are not electric car but direct competition with Google's self-driving car. Or if you want car as-a-service. It is something not totally in Apple's DNA but it could provide hefty profit margins. Could be that the release date is 2029 and not 2019?
The problem for Apple right now is that is so huge that any business idea is so small in scale that doesn't move the needle. I mean a 1 billion dollar idea is a great pitch, but for Apple is less the 0.5% in revenue, doesn't make the board level.
From this point of view there are very few industry where you could venture with such a huge scale. The automotive industry is one of them and appears to be ready for disruption. The problem as mentioned in the article is the incredibly low margin. I don't believe you could cut a lot on the cost of production, years of experience have optimized the process an the material that get into a car is that much, you could reduce them by a lot without impacting safety. Apple could try to put a premium on their car, and the margin on ultra-high premium car (Ferrari, Lamborghini...) are higher than Apple's margin. But the price is so high that the revenue is razor thin. The point is, a 30% premium on a device that costs on average 400$ is 120$, doesn't reduce the buyers pool by a lot. A 30% premium on a 20K car is 6K, it change a lot. And if you go in the premium segment is even more.
Final consideration, maybe the price Apple is aiming are not electric car but direct competition with Google's self-driving car. Or if you want car as-a-service. It is something not totally in Apple's DNA but it could provide hefty profit margins. Could be that the release date is 2029 and not 2019?