To be fair, that was what a lot of people thought about Apple making a cell phone. That they'd never compete with Nokia or Motorola and that US carriers would never give them enough control.
The phone made sense to me because by that point Apple had clearly proven themselves as a consumer electronics company. It’s wasn’t as big a jump and cell phone software was largely junk.
The carrier thing was true, but they could have launched outside the US. Instead they found a carrier desperate enough.
But they’ve never done safety critical stuff like a car. Of highly mechanical stuff like a car. Or things that need something of a dealer network the way a car does (existing Apple stores wouldn’t cut it). And really I’m not sure how much they could add a special “Apple touch” outside infotainment/interior controls compared to luxury automakers.
If they a fully self driving car by 2018 and beat everyone by 7 years maybe. But as time went on it went from little to almost no sense.
I enjoyed following it for that reason. But I never thought it would happen.
> And really I’m not sure how much they could add a special “Apple touch” outside infotainment/interior controls compared to luxury automakers.
The right time was between 2010 (iPad launch) and 2014 (CarPlay launch), with a complete infotainment-only product.
Essentially, mimic the iPhone-on-one-carrier bargain.
Go to a struggling automaker (Fiat Chrysler?) and say "What if we told you that you won't have to worry about any of your infotainment solutions? We'll build the unit, in exchange for owning the exclusive app store it uses. And you'll get to say your cars are powered by Apple." Win/win.
Instead, they dicked around until the automakers figured their consoles out (mostly... still looking at you angrily, Nissan) and Apple was left without a key differentiator.
Hell, the mind-numbingly obvious reason for Apple -- do it at a loss for the real-time mapping and traffic data!!
I think the risk to the carmaker is your customers getting used to the apple infotainment system. Maybe they start to see the car as less a Fiat and more an Apple car. Then the exclusive expires or needs to be renegotiated.
From Apple's perspective, yes. That's exactly the playbook that built the iPhone into what it is today.
People forget that when the iPhone launched, carriers had an iron grip on their customers, to the extent of "pay us to put ringtones on our device that temporarily happens to be in your hands."
iPhone-in-car would have let Apple dangle some interesting data deals in front of car manufacturers, while retaining ultimate control, before the car manufacturers realized data was a monetizable revenue stream.
> But they’ve never done safety critical stuff like a car. Of highly mechanical stuff like a car. Or things that need something of a dealer network the way a car does
And SpaceX had never launched a rocket into space, until they had.
I don’t get this idea of a company like Apple not being able to get into a space, when tiny startups get into spaces all the time. Nobody expected Tesla to take on Ford either, but here we are. Surely Apples massive vault of cash doesn’t decrease their chances on ideas that fall outside their specialty.
Hmm I don’t think the SpaceX metaphor works super well here.
One is an established tech company trying to do business in a space it’s unfamiliar with. It has existing forces pulling it in a certain direction because it already makes money in those ways. Google is the perfect example of how this hampers innovation. It’s one of the reasons the concept of Alphabet exists.
SpaceX has one singular purpose. It’s not like it was trying to counterbalance its burgeoning space business with existing cost and profit centers that are not even tangentially related to its primary goal
> SpaceX has one singular purpose. It’s not like it was trying to counterbalance its burgeoning space business with existing cost and profit centers that are not even tangentially related to its primary goal
Apple used to be organized differently than other big companies, and more like multiple startups. Just look at the trajectory of other PC builders of the 90’s.
> And SpaceX had never launched a rocket into space, until they had.
But they were working towards that all the time. And then SpaceX didn't try to make a car, Tesla was started as a mostly-separate company to make a car. Because there's very little business synergy between those two things.
> Surely Apples massive vault of cash doesn’t decrease their chances on ideas that fall outside their specialty.
That cash ironically is an obstacle to Apple being able to innovate. Instead of creative problem solving it solves problems with cash. Instead of collaborating and recruiting people to come work for a common vision, they join to pursue cash and status. Apple is nothing but a “phone company” with a bank attached, which is fine, it will continue to operate, but it won’t continue to grow and innovate.
>Instead of creative problem solving it solves problems with cash. Instead of collaborating and recruiting people to come work for a common vision, they join to pursue cash and status.
Apple is rather frugal with acquisitions and hires and somewhat frugal with salaries.
I saw Huawei cars being sold in Huawei stores in China. (Huawei stores are like Apple Stores). They were incredibly normal, beautiful cars. In contrast, Apple would have to make a gamechanger. Too big of a risk?
> The carrier thing was true, but they could have launched outside the US. Instead they found a carrier desperate enough.
That’s not quite how that happened. They were turned down and laughed out of the room by nearly every carrier they approached. The only one that didn’t was AT&T; but they definitely weren’t “desperate” at the time.
They had lots of leverage, which is how they got exclusivity.
Sorry I meant the carrier was desperate, not Apple. That was the case with AT&T (Cingular when the deal went down). They wanted customers so bad they were willing to give up everything for a possible hit phone.
And it worked out.
You’re right Apple was riding high on the iPod, they weren’t in any danger of going under. They could have waited longer.
I think it would have been funny if they released it in Europe or something where the carriers weren’t in control and then told Americans “call your carrier, sorry, they wouldn’t let us”. Not that that would have ever happened.
I'm not sure if the GP here was edited to be substantially different, because your response doesn't match what they are saying.
AT&T wasn't desperate, and I'm sure Jobs would have preferred to skip on exclusivity, since that really didn't serve iPhone.
"Desperate for more customers"? Well sure, but I'm sure Verizon was even more desperate for more customers considering they were so close to being number one (AT&T was number one at the time, by a slim margin). After all, Pepsi literally bought restaurants and forced them to serve Pepsi in order to force consumers to drink their sodas from the runner up spot.
I don't have any reference for this, but just on its face it would make sense that if Apple needed to sweeten the pot for a carrier to allow it, exclusivity was a way to do it, and it would have been in Apple's best interest to pick the carrier with the biggest market share at the time, which was AT&T.
EDIT: Others corrected me that at the time the deal was signed in 2005 and during the famous 2007 keynote, the partner was Cingular. Through a series of M&A Cingular became what we know of as AT&T, and by the time the phone launched in July 2007, it was AT&T who held the deal.
Interestingly,
> Cingular chief executive Stan Sigman signed a secretive deal with Apple in 2005 before seeing any designs or prototypes of the phone. Other carriers had been scared off by Apple's reputation for controlling every aspect of its products. But Cingular and AT&T leadership saw the partnership's promise.
In Jobs' keynote he referred to Cingular as the #1 carrier with 58 million subscribers. I think the logic above still makes sense given that.
> The carrier thing was true, but they could have launched outside the US. Instead they found a carrier desperate enough.
The carrier the iPhone launched with in the US was AT&T. While they were neck in neck with Verizon at the time, AT&T had the technical majority of the market. How were they desperate?
Oh, it was Cingular at announcement and AT&T at launch. Interestingly,
> Cingular chief executive Stan Sigman signed a secretive deal with Apple in 2005 before seeing any designs or prototypes of the phone. Other carriers had been scared off by Apple's reputation for controlling every aspect of its products. But Cingular and AT&T leadership saw the partnership's promise.
Apple is still waiting it out until most of the existing EV issues are resolved. Then, they can swoop in and leverage their walled garden to get buyers/users. They'll also be different than Ford, Mazda, Honda, etc since I don't think they will try to sell their cars. It'll be a subscription fee and Apple will own the car.
All this news tells me is that Apple is putting EV in the back burner since users are still not convinced about EVs in the long-term. AI is here to stay so it makes sense pivoting the team to that. Hell, the AI might make it into their cars for all we know.
What does Apple‘s walled garden have to do with buying a car?
I’m so tired of people claiming apples walled garden gives them magic abilities. It has nothing to do with this. Do you really think people are going to pay an extra $30,000 for a car because it works with the iPhone?
I have an iPhone. I love Apple stuff. I’m not paying any premium for an Apple car, they have to convince me it’s worth it over the competition.
>Do you really think people are going to pay an extra $30,000 for a car because it works with the iPhone?
Given that 30k is the difference between an entry level and mid level car, sure. The premium brands would definitely want to get Apple's branding under their wing, and those buyers are already used to paying a premium when they can buy a $30k car.
The problem is I think Apple would want to be premium above existing luxury cars. I don’t think it would be 60k. I think they would be 90k or even 120k.
Sure Apple’s $60k car is better than a $30k Honda. But is it better than a $60k Acura or BMW or Lexus?
> Do you really think people are going to pay an extra $30,000 for a car because it works with the iPhone?
Yes. People happily pay an extra 1-200% for something because it's Apple, all the time. I'll probably never understand why, but I've come to accept that they do.
What does Apple‘s walled garden have to do with bluetooth headphones? Now, look at AirPods, simple bluetooth headphones, with tight integration with iOS. I was the one ridiculing Apple for even entering this market and I thought they looked dumb. Sony XMs looked way better.
Now headphones are a sizable market for Apple. So many of my friends are awaiting the refreshed AirPods Max. The same people that said they would never buy AirPods when they launched.
That's the thing. With other Apple devices, they're not simple bluetooth headphones. They have added features and functionality that only really work with other Apple products due to their proprietary protocols on top of regular Bluetooth. _No_ other Bluetooth headphones can work quite like Airpods do, because of the walled garden. So, you have your expensive Apple headphones that only really give full functionality with Apple devices so you're more likely to keep buying an iPhone. And vice-versa, you have more of a reason to buy the expensive Apple headphones because no other headphones will give the full experience the Apple headphones can give you on that platform.
Are there really features that Apple is going to bake into their cars to ensure it only really gets those features for Apple users? Like what, the head unit will only work with an iPhone? Would you really buy a $30,000+ piece of equipment that necessitated a specific phone model to actually get a lot of key features out of it?
Maybe an enhanced version of CarPlay or something more nefarious like cutting off other auto makers from using CarPlay anymore. People that are used to CarPlay might be inclined to jump ship. Trust me, Apple will find a way to leverage their walled garden, to my chagrin. Just look at how they’re maliciously complying with the EU DMA law. I want to leave Apple’s walled garden myself, but can’t deny it exists.
Subscription would be odd. All my other Apple gear I've bought for cash.
Also it would be odd for a physical thing you can crash/scratch. I mean you can hire or lease cars but there is generally a heavy cost if you trash it to be picked either by you or your insurance company.
Despite all the glittery rhetoric that "a car is just a computer on wheels", this always seemed like a bizarre move for Apple and I've never seen anyone explain what the strategic vision was supposed to be. Even with full lv5 autonomy, what's Apple's unique twist? Big monitors for watching TV+ in the car? That wouldn't have been remotely enough.
I think it’s a lot more simple than that. They’ll probably buy an existing EV company when they’re serious about entering the market. That’ll give them a head start and they won’t be reinventing the wheel. The acquihire will help bring in talent as well.
Before they released the AirPods, they bought Beats. It would along the same lines but with a way more complex machine.
>Even with full lv5 autonomy, what's Apple's unique twist?
Same as the rest of apples brand: "it just works". The seemless, polished integration of their products gave them a devoted fanbase that pays a huge premium over competition.
Not my point. Why doesn't Apple start manufacturing airplanes that "just work"? Fridges that "just work"? TVs that "just work"? (they did try and give up on TVs because it made no sense) Their brand marketing focuses on creative people; why don't they start making grand pianos? Those make as little sense as a car, and are just as far from Apple's competencies, competitive advantages, and market as a car. Companies don't enter random industries just because they can.
>Companies don't enter random industries just because they can.
Sure they do. Facebook was so confident in VR they rebranded their entire company. Elon Musk got his horrible bluff called out and he owns the largest social media site (for now). It's not business related, but the CEO of Amazon owns a national newspaper.
Apple car didn't come out of nowhere. They and Google were working on Car Os's for years and we both know Apple cares hough about vertical integration to shun off Intel and Nvidia in order to make their own chips. Regardless of my confidence in the idea, the act itself is consistent with Apple.
No one thought they would compete with Netflix and their movies are winning awards now.
No one thought they would cannibalize the iPod with a phone and they did.
The state of US tech companies is that they will also go into new markets. When Netflix came out, did you really think Amazon and Apple would get into that market? To Apple, cars are an untapped sector they'll want to tackle when their existing sectors are saturated.
Its strange to me you have a list full of "no one thought" statements that were all things that most of the people around me at least seemed like things Apple would do. Especially the movies and TV stuff, they already had a big marketplace for movies and hardware for watching movies and TV, other competitors in those spaces were producing original content, it seemed absolutely logical for them to do so as well.
The launch of the iPhone was rumored for a long while and seemed obvious to me and a lot of other people who paid attention to the smartphone space that they'd release something. More and more phones were being sold with music capabilities and were starting to get popular. If Apple didn't release the iPhone within a few years, competitors selling better all-in-one kind of devices (like the modern smartphone today) would have been there. Its just flash memory at the time was still rather expensive for a lot of songs, and even the first generation or two of iPhones had pretty weak storage compared to a regular full-fat iPod.
Apples strategy is to wait and see they are rarely first to put money into something where they can't learn from mistakes of others. iPhone wasn't the first mass produced smartphone and I'd argue Apple is a software company first and foremost, the hardware part is just the means to lock you in.
Cannibalizing your own product is an achievement when done correctly. You don’t see Apple running to add a touch screen to MacBooks because that would cannibalize the iPad.
Let’s take iTunes. People were clowning Apple for releasing Apple Music because they had millions of people buying Music on iTunes. Spotify showed it could work but they weren’t exactly making money over fist.
It’s been like a month. Seriously. That’s a ridiculous hurdle to clear.
“The new Samsung ring came out this morning. At 11:30 the entire management resigned in unison apologizing and cancelled the project due to low sales.”
A connected PDA was always a thing. Palm/3Com made phones. HP/Compaq made iPaq phones. Sharp made their Zaurus. The were OEM phones you could get branded. The Qt guys had their Trolltech phone.
Everyone wanted to see what phone software developed by an actual computer company who knew software would look like. Everyone and their brother wanted to see what an iPod phone would look like.
The Apple phone was perhaps the most anticipated device in years. What surprised people wasn't that they released one, it was that they went all in on a capacitive touch screen, which was novel tech, and that it didn't have real mobile data or native apps. There was this long song and dance about how apps were to be replaced by web pages but people were still skeptical.
Terrible compared to what? At the time, mobile applications were universally pretty crap. Browsers were atrocious, not being able to render real CSS or anything (they’d give you a simplified broken layout). I didn’t have the first iPhones (my first was the iPhone 4) but I had a first generation iPod Touch, and Safari felt pretty magical at the time compared to anything else on the market. The capacitive screen, multitouch, being able to decently render pages - lots of stuff we totally take for granted now…
The App Store became publicly available just one year after the original iPhone was released too - people seem to make out as if Apple held on for years and years but the SDK was announced less than six months after the iPhone’s release and was made available to developers a couple of months later.
Opera Mobile would render pages with heavy CSS (for the time) pretty accurately.
Even with Pocket IE, a lot of pages did render pretty decently. I was able to browse and post on phpBB boards and what not with it.
The browser built-in on the various Symbian devices I owned were also pretty decent. They were built on WebKit, supported real CSS, working JavaScript support, and more.
When you're talking about browsers on mobiles, are you talking just WAP browsers on dumbphones or actual smartphones?
To be fair, Symbian apps were quite okay-ish. I had Nokia 6600 and it had a lot of great games and apps. Of course, when Apple finally launched the Appstore, and apps there were able to use iPhone's touchscreen, it was over for Symbian.
Not really the point. Apple succeeded because they applied their strengths, product and user interface design, to what is essentially a small computer.
Apple have always developed core products that are essentially a computer.
Even though cars increasingly look like laptops on wheels, the actual computer bit is relatively minor and the user interface is mostly the wheel and pedals, not so much the screen.
> Even though cars increasingly look like laptops on wheels, the actual computer bit is relatively minor and the user interface is mostly the wheel and pedals, not so much the screen.
Ha, it seems like that to you because you are obviously a car person! For someone like me ideal Apple car would be something without any kind of wheels or pedals. Instead, I should be able to crawl drunk into it, mumble "Siri, take me home" and pass out snoring loudly on the back seat. I guess several years ago when it seemed that (true) self-driving cars are just around the corner Apple had something similar in mind.
I agree that a car is on a different scale, but I think it's only in hindsight that a phone is obviously just a computer and that the user interface is important part.
Do you really not see how a car is a much greater departure from their core expertise than the iphone? They were already making handheld electronic devices well before the iPhone. And they were making computers pretty much for the whole history of the company. Ipod touch was a natural evolution of the ipod and the iphone was basically just an incremental improvement on the ipod touch.
The closest thing they've made to a car is those wheels for the mac pro.
Because parents didn't want to buy an entire flagship smartphone just for their 6yo to listen to music on the schoolbus. But they were okay with buying them an iPod.
iPods were just mid-tier consumer-electronics expensive; which, back in ~2005, was nowhere near entry-level smartphone expensive, let alone flagship smartphone expensive.
Then, after the iPhone started getting rev after rev, Apple's "lean manufacturing" cost-optimizations gradually led to "an iPod" just becoming a particular assemblage of reused old iPhone parts, optimized for manufacturing cost and battery life. All the other iPods died out, leaving only the iPod Touch, there to consume old iPhone parts off the line.
Around six years after that, "a commodity Android phone" became as cheap as an iPod Touch. At that point, the Touch continued to exist mostly due to brand value, and its ability to run iOS games (still a specific / "better" market than Android games, back then), without having to pay for an iPhone to do that.
It's only in the last five years that it began to make economic sense to just get your 6yo who wanted to play iOS games an old iPhone rather than a "new" iPod Touch. It was at the exact moment that happened, that Apple finally killed the iPod Touch.
> Because parents didn't want to buy an entire flagship smartphone just for their 6yo to listen to music on the schoolbus. But they were okay with buying them an iPod.
Yep. Well said. The cost of a full phone + expensive plan is a lot.
Plus kids wanted the apps (really games) the iPhone had. Apple wanted to sell them games.
And besides that parents were far more hesitant to give young kids phones than (for better or worse) than today.
The final reason I’ve heard is the number of hand-me-down phones given to kids now that smartphones are ubiquitous means sales slowly fell to ver little compared to when introduced.
And further, buying your kid an iPod Touch at the time served the same purpose (for Apple) as buying your kid an iPad today. It gets them into Apple's products space, develops brand affinity and trust, and gets them familiar with iOS so that they are more likely to buy an iPhone.
It would be surprising if we had stats on iPad versus non-iPad kids and what percentage of them ended up being iPhone users, and those stats didn't show a strong correlation.
Turn your thinking around. The only reason we still call it a phone is because that's what the original function was. They are pocket computers in everything but name. A significant percentage of the population doesn't even use them for voice calls anymore.
And yet we're fine having the draconic business model of phone carriers from the 90s and early aughts carried into the modern day, just wielded by Apple instead of AT&T.
Computers run software the user asks for, phones run the software the phone manufacturer allows it to.
I think that’s why they were a bit more interested when the original idea was to skip all that and do all automatic driving.
But as soon as it became clear that wasn’t going to be an option I don’t understand why they didn’t just give up and instead seemed to try to shift towards a more normal car.
The problem is that smartphones had very little consumer uptake before the iPhone came out.
You had your Windows Mobile and Symbian devices, which were popular among hardcore turbonerds, but normies weren't interested in them. And that goes double for the US; there was more uptake of WinMo and Symbian in Europe, but very little in Apple's home market. The closest thing to a "normie" smartphone before the iPhone was BlackBerry, but most people who had one were business users who had their device issued and provisioned by their employer. And enthusiasts always pooh-poohed BlackBerries as "not a real smartphone" because it was basically just a messaging and groupware beast with limited general-purpose capabilities.
So there was a big gap to be filled. Enthusiasts had their market segment, business users had their market segment, but the ordinary consumers had nothing. And Apple gladly swooped in to fill this gap.
The problem is that cars are already ubiquitous, especially in the US. What can an iCar offer that a Toyota can't? Hell, even if you specify electric cars, other companies still have this covered. What can Apple offer that Tesla can't? And if you look internationally, it's even worse. You start selling electric cars outside the US market, you're going to end up going head-to-head with Chinese giants like BYD that are already kicking Tesla's ass outside the US.
The only real path forward for an iCar that does to cars what the iPhone did to phones is if Apple were to perfect true Level 5 self-driving. If they could actually pull off "Siri, take me to work", it would change things enough that normal cars would look like dumbphones compared to the iCar. But that's a pipe dream. Our roads are too chaotic for Level 5 to be feasible for a long, long time. In fact, I'm willing to bet that the reason this project lasted a whole decade was because Apple was throwing everything they had at Level 5 self-driving, and they canned it because after an entire decade they still couldn't make it work.
>To be fair, that was what a lot of people thought about Apple making a cell phone. That they'd never compete with Nokia or Motorola
Not true. I helped cover Apple for a large investment bank before and after iPhone's launch. If anything, Apple was the one company that had the technology and market credibility to immediately make a splash in the market despite being totally foreign to it.
>and that US carriers would never give them enough control.
We did think that there was a real possibility of Apple launching its phone in conjunction with an MVNO. But this was again out of belief that Apple had the credibility to immediately have millions of customers switch to it as their carrier, not because Apple—of all companies—could not get what it wanted from carriers.
Yeah but a cell phone and a computer are close cousins.
A car and a cell phone, or anything Apple has yet made, are wildly different. They may as well have had a battle tank program, or started making airplanes. Those things have screens and "infotainment systems" too.
Yes. Anything that has machined and injection molded housings, a screen, pcbas and software/firmware. Basically all consumer electronics are cousins in this context. Time doesn't matter here, industry verticals do.
Cars are wildly different, 50 years ago GE would have seemed like the one that would make a phone, not ford.
Before 2006 my phone was already my portable media player, my internet modem on the go, a quick web browser, my portable email machine, my internet instant messenger client, a mapping tool, and more. By 2007 I was even using it for video calls.
