How should we view Apple's new energy vehicles?

    On the morning of January 12, it was reported that in 2014, the iPhone ran a new nuclear powered vehicle project. Since then, the enterprise has experienced many errors. From 2016 to 2019, the new project laid off more than 100 employees. Because the cost rose rapidly, the enterprise also changed its key, from developing and designing pure electric vehicles to developing and designing driverless technology, Later, they changed their overall goal to go home and look forward to independence of nuclear powered vehicles again.

    If Tim Cook of iPhone EO decides to implement this new project again, he may encounter a difficult choice: how to enter this sales market famous for its low gross profit margin?

Although Tesla Motors has achieved great success in the stock market, the enterprise has already shown the potential safety hazards caused by lack of working experience in the automotive industry, such as repeated product quality problems and failure to complete the overall goal of production and manufacturing. Therefore, there is no doubt that the iPhone is not easy to produce cars by itself, but will outsource the business in the production and manufacturing work to a third party, such as magna, which has been emphasized by news media earlier.

    Hyundai also seemed to confirm the reports of Korean media. The company indicated that they had started a conversation with the iPhone, but then the company withdrew its statement. Similar cooperation can help iPhone deal with some parts problems encountered before.

    However, for cars, the situation is completely different. IPhone has already mastered this in 2016. If Apple cars are indeed released, no one can tell how many cars the iPhone can sell in the first year. Therefore, dealers basically have no driving force to produce professional parts for the iPhone. After all, dealers have large and medium-sized customers. For example, perfect automobile enterprises like you, who were able to sell 10 million cars smoothly at the beginning.

    Therefore, for the iPhone, if you want a nuclear powered vehicle, it is more meaningful to improve the strategic cooperation with automobile enterprises. Today, there are five automobile enterprises that are likely to cooperate with the iPhone: everyone, rylo Japan Mitsubishi alliance, Volvo and its goodwill head of China's general company, general motors and Hyundai Kia group. The automobile enterprises have a pure electric vehicle service platform enough to promote dealers to compete for contracts. Some enterprises have also indicated that they want to produce cars for other well-known brands. For example, they have already cooperated strategically with Ford and GM has already cooperated strategically with Guangzhou Honda.

    Even so, although collaboration with perfect automobile enterprises can help iPhone reduce the total cost level, iPhone still faces challenges at the profit level. Eric noble, chief president of carlab, an automobile consulting company, shows that compared with the production of cars, the cost of cooperation with contract manufacturers is generally higher than 10%.

The gross profit margin of the automotive industry is much lower than that of the iPhone. According to the report in 2018, the profit margin of Tesla's model 3 pure electric vehicle is around 30%, while the profit margin of Apple's iPhone is basically twice that.

    The key cost of pure electric vehicles comes from rechargeable batteries. Because the cost of raw materials is fixed, rechargeable batteries cannot enjoy the benefits of economies of scale.

In Tesla Model 3, the cost of rechargeable battery accounts for more than one third of the total manufacturing cost, about 13000 US dollars. If, as the news media said, the iPhone can reduce its cost according to the new battery, it will be more and more attractive to produce cars.

    If the cost of rechargeable battery can be reduced by 50%, even if the price of Apple car is the same as that of Tesla, its operating capacity will be basically the same as that of iPhone.

Price is the most self-evident way to overcome obstacles. IPhone is not easy to produce a car for everyone to sell. It must be a luxury car, and its price is likely to be above $100000, especially if the car has the function of driverless, because such a car will use complex and expensive millimeter wave radar sensors.

    In theory, Apple's price strategy will be similar to that of the iPhone, but in fact, it is for a completely different consumer class, so it is not very easy to market cars for the iPhone.

    Previously, Dyson, a vacuum cleaner manufacturer, also expected nuclear powered cars, but when they realized that the price of their cars would reach more than $200000, they gave up the plan.

Compared with Dyson, the iPhone has a higher opportunity to become a real automobile enterprise. In terms of mobile phone software and design scheme, iPhone has more advantages than current automobile enterprises, and even has more advantages in new batteries, although this advantage will not continue all the time. The best development strategy for iPhone is to manufacture high-end cars and become competitors with Lamborghini, rather than competing with Tesla for the sales market.