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Apple to follow the same business approach of iPhones to its new venture into Car manufacture

Gadget Insights: As Apple planned to enter into the Automotive business, it first planned to get into a contract with a renowned car maker in the world to manufacture its cars.

Gadget Insights: As Apple planned to enter into the Automotive business, it first planned to get into a contract with a renowned car maker in the world to manufacture its cars. But, as many rounds of talks with many renowned car makers ended fruitlessly at the end, that it will play its new Automotive Business game like how it played and it’s playing its iPhone business games.

Apple to follow the same business approach of iPhones to its new venture into Car manufacture - Gadget Insights - Apple Car - The Wall Post
Apple to follow the same business approach of iPhones to its new venture into Car manufacture

So, this would mean that, similar to its iPhones, Apple would design its own components, its looks and its inner-workings of its proposed automobile and would sign up with a lesser-known auto manufacturer to manufacture Apple’s new car. As Apple’s talks with known car makers just went down, this seems to its only option to start its Automotive Business.

Apple had three options in mind: 1) To build its own auto manufacturing facility, 2) To partner with an existing and established car maker and 3) To sign up contract manufacturers (like for its iPhone, it teamed up with Foxconn, Magna International, Wistron and etc).

Also Read: Apple November 17th Event to Launch First ARM-Powered Mac Machines: Report

Apple wanted to develop an autonomous system for its vehicle, interior and exterior, on-board designs and tune-up its vehicle efficiency to its own taste. Apple wanted to even design its own seating and body aesthetics by itself, basically it wanted to change the perception of how a car works in general, said a leading company executive.

Having such ambitious details for its own car in mind, it will be not easy and viable to approach established makers in the market to make a car for Apple as those companies will never help their own competitor to excel better than themselves and the exclusive and unique details that Apple has in its mind for its car will just be easily stolen by many.

Companies like Hyundai, Kia Motors, Nissan, BMW, Ferrari and a California based auto maker known as Cupertino were approached by Apple but those talks were fruitless as mentioned earlier. This will be like asking Samsung Electronics to manufacture Apple iPhones exclusively. On the other hand, is the idea of setting up a manufacturing plant.

Companies like Tesla run their own manufacturing plants, lost billions in its factory units for many years since production started, it is only recently those factory units have started making any profits for Tesla. Last year Tesla reported profits of $700 million. If going by this business model of having its own manufacturing plants, Apple will make very less profits than it expects. Profit margins of Auto industries are generally lower than of Apple’s, says the consulting firm Goldman Sachs.

Also Read: Apple Event: Iphone 12, Mini, Pro, Pro Max, 5G phones, Homepod, price in India

So, most likely Apple will team up with lesser-known contract car makers to make its cars, says Eric Noble, president of CarLab, a consulting firm. Foxconn or Hon-Hai Precision Industry, a Taiwan based electronics manufacturer who has been with Apple’s iPhone development is now branching out into auto-making as well. Its currently in deal to make 2,50,000 EVs for a Start-up named Fisker Inc.

Another company named Magna, also had made iPhones for Apple and have ideas to make EVs together. Magna seems to a good choice for Apple already says, Eric Noble. For now, this is the furthest updates that we have now on Apple new car venture. Apple has also actively recruiting professionals with car knowledge.