johnny Posted October 9, 2015 Share Posted October 9, 2015 Well if we didn't have confirmation already, I'd say Elon's tone there is pretty much confirmation that everybody is getting ready for a head-to-head. Link to comment Share on other sites More sharing options...
giofranchi Posted October 9, 2015 Share Posted October 9, 2015 With due respect, even novice COBF readers with interest in AAPL probably already have AAPL on their watchlist on things like SA (and Google Alerts) etc. So I think these constant news link posts by you are overkill and are essentially spam. Believe me: I got the message the first time! When Liberty pointed it out! ;) Personally, I agree with the last article I posted the link to, and I find this idea very true: that each year a new model of mobile device comes out Apple’s competitive position is thought to be seriously threatened… Basically the reason why it is 10 years I have been hearing why Apple is going to encounter unsurmountable obstacles, while instead it has always kept growing and has always kept making lots of money for its shareholders. If that view weren’t relevant anymore today, I guess Apple would not be trading at such a low multiple… Cheers, Gio Link to comment Share on other sites More sharing options...
DeepSouth Posted October 9, 2015 Share Posted October 9, 2015 Sincerely, that is less than I thought… Cheers, Gio Yeah, I'm subtracting out all of the liabilities and adding back in things like inventory and Land (at a haircut) -- so it's more of a gross liquidation value than net cash on hand. There's no reason they couldn't return much more than that to share holders if they were willing to pay repatriation taxes. Also, they've been buying back stock and issuing dividends at a rate higher than domestic FCF, and the domestic FCF hasn't grown as fast as the foreign in the last couple of years, so this is likely to be an issue going forward. If you're valuing Apple on a gross liquidation value rather than as a going concern then you should be very heavily short. Further, If you want to do this liquidation exercise, when you net out off balance sheet liabilities (mostly future component purchase agreements) are you adding back the liquidation value of the assets that Apple will receive from those OBS liabilities? Link to comment Share on other sites More sharing options...
giofranchi Posted October 9, 2015 Share Posted October 9, 2015 I think it is quite amazing that Apple's Mac keeps growing (or at least staying flat), while the whole PC industry suffers! http://seekingalpha.com/article/3562226-apple-mac-increases-market-share-amidst-pc-downdraft?app=1&auth_param=7i5hb:1b1fkum:90cefe46ef18c2f6b8a8aa7a339c2ccf&uprof=25 Of course, if you think the article is just spam... don't read it! ;) Cheers, Gio Link to comment Share on other sites More sharing options...
rkbabang Posted October 9, 2015 Share Posted October 9, 2015 Elon Musk about Apple's automobile ambitions This is actually something I do worry about with Apple. Musk's condescending tone aside, he does have a valid point when he says: "cars are very complex compared to phones or smartwatches. You can’t just go to a supplier like Foxconn and say: Build me a car" I'm a little leary about the prospect of outsourcing the manufacture of something like an entire automobile and Apple hasn't proven, to me anyway, that they can easily become a car manufacturer. What Tesla has done in very little time was nothing other than extraordinary, I'm not sure you can count on even Apple having an easy time replicating their success, let alone exceeding it. Apple certainly has the money to give it a go, but its success is by no means guaranteed and this could be an expensive failure. Link to comment Share on other sites More sharing options...
TheAiGuy Posted October 9, 2015 Share Posted October 9, 2015 Elon Musk about Apple's automobile ambitions This is actually something I do worry about with Apple. Musk's condescending tone aside, he does have a valid point when he says: "cars are very complex compared to phones or smartwatches. You can’t just go to a supplier like Foxconn and say: Build me a car" I'm a little leary about the prospect of outsourcing the manufacture of something like an entire automobile and Apple hasn't proven, to me anyway, that they can easily become a car manufacturer. What Tesla has done in very little time was nothing other than extraordinary, I'm not sure you can count on even Apple having an easy time replicating their success, let alone exceeding it. Apple certainly has the money to give it a go, but its success is by no means guaranteed and this could be an expensive failure. So, phones are incredibly complex -- Apple looks like a competitor and he just made that up. I'm skeptical that Apple will have a huge edge in the car market as well, but Musk has a pretty strong incentive to believe that Apple won't succeed. The outsourcing of manufacturing is definitely something I've wondered about as well. Maybe Apple just buys up manufacturing plant, like Tesla did, and assemble it themselves? It seem like the only scalable solution, and the ROIC there would be much lower than we're used to seeing from Apple. BTW, it took 3 years for Tesla to go from prototype to production vehicle. Apple is rumored to be targeting a 2019 ship date, which seems comparable (source: http://www.wsj.com/articles/apple-speeds-up-electric-car-work-1442857105). Link to comment Share on other sites More sharing options...
Jurgis Posted October 9, 2015 Share Posted October 9, 2015 Right, the issue is not complexity per ce, it's the lack of outsourcing infrastructure for car manufacturing vs. phone/watch manufacturing. Link to comment Share on other sites More sharing options...
Picasso Posted October 9, 2015 Share Posted October 9, 2015 There also isn't enough worldwide supply of lithium ion batteries to give Apple any real scale. It's taking Tesla a few years to create the gigafactory which is doubling worldwide supply. Either Apple will need to start sourcing batteries from Tesla or they're going to have to build gigafactories themselves. Same goes for the supercharging infrastructure, unless they want to only sell cars that are limited in range. That takes years to build out. Link to comment Share on other sites More sharing options...
rkbabang Posted October 9, 2015 Share Posted October 9, 2015 Right, the issue is not complexity per ce, it's the lack of outsourcing infrastructure for car manufacturing vs. phone/watch manufacturing. I disagree there is an order of magnitude more complexity in an electric car than there is in a smartphone. The design of the touch screen dashboard alone is probably similar to smartphone-complexity. That leave the motors, motor control systems, battery, battery charging/protection systems, breaking systems, drive by wire systems, any autonomous features or driver assist features, and on and on... Link to comment Share on other sites More sharing options...
Jurgis Posted October 9, 2015 Share Posted October 9, 2015 Right, the issue is not complexity per ce, it's the lack of outsourcing infrastructure for car manufacturing vs. phone/watch manufacturing. I disagree there is an order of magnitude more complexity in an electric car than there is in a smartphone. The design of the touch screen dashboard alone is probably similar to smartphone-complexity. That leave the motors, motor control systems, battery, battery charging/protection systems, breaking systems, drive by wire systems, any autonomous features or driver assist features, and on and on... Most of what you listed are not complex at all if you go with the current state of the art. If you want to innovate on them and surpass the best existing systems 20-50%, then they are complex or possibly even not achievable, but in general they are not. And they are actually provided by the car part manufacturers. No car manufacturer (apart from Tesla) makes their own batteries or brakes (I'm not sure even Tesla makes their own brakes). So that part of outsourcing is easy - if you don't want to innovate. Apart from autonomous driving, everything you mentioned can be outsourced. I'll give you that a car probably has 10 smartphones in it. But that's not really qualitative complexity. In fact on the opposite side of the argument, Chinese make cars just fine. So it's not a rocket science. ;) Link to comment Share on other sites More sharing options...
rkbabang Posted October 9, 2015 Share Posted October 9, 2015 Right, the issue is not complexity per ce, it's the lack of outsourcing infrastructure for car manufacturing vs. phone/watch manufacturing. I disagree there is an order of magnitude more complexity in an electric car than there is in a smartphone. The design of the touch screen dashboard alone is probably similar to smartphone-complexity. That leave the motors, motor control systems, battery, battery charging/protection systems, breaking systems, drive by wire systems, any autonomous features or driver assist features, and on and on... Most of what you listed are not complex at all if you go with the current state of the art. If you want to innovate on them and surpass the best existing systems 20-50%, then they are complex or possibly even not achievable, but in general they are not. And they are actually provided by the car part manufacturers. No car manufacturer (apart from Tesla) makes their own batteries or brakes (I'm not sure even Tesla makes their own brakes). So that part of outsourcing is easy - if you don't want to innovate. Apart from autonomous driving, everything you mentioned can be outsourced. I'll give you that a car probably has 10 smartphones in it. But that's not really qualitative complexity. In fact on the opposite side of the argument, Chinese make cars just fine. So it's not a rocket science. ;) Well Chinese make rockets as well. You make a lot of good points. It seems like battery system innovation would be a must for competing with Tesla, and of course software is what Apple is good at, but yeah, almost everything else could be off the shelf. Link to comment Share on other sites More sharing options...
merkhet Posted October 9, 2015 Share Posted October 9, 2015 Anecdotally, I've heard that one of the things that makes a big difference between the BYD e6 and the Tesla Model S is the electric drivetrain. I would assume that there is some amount of complexity there otherwise the BYD engineers would have gotten it by now. That could be one of the things that might be hard for Apple's engineers to duplicate. Link to comment Share on other sites More sharing options...
rkbabang Posted October 9, 2015 Share Posted October 9, 2015 Anecdotally, I've heard that one of the things that makes a big difference between the BYD e6 and the Tesla Model S is the electric drivetrain. I would assume that there is some amount of complexity there otherwise the BYD engineers would have gotten it by now. That could be one of the things that might be hard for Apple's engineers to duplicate. Superficially what Jurgis is saying sounds like it should be the case, but my gut is telling me that designing, marketing, and manufacturing a mass produced electric car that people will actually want to buy and use is not an easy task. Tesla is doing it, but the fact that none of the other automakers seem to be able to accomplish it, even though some of them have been in the business of designing and manufacturing cars for over 100 years, tells me that my gut is correct. Link to comment Share on other sites More sharing options...
Liberty Posted October 9, 2015 Share Posted October 9, 2015 Superficially what Jurgis is saying sounds like it should be the case, but my gut is telling me that designing, marketing, and manufacturing a mass produced electric car that people will actually want to buy and use is not an easy task. Tesla is doing it, but the fact that none of the other automakers seem to be able to accomplish it, even though some of them have been in the business of designing and manufacturing cars for over 100 years, tells me that my gut is correct. It is definitely hard, but the main problem for the incumbents is that they have HUGE sunk costs in the old technology and that to properly sell EVs, you need to say how much better they are than gasoline cars. That's why they hold back and do it half-heartely. Tesla is an EV pure-play, as would be Apple when it comes to cars, so that has its advantages. Link to comment Share on other sites More sharing options...
Liberty Posted October 10, 2015 Share Posted October 10, 2015 Musk tweeting about what he said in Germany: Link to comment Share on other sites More sharing options...
johnny Posted October 10, 2015 Share Posted October 10, 2015 I agree with the earlier sentiment: Tesla is the "only" company able to do it, not because it is necessarily the hardest thing in the world, but because the existing companies are century-old behemoths, beholden to many different political interests (autoworkers unions, franchised dealers, all levels of government) that make it difficult for them to embrace disruptive technology. I say that noting that EV may not be quite as "disruptive" as we think when we use that phrase. But at least, in this stage, its disruptive in a more general (and important sense): it is profoundly unprofitable. It's very easy for Tesla, with venture-style funding and no expectations of short-term profitability, to make and sell a great car, at a high price, at a loss. It would be significantly more difficult to do this under GM. Because for GM, the money-losing sale of a $100,000 GM vehicle would in all likelihood be coming at the cost of an otherwise massively profitable $100,000 ICE car. This is that typical profit-oriented logic that makes it hard for incumbents to respond nimbly to changes in technology and markets. The legacy auto companies may or may not be able to overcome the inertia that their histories have imposed on them. But new entrants come in with the same unparalleled operational flexibility that Tesla enjoyed. And Apple is in all likelihood timing their entry such that they will come in when the products can be sold at positive margins (or at least close to it). Remember, one of the biggest pitches for EV over ICE is that EV is just so much more fundamentally simple, from a mechanical standpoint. Barely any moving parts, yada yada. If Apple is serious about the market, I don't think they will find it difficult to make a positive impact. Whether they can become a massive operation that substantially moves the needle on the market-cap is a totally different question. But luckily, we're still in ex-cash single-digit PE territory, so we're not really betting the farm on iPhone-like ubiquity of AppleCar. Link to comment Share on other sites More sharing options...
portfolio14 Posted October 10, 2015 Share Posted October 10, 2015 Disrupt yourself, Toyota edition: http://dailykanban.com/2015/03/toyotas-tnga-tps-2-0/ Link to comment Share on other sites More sharing options...
Jurgis Posted October 10, 2015 Share Posted October 10, 2015 Superficially what Jurgis is saying sounds like it should be the case, but my gut is telling me that designing, marketing, and manufacturing a mass produced electric car that people will actually want to buy and use is not an easy task. I never said that "manufacturing a mass produced electric car that people will actually want to buy and use is an easy task". :) We only talked about complexity. Getting all the right parts, innovating the parts you want to innovate and then assembling everything is still very tough. Tougher still since assembling is not available as outsourced service right now. Link to comment Share on other sites More sharing options...
innerscorecard Posted October 10, 2015 Share Posted October 10, 2015 I just got a used Apple Watch Sport from eBay. I love it! It's totally compelling to me. That's actually not what I thought before I started wearing it, which is the real problem here. Link to comment Share on other sites More sharing options...
TheAiGuy Posted October 11, 2015 Share Posted October 11, 2015 http://stevecheney.com/on-apples-incredible-platform-advantage/ Link to comment Share on other sites More sharing options...
DCG Posted October 11, 2015 Share Posted October 11, 2015 I just got a used Apple Watch Sport from eBay. I love it! It's totally compelling to me. That's actually not what I thought before I started wearing it, which is the real problem here. What have you mainly been using it for? Link to comment Share on other sites More sharing options...
innerscorecard Posted October 12, 2015 Share Posted October 12, 2015 I just got a used Apple Watch Sport from eBay. I love it! It's totally compelling to me. That's actually not what I thought before I started wearing it, which is the real problem here. What have you mainly been using it for? Mostly fitness. It's extremely motivating. Link to comment Share on other sites More sharing options...
giofranchi Posted October 12, 2015 Share Posted October 12, 2015 Upsetting the Apple car http://www.economist.com/news/business/21644149-established-carmakers-not-tech-firms-will-win-race-build-vehicles?fsrc=scn/tw/te/pe/ed/cars_and_technology Cheers, Gio Link to comment Share on other sites More sharing options...
DCG Posted October 12, 2015 Share Posted October 12, 2015 I just got a used Apple Watch Sport from eBay. I love it! It's totally compelling to me. That's actually not what I thought before I started wearing it, which is the real problem here. What have you mainly been using it for? Mostly fitness. It's extremely motivating. What makes it better for fitness than a FitBit? Link to comment Share on other sites More sharing options...
mbharadwaj Posted October 12, 2015 Share Posted October 12, 2015 My perspective on comparing with FitBit. I don't have an Apple Watch and am in the market for one - waiting for Thanksgiving for any deals. As a comparison to FitBit, which I own, i usually end up forgetting to wear it. The one I had goes as a clip on and once I forgot to take it off and washed the trouser. I was able to unscrew the back, dry things out to get it to work, but it was a hassle. A watch as a fitness tracker, along with the other features related to text and email notifications seems more of a usable device for me compared to FitBit. Then again, I have not worn a watch since I bought my first cell phone. So I am not sure as to how I will feel about wearing one continuously. Link to comment Share on other sites More sharing options...
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