According to this chart, Apple spent $6B in 2014 and is projected to spend just over $10B in 2016.<p>For comparison, in 2014 Volkswagen spent $13.5B, Samsung spent $13.4B, and Microsoft spent $10.4B. [1]<p>Apple has, historically, not been a big spender when it comes to research, tending to favor short-term, tightly focused research over long-term, curiosity driven research. Over the last few years their research budget has ballooned, but only in 2017 (projected) are they going to reach levels that the above companies were spending at in 2014. Has Apple's research focus changed?<p>Perhaps we're not seeing some monumental project in the works, although an autonomous car would be pretty big. Perhaps what we're seeing is Apple deciding to loosen the purse strings and, instead of stashing away obscene piles of money, they've loosened their research focus and now have a lot of people doing whatever the hell they want, much like MS, just because something useful might someday emerge.<p>Let's face it, Apple has so much money they could probably launch their own space program if they really wanted to.<p>[1]<a href="http://fortune.com/2014/11/17/top-10-research-development/" rel="nofollow">http://fortune.com/2014/11/17/top-10-research-development/</a>
It's a car and it's not a "pivot". The Mac, iPod, iPhone, iPad, Apple TV and Watch are all about apply the same philosophy to new product categories and then tightly integrating them. At the core of it is fundamentally rethinking the interface between user and machine.<p>With cars it makes perfect sense as long as you do one thing first: throw out everything you've read about fully autonomous cars being right around the corner. If instead we're facing a future of <i>semi-</i>autonomous capabilities which still require a human to oversee and guide -- much like the autopilot controls of airplanes -- then there is a massive opportunity to rethink the automobile interface from the ground up around this new hybrid approach.<p>You can be sure that Apple's car will not just be a Jony Ive designed Tesla. It will involve a rethinking of the user interface. Apple likes to make a 10X difference when entering product categories and that's been the key element. Effective autopilot assistance features can plausibly get us to 10X improvements in safety and convenience.<p>Apple's functional organization is one of its secret weapons in applying this philosophy consistently across so many consumer categories and creating a halo effect. I would be very surprised if they changed that for computers-with-wheels.
I think median Software Engineer Salary also followed hockey stick graph over last couple of years, as well as CA real estate prices, so it isn't that clear that Apple grew headcount at all.
When iPhone came out there was no app store nor 3rd party apps; when apps arrived they had no push notifications; icloud didn't exist and so on. Products become exponentially more complex, requiring proportional growth in R&D. There may even be tax incentives to maximize R&D spending.<p>Smart home / smart appliances would be a much more logical step for Apple as it'd be much closer to their area of expertise in electronics.
Unlike with iPod and iPhone, there's at least one company that is already doing all the right and hard things around cars - Tesla.<p>TVs, kitchen appliances, even lights are much better understood and researched. Technology is there, safety/regulatory barriers are lower than with cars, consumer demand is pretty obvious. Yet existing manufacturers releasing product after product with laughable design and usability. Just like used to be the case with Nokia and Windows smartphones.
Is this a surprise? Isn't it well known that Apple is working on a car?<p>I think the big question here is not are they working on a car, but can they deliver a car that represents a significant improvement over what's out there. And that i'm highly skeptical of, unless they deliver full autonomy. But there is just no way Apple is going to beat Google to market with that technology.<p>So, I agree they're working on a car, but I feel fairly confident that it will be an absolute disaster for them. Though most times that's been said about their products in the past decade or two has been a disaster for the person saying it.
I don't understand the confusion on what Apple's next big thing is, they've laid it out time and again.<p>Come to think of it, I think I just saw a slide with it right on the single slide during the Viv presentation. I went back and found it. Here is the video URL at the time the slide is shown: <a href="https://youtu.be/Rblb3sptgpQ?t=51" rel="nofollow">https://youtu.be/Rblb3sptgpQ?t=51</a><p>It's the same thing OpenAI, HARC, and other groups are working on: creating revolutionary intelligent assistants and possibly achieving strong AI. The chance to work on that project at Apple, that I might consider a move for.<p>Applied AI combined with conversational or AR interfaces to create specialized personal assistants will be the next in the line of game changers such as car, flight, radio, telephone, computer, rocket, internet, cell phone, the web, smart phone, tablets, and data mining.
I don't like the idea of Apple (or even Google for that matter) making cars. It seems like such a weird space for a company that makes consumer electronics parts to move into. It would be almost as weird as them starting to build houses. And I don't want to buy all my stuff from one company.<p>Either way, I'm skeptical that any company is going to make huge, monopolistic profits from selling autonomous cars. It's something that's going to easily commoditizable. Consumers aren't going to care which company their buy their autonomous tech from, as long as it's safe and it works.<p>A better fit (although much, much, much harder to achieve) for Apple would be a real robot/android. Apple has hundreds of billions in cash to play with and a steady stream of income on the horizon for the next few years. I think they should accept that they don't have to come out with the next big hit every year. They should look 10+ years in advance and try to beat everyone to the <i>last</i> consumer electronic product.
According to venturebeat[0]. Samsung has 1m gear VR users. We all know how apple has a far superior supply chain, creates better software experiences and does things "right".<p>So is it that much of a stretch for them to actually come out with a mobile VR headset?<p>Think about it.<p>- They make the phones.<p>- They make the vr software.<p>- They already have the eco-system for you to get apps from and the developers to sell through.<p>- They can sell upgrades for face/hand tracking, etc.<p>What about a version of FaceTime, where 2 people can call each other and play a game together?<p>Within a very short time could exceed what Oculus is doing very quickly.<p>[0]: <a href="http://venturebeat.com/2016/05/11/oculus-and-samsung-have-1m-gear-vr-wearing-users/" rel="nofollow">http://venturebeat.com/2016/05/11/oculus-and-samsung-have-1m...</a>
The other depressing interpretation is that they're achieving less per dollar spent on R&D (becoming less efficient); they certainly seem to be achieving less per release of product now, so it would be consistent. Maybe there was a time when Apple got the most brilliant people wanting to work there because it was Apple; if that's no longer true, their efficiency would decrease.<p>(Arguably the same thing happened in K-12 education; when women were largely excluded from other professions, teaching positions were filled by the best women in the workforce; now, many of them would rather be doctors/engineers/lawyers/etc., so the quality of educators has decreased to the market level.)
I have to ask: Why cars? Why are Google, Tesla and now Apple supposedly investing in cars?<p>From the European point of view cars seem to be a dead end. More and more people live in an urban area and more and more young people use public transportation way more often, than cars. Additionally carsharing makes owning a car in a german city kinda obsolete.<p>So... why cars?
I wish it was possible for Apple to settle in and polish, competently executing on designs that are already very good and slowly improving their entire lineup (including, please, monitors!)<p>It's rather depressing to consider that excellent industrial design can only be supported on the exponential-looking part of the sigmoid curve.
I have long thought that Apple was working in secret on a consumer robot; perhaps something on the order of $1-5k price point. It was just a hunch.<p>I've now begun to think that the increase in what everyone is calling "R&D" is just Apple become too large to any longer be efficient. Perhaps they've crossed that point mentioned in the Mythical Man Month where gains in team size decrease productivity.
>After analyzing the three preceding possible explanations for Apple's R&D increase, we can conclude the only one that actually makes sense is the third choice: Apple is looking to pivot.<p>Can we really conclude that? Good geez.
I think the ideas presented appear somewhat contradictory. I may be missing something here because the following 2 ideas seem contradictory to me.<p>1) Apple's secrecy
2) Apple's pivot<p>If they're pivoting, why be secret about it? One of the reasons provided was that being public about new products could hurt current product sales.<p>If it's an entirely new product line (ie. car), I have a hard time believing someone will think twice about buying an iPhone because Apple is coming out with an electric car.<p>Instead being secret seems it may hurt more than help. If I'm in the market for a new car, and there's a real release of an affordable Tesla that has already happened, while at the same time I have no idea what Apple is doing or if they're even going to do it or what kind of timeline the project is on, I'm probably going to buy the Tesla.<p>Otherwise if I'm somewhat certain that Apple may be coming out with a new car within a year or two, I may decide to hold off with my purchase of the Tesla for the time being in order to consider buying the Apple iCar when it comes out.
Apple was once considered extremely innovative despite its secrecy because it regularly shipped ground-breaking new products like OS X, its breathtakingly high-design computers in the late 90s and early 2000s, the iPod, and of course the iPhone.<p>Apple hasn't shipped a successful new product line since Steve Jobs' death, and sales of its last successful major product — the iPhone — now seem to be slowing. Their cloud efforts are famously flailing, and their software is increasingly stale: who here has a folder full of unused Apple apps, with better third-party replacements on their home screen or dock? Almost everyone with an Apple device.<p>I sit here writing this on a Macbook, unironically. Their hardware manufacturing capability is best in class, and they've managed to hone their existing products' hardware increasingly close to perfection. But innovative? You can't be innovative just by spending money on R&D. You have to ship new products. And for now, Apple seems like it can't.
Isn't it basically impossible for Apple to surprise us with a driverless car? Surely all of the process to make a driverless car legal would be in public?<p>Surely the production line for any kind of car at all would be almost impossible to organise covertly, all the factory space, tooling etc?
Assuming its a car..<p>Cars are not phones and I don't see the massive factory/production line being prepared to build the cars nor the investment in battery production that would be required (assuming an EV not an ICE) so unless they buy BMW (LOL!) or another car manufacturer then it will be 3 years minimum from them showing a car to us being able to buy it.
The idea that Apple is going to "pivot" is fatuous.<p>Are they working on some non-phone products that they hope will be big? I'm sure they are.<p>Could they conceivably find that one of those products achieves massive traction and overshadows the iPhone (especially as the market for smartphones cools)? Sure, though I'd bet against it actually playing out like that.<p>Is Apple making a big planned play to radically deemphasize smartphone sales in a desperate gamble to become a car company? <i>Of course they aren't</i>.<p>Even if the smartphone market's high-water mark was 2015, Apple has a hugely successful, almost grotesquely profitable product that will -- assuming they don't do something absurd like pivot away from it -- be the source of incredible value for at least a decade and probably much more. On the back of the iPhone, Apple has grown to a market cap that -- even after recent losses, and despite a weirdly low P/E -- is massively higher than the <i>combined</i> market caps of the top five auto companies.
They are not working on "just a car."<p>They are trying to become a mass transit provider by owning and operating a large fleet of those self-driving cars, renting them out on a per-ride basis.<p>That is, if they're smart.
Apple may be developing automatic driving technology, but actually making cars seems unlikely. They mostly outsource manufacturing, after all.<p>Apple might be working on something to take a bite out of Facebook or Google Search or Amazon's Echo. The next big thing is likely to be "you just talk to it and it does the right thing". Siri with common sense.
Has anyone mentioned that maybe Apple just doesn't have the focus (Jobs) at the top telling it where to spent R&D? How much did Apple spend on R&D under other CEO's when Jobs left?
I don't think Apple would necessarily have to build their own cars from scratch or solve the alternative fuel issue or deliver a self-driving car to have a significant impact on the automobile industry.<p>For example, I would personally love a Subaru that had its information and entertainment systems designed and built by Apple and licensed to Subaru. It would also be cool if Apple's designers helped with the overall exterior and interior design.
Apple snatched a few Tesla employees and a few people has said that Apple are working on a car. Seems obvious.<p>Has anybody considered that it might be other form of transportation? Maybe an electric motorcycle or some other cart? All their devices is very personal, could be a personal transportation device?<p>Apple's mission seems to be to create the best products they know how to build. But environmentalism is pretty highly valued at Apple, so it seems likely that they will move towards things that they think will benefit not only their costumers but also the environment.<p>But Tesla's mission seems to be about accelerating the adoption of electric cars. They need "everybody" to produce electric cars, so it is in Tesla's best interrest that they build a car. It will be interesting to see if Apple picks up on Tesla's R&D, with the opensource patents and maybe even a Tesla Gigafactory.<p>But very interesting to follow, hope they make a car and hope they make it great. But I am afraid they lost their cocky edge a few years ago, so it will probably just be a nice new car.
Why not financial services?<p>There's a handful of small players testing the banking regulations now (like Mondo) to get authorised as basically "iPhone banks" - modern, mobile, without the legacy and technical debt.<p>With Apple Pay (and their $billion reserves) Apple could conceivably sweep in and buy up these newly regulated challenger-banks and buy their way into FS overnight.
The author is correct that Apple is haunted by the iPhone's success. My 2 cents:<p>1) The car business delivers lower margins than the iPhone. Even if you compare them to those of premium car companies (like Range Rover, Audi, Mercedes, BMW or Lexus).<p>2) The iPhone didn't had comparable brands to compete against, when it entered the phone market. It came with a hefty price tag. A sum that was never even considered mass-marketable before. The iPhone created the premium sector for phones. It raised the share of income people considered plausible for cellphones.<p>The author is also right in that apple is very good at applying their business model to new markets. But<p>3) to become premium in the car business either means<p>- lowering their margins<p>- producing cars that aim at a smaller/niche market (Porsche to Ferrari/McLaren),<p>- lowering the costs of the supply chain currently in use by other premium car makers.<p>The last one would be doable, certaintly by Apple. Certaintly with EVs. But I doubt it would be doable without any information leak other than this article.<p>4) More plausable for apple's margin territory would be an attempt at the user interface of cars. Like appleTv is for television sets or the healthKit-API.<p>The problem with cars is not the getting-from-a-to-b-part, not the status-part or the comfortable-interior-part. The problem with cars is the user interface-part, it's the outdated-touchscreens-part or the connecting-and-charging-and-holding-your-phone-part. It's the car's software that sucks. And for some that sucking software includes the driving-yourself-part. Reaching out to current premium car-makers also points into this UI/API-direction.<p>5) Also there are a lot of lower hanging fruits out there, easier to tackle than building a premium car. Like VR or building physical television sets, home automation, healthcare - or wait, software.
I think I would be more excited if Apple were researching ways to remove the cell phone completely, at least in a physical sense. Think about it, with the rise of things like AR/VR for output and Viv for input, what need do we have of a handheld device? Everybody is concentrating on the next iPhone, but what if it is a set of contact lenses and headphones? I think that would truly blow people's socks off.<p>Sure, Apple could be (and probably is) working on an automobile of some sort, but that seems like it would be difficult to really make a 10x improvement on. Especially with all the rules and regulations about what can be considered a car; it must have mirrors, steering wheel, pedals, etc. The prospect is so limiting. Besides, I think Tesla is rocking the automotive world and Apple would probably be better teaming up with them than going alone.<p>Just my $.02 worth.
No what I think is happening is this:<p>- Apple is investing more in ancillary services (iCloud, Siri, Maps, new Arm processors, etc)<p>- More investment into manufacturers to get the latest tech (retina, etc)<p>- Some of it is lacking focus and spending a lot of "R&D" money in irrelevant stuff (like most big companies do)
Great post.<p>A keyword is missing - <i></i> autonomous <i></i> car - maybe the first couple of versions will be manual but they can be relevant in the long term only if they are working on bringing autonomous cars to the market as fast as tesla/google.
Apple certainly does well in investing in R&D and looking towards some amount of pivoting.<p>However, this quasi-exponential growth in spending reminds me of a pathetic moment at a EU commission meeting I attended, on research and innovation public funds in 2010.<p>The EU commissioner basically complained that Europe had no Unicorns like the GAFAs, but wanted to be reassuring: this is about to change. We will prevail, <i>because</i> we'll spend more on R&D (through tax money) than all of these do together.<p>With the implicit assumption that the more you spend, the bigger the returns.
I really wonder how they will differentiate themselves from Tesla's offerings. Tesla represents the very cutting edge of innovation in the automotive industry being the leaders in autonomy, EVs, battery production, the chargin network, etc.<p>I wonder if Apple will partner with Tesla to use their Gigafactory batteries and charging network. If not they would have a lot of ground to make up.
Since there was talk about Apple Watch, there also was a lack of wow effect people had expected from it. Considering Apple’s human power, there is something going that takes time. Might be a car, might be something else. Smartphones have plateaued, so they’ve been working on something greater long before growth had slowed down. Time will show.
What are the margins in car industry? iPhone margins are enormous, so how do cars really compare? Is it even worth pivoting into this industry when you're already a big player in a more valuable industry?
They are working on a "next-gen" operating system. Something entirely unlike what we have come to know as a GUI.<p>I just thought I would leave this comment here so in a few years someone will find it.
I suspect the Titan codename is a trick and they're actually working on single-occupant vehicles.<p>HMD and transport are the obvious markets to tackle.
There's so much Apple could be doing that are a more natural progression from their existing product lines. They could take inspiration from some of their previous consumer efforts to target entirely new product lines, such as a camera (QuickTake), printer (LaserWriter), or game console (Pippin). A modern version of all these would sell out.<p>Or they could reintroduce their enterprise/business products, such as XServe.<p>The electric car idea really won't be ready anytime soon, due to limits of neural-net learning speed.
I’ve read a number of articles about the prospect of an Apple car but most have still left me with more questions than answers.<p>My main questions regarding an Apple car are the following:<p>1. Apple seems reluctant to chase market share at the expense of profit. The automotive industry is very well established and from my understanding operates on razor thin margins. Apple seems to be a master of the supply chain but much of this has to do with the fact that they ship such large numbers of very similar hardware. Apple doesn’t ship the most smartphones in the world but they do ship the most of a single model and this allows them to put incredible pressure on their suppliers. Does anyone expect Apple to be able to move so many cars that they would be able to put more downward pressure on suppliers than the traditional automakers?<p>2. If the strategy isn’t to dominate the market and thus assert downward pressure on suppliers then I would assume the strategy would be to sell a premium car that carries higher margins. Apple obviously has a well deserved reputation as a premium product within the computing/electronics space but is it a given that this would translate to the automotive market as well? I don’t particularly care for a brand’s prestige but I know this does inform many consumers’ decision making. Apple might be viewed as a premium brand compared to Samsung/Moto/Lenovo/HP/etc, but would most consumers be willing to pay a premium for an Apple car compared to a BMW or Mercedes?<p>3. Is there any reason that Apple’s prowess in the electronics supply chain may not translate well to the automotive supply chain? These two industries seem very different to me.<p>4. Apple, like almost everyone else in the tech industry, uses outsourced manufacturing for the majority of their products. While there are similar contract manufacturers in automotive, they are not nearly as large nor their use as wide spread, to my knowledge at least. Foxconn was already one of the biggest electronics manufacturers even before they started building iPhones for Apple, I don’t think a Foxconn equivalent exists in the automotive world. I would imagine this may present problems for someone like Apple that doesn’t plan on actually building their own cars, or do they?<p>5. There is considerable risk when launching a car model, even for the established players, I would assume the potential risk for a newcomer would be even greater. Newly introduced cars seem to suffer from more serious and more widespread problems than newly launched smartphones/computers do, although those often suffer problems as well. Does the potential exist that problems encountered with a newly introduced Apple car may carry over to negative perceptions about the broader Apple brand? It seems enormously perilous to me to risk your brand reputation on one specific product line that traditionally tends to be both very low margin and suffer from frequent defects.<p>I’m curious what others may think of my concerns or if anyone knows of articles that have gone into more depth with regards to my concerns.
Apple's not going to pivot. I'm sure they'd like to, but I can't really see what they would pivot too. Instead they'll just throw their hat into the usual next big thing everyone else is chasing - VR / AR and electric cars - of which I don't think they'll have a lot of success in. Their bread and butter will always be the iPhone and they'll ride that wave until it comes crashing to the shore.
Even if Apple is working on a car, I can't imagine that it will cost any less than $50,000. I've always felt the amount of money people spend on luxury vehicles is obscene.
Apple needs a visionary. Google, Amazon and Facebook all have founders who are visionaries and drive the focus of the company. Tim Cook could be a great CEO, but he is not a visionary and does not drive products. Who is driving the vision at Apple? It's not Jony, I have no idea who is doing that. That is also something you can't do by committee. Apple seems to be really floundering and does not have any great visions for new products or focus to make people excited!
People have certainly slowly lost interest in the iPhone. Apple needs to spend its cash and bring Elon Musk onboard!