Writing this story, I got a good sense of the difference between silicon valley culture and auto industry culture (at a time when carmakers perceive the threat from tech companies and are trying, sort of, to be more nimble and tech-ish). Bill Ford is a great entry point because his heart is in the environment and innovation--but his soul runs on fossil fuel motors zipping down the highway. And now Ford (the company) is trying to get into services--and to take on Uber.
As an auto enthusiast for a couple decades plus, I can really appreciate the approach and attitude Bill Ford seems to be reaching to achieve. The inventor and innovator side of me enjoys the often blase notion of "disruption" that comes with SV culture, but I've still got distinct reservations about the general "practical ethics compass" of the approach, to coin a phrase for lack of a better one that I know. Where SV and Auto culture meet in the middle definitely interests me.
I guess what I find more appealing about Auto industry culture is the general notion of accountability (give or take) with respect to products. Auto companies are not nimble, should not play 'fast and loose' with regulations like safety, and they have public shareholders as well. This is a different model - one that I honestly believe serves the Auto industry well - because there are perfectly reasonable avenues to take SV-like approaches - it's called R&D, and taking stuff out racing. WRC. BTCC. Le Mans. All sorts of different avenues!
This isn't to give Auto companies like Ford a free pass when they make mistakes (Firestone and Ford comes to mind) but rather acknowledge that there's still merit in their approach to creating, manufacturing, and supporting products.
Well said. I too would like to see Brick and Mortar models survive and thrive. SV speed and scale of disruption these days, is too quick for anyone's good. If we want more whales in the ocean we need larger oceans. We are getting very good at producing whales fast. We need to get better at producing more ocean.
He is sort of compelled here, the current generation or driver age people in the US have the much less desire to drive[1]. But like everyone they still need to get from A to B, and figuring out how they want to do that, and supplying that market is really the only choice auto makers have.
Does anyone know what percentage of urban dwellers remain in the city for their lifetime? I would imagine this number tracks inversely to the decreasing birth rate YoY decline (among this same demographic group) in the US. Specifically, I'm interested in the birthrates for the 50-75th income percentile for living in major cities (not metropolitan areas).
A couple cursory Google searches hasn't yielded any hard data, but hopefully someone has come across data on this.
tldr; I don't disagree with your assumption for decreased ownership for personal transportation, but I don't see this changing for families that live outside the Urban core until decades from now.
I don't have an answer to your specific question but I do know ⅔ of all miles are driven in an urban environment in the USA. Urban is where the money is.
I believe that's only true if you include suburban miles under "urban", i.e., everything but rural. So that statistic really doesn't speak to karpodiem's comment about city dwellers:
> I'm interested in the birthrates for the 50-75th income percentile for living in major cities (not metropolitan areas).
Yes suburban is included however I strongly believe that the average suburban dweller will be more than catered for with self-driving taxis once we hit saturation point. During the service growth years it will probably be inconvenient but as soon as we reach maturity owning a car will be the inconvenience.
Sure, but I'd agree with karpodiem that this is likely decades from now, i.e., more than 20 years before half of suburban households drop their car for a autonomous taxi service. Computers took over a decade to really penetrate. 10% of people owned a computer 20 years ago, but no uses a self-driving car today. Further, the financial and regulator roadblocks are much larger for cars than computers.
It will take a while but perhaps now that everyone has a smartphone and is used to technology/ understands it's benefits, adoption rates will speed up.
My opinion:
“I don’t want to sound arrogant,”
This is critical, remember Ballmer dismissing the iPhone? and Blackberry... and telcos...
"Apple doesn’t know how to handle a supply chain, or market its wares" that could also mean they can disrupt and disruption points are associated with market changes (check vapor engine vs fuel or iPhone vs every other phone).
“We are going to build smart cars, but we also need to build smart roads, smart parking, smart public transportation systems, and more,” and this is the critical point, I'm old in tech years... and I like my clockwork internal combustion engines, I like to be able to drive them but the future people may not, getting what that future mass wants is the million dollar goal.
For example... people may not want a car but to get somewhere and for example in NY that sound more rational than in TX, can we build a company around providing "Car as a service" (you hear it first here from xlayn :p)
"the Ford executives believe that the firm’s in-house tech expertise is under-appreciated" or it can also mean they could leverage someone else expertise... (this is a question, I don't really know the answer).
Last but not least... he want's to get the company into something while keeping the strong advantage they have in what they are strong and not becoming a hipster startup (as in lets make a trillion dollar company around 140 characters but there is no revenue model)...
> "the Ford executives believe that the firm’s in-house tech expertise is under-appreciated"
5 minutes trying to use a Ford's music system makes it pretty clear that, at least for tech UI, they are awful. That they aren't publicly sheepish about it suggests that the guys in charge don't even notice the differences.
... but isn't Sync a Microsoft product built into Ford cars? It certainly was when I worked there in the mid-2000s.
EDIT: Gen 1 and 2 are while the upcoming Gen 3 is built by Blackberry.
"Ford cited issues with Microsoft's complex software dragging down its scores with Consumer Reports and other consumer magazines being a reason it switched to BlackBerry."
I tried out Sync myself, and I strongly agree with jessriedel. What's more, I don't think the bad design can be blamed on MS; much of Ford's side of it was a failure too. From my review at the time [1]
- They don't make it easy to get someone to show you the system. (pts 1 and 2)
- They make it so that if you just leave your iPod (a lot of people didn't have the phone at the time) plugged in, it has to be prominently visible to thieves (pt 4)
- Despite them expecting you to use Sync for anything and everything, it's on an inner row of the steering wheel, requiring a really long thumb stretch to reach. (pt 6)
- Hitting the phone button when you don't have a phone set up with it, will disable the audio system (and thus, further Sync action) until next time you turn the car on. (pt 8)
I know -- the point was to criticize how many serious blunders they committed in their initial attempt and which couldn't be blamed on Microsoft, to substantiate the point about poor UX expertise. Certainly, they eventually got it right 8 years later, but the point stands that they don't have some stellar in-house team.
This times 100. I have a 2011 Ford truck and hate the Sync system. It is absolute garbage, from blutooth syncing, usb syncing, to having a finicky mostly unusable interface. Add in that it was upgradeable for a while by myself, but then for some reason I had to take it in for $150 at the shop to get further upgrades.
I've been burned so bad, I'll only look at vehicles that support Carplay in the future.
They upgraded to a new major version of Sync either this year or last, and it's MUCH better (I recently rented a 2015 Expedition XLT). It's still MUCH WORSE than even Chevy's system, though, so ymmv.
If you can't design a music system UI, what about something mission critical like the critical interface between human driving, and self-driving automation?
>That they aren't publicly sheepish about it suggests that the guys in charge don't even notice the differences.
My impression is that part of the 'being in charge' job is not acting sheepish, no matter how bad your product is, unless you have a solution that is dramatically different at hand.
Replacing radios has become far less common. Also, wheels and hubcaps are 'core' features that people often replace.
PS: Car people sometimes do end up replacing the drive train. One guy I heard about replaced everything until his gear shaft was the weak point and it ended up breaking.
Apple looks obvious in hindsight, but at the time that was the reputation Apple had established for itself. Supply chain problems. Marketing problems. Money problems.
eg. Blackberry is getting into the car automation business too. Right now that's a "lol, ok" response from most people, but if you look at the tech they own and are working on (QNX) it makes sense as a possible direction forward for the company. Will it pay off? I suppose in 10 years time we will look back and it will be obvious whether the investment was worth it or not.
I took the original Ford quotes regarding Apple/Tesla a bit differently.
People keep these things for up to 30 years. I haven't had a car I kept for less than 10 years, and the average is over 10. There is a huge support network that goes into enabling this. At this stage in the game, are you willing to buy an Apple or Tesla product that you plan to keep for more than 10 years? Are you willing to bet that those Tesla supercharge stations will still exist in 10, 20, or 30 years?
Thanks for pulling such a great excerpt. SV culture is about innovation, find solutions <i>in spite of</i> constraints. If the infrastructure is lacking, a combination of hardware & software can work around it to still accomplish the goals. It's funny but the auto industry, specifically Ford with the Model T, created the demand for cars arguably spurring the development of the network of roads required to take full advantage.
What makes this time exciting is that there is an intersection of some amazing technologies, business models, and objectives for transportation: on-demand, renewables & energy, self-driving/autonomous, environment, etc. The best part is that multiple companies, new and old, are involved and want a piece of the increasingly bigger pie.
A company like Ford with a massive dealer network, good relationships with fleet buyers and other things that a new entrant doesn't have.
If I want to buy a Tesla, I need to drive 150 miles and hope the thing never breaks. I have 4-5 Ford dealers within 20 minutes.
Those dealers are sales channels, service channels and capable of doing more stuff. With the right strategy, those legacy disadvantages can be advantages. If Apple is able to build the capability to build a car in a couple of years, it's ridiculous to think that a company in the car business for a century cannot do it.
lol, a company that has to meet the demand of people lining up out the door across the world everytime they release a new product, doesn't know how to manage a supply chain...
> “So many of those features are going into the vehicles today — self-parking, lane keeping, all these things that ultimately are going to be very much a part of full autonomy. And customers are already getting used to it.”
This reminds me a lot of how advanced and amazing the avionics and support systems are on Airbus planes, and why shit pilots crash them whenever anything doesn't go exactly like a simulator textbook. It's a part of the future of automotive "advancement" that I'm not optimistic about. This is certainly a personal opinion, one coming from a guy who likes to really be involved while driving and has his fair share of mistakes on his record, but I think it's worthwhile to keep in mind.
> and why shit pilots crash them whenever anything doesn't go exactly like a simulator textbook.
Often it according to a simulator textbook but pilots haven't studied the text book enough so they end up being confused what mode the autopilot is on, override and crash the plane.
I think FAA even calls that as such -- "mode confusion".
Of course it could be the problem of user interface or warning and error reporting is not clear and explicit (alarm is blaring so they ... just ignore it because it has so many false positives).
Upon further reflection, I think some shit pilots still manage to crash the plane even when something IS a textbook simulator issue.
That shorting of the runway in San Fran? Every warning worked as intended except the pilot. The prop plane that went down in Taiwan? Pilot shut down the wrong engine.
Basically if we're talking about a person being unable to actually handle the needs of modern piloting - mode confusion as it were - then I'm suspicious that they aren't very good pilots in the first place. This is where I see the correlative in cars.
Just because lane-alert and auto cruise control can help an inattentive driver stay out of a crash doesn't mean the systems can't be compromised by a poor operator. That's kind of my thought process.
There's a really good podcast over at 99% invisible called Children of the Magenta that deals with this. IIRC, he (Roman Mars) also did a follow-on show about what it means for driverless cars.
I'd like a citation of a study or some numbers that back up your claim, really I would. I'm strictly speaking about commercial aviation - not puttering around in a Cirrus with a parachute. Those aren't equitable comparisons.
Mostly because in recent times, pilot error has been the most frequent cause of crashes, to my knowledge, in Airbus planes. Whether that's being too stupid to avoid an active combat zone and get shot down, or turning off the wrong engine and causing a prop plane to crash in a recoverable situation (granted not an Airbus).
Basically, there are pilots flying in commercial aviation today that, practically speaking, are not qualified to be stick & yoke pilots but are commercial pilots because demand far outstrips supply in some parts of the world.
Tired pilots are very dangerous. So, the actual numbers on this might be counter intuitive. We may very well be at a point where flights would be safer without on board pilots.
Are you seriously suggesting Airbus aircraft are more dangerous than Boeing due to automation? The (public) accident data show that they have comparable safety records across the board. Carriers aren't clamoring to Airbus for less automation. Flyers aren't gripped by fear when they see "A320" on their boarding passes. The manufacturers employ different philosophies on flight control, but it's not a clear shot that a human is always better. With cars, the general data suggest that automation leads to massive reduction in accidents. In every field there's some nostalgia and romanticizing over how when SHTF, only those with manual experience will be able to achieve anything. Then you have cases like the death of pilot of Michael Alsbury, which would have been prevented by very simple automated flight control checks. http://www.latimes.com/business/la-fi-ntsb-virgin-20150727-s...
No, I'm seriously suggesting that some airlines prefer to purchase Airbus products because their advanced avionics and automation systems bridge a competency gap in order to maintain operations and growth at the expense of safety.
Are you seriously suggesting a traveler of reasonable means will look at their ticket that says AirAsia on it and think they have made the best possible deicison?
One thing that's really uplifting is to see the giant tidal wave of uptake in electric drive platforms.
I really don't think you'd see this without Tesla really setting the bar with the Model S. Now we're seeing GM, Ford, BMW, VW and many other auto companies making serious commitments.
I want to see a company release a cheap framework for an electric car that anyone can build on top of. Just the chassis and battery pack maybe with in-wheel motors. Then people could design and print their own cabs.
I saw the documentary by BMW on making the i8 and while their technical knowledge/competency is impressive at this stage it seems they are way over-engineering when a simple solution would suffice.
The body holds the car together in most lighter cars. This is called "monocoque construction". You can't just add the body. Body-on-frame construction is used for trucks and some larger cars, but there's a weight penalty.
The trouble with in-wheel motors: unsprung weight. Works great for big, slow vehicles like mining trucks. For smaller vehicles, the motor weight has to come way down. There's been some progress in this.
I think you mean "unibody": https://en.wikipedia.org/wiki/Vehicle_frame#Unibody Also, with the discontinuation of the Ford Panther platform (Crown Vic/Grand Marquis/Towncar) there are no longer any passenger cars manufactured using Body-on-frame, only SUVs and trucks.
I think there's a huge market for exactly what you described.
Would I buy a electric car now--no. Do I feel they are over
engineered, like too many new internal combustion vechicles--yes.
That said, when electric cars start showing up in the secondary markets, I'll probally buy one. I'll buy it to modify, and turn it into something I can drive on the cheap.
That's if I can get into their proprietary computers, or bypass all together, and government doesn't get too involved with regulations? By regulations, I mean right now in most states, the government is pretty lenient with collector cars. In CA, you can do a lot to a vechicle made before 1973. Guys of all income groups are into their older cars. I hope it stays this way. As to smog, global warming--I just don't think a lot of these older cars are on the road enough to make a huge difference. A modified electric car is something I would buy, or get excited about. I'm kinda looking for a used Prius that needs a new engine right now. I got excited about a used Prius when I heard the motors are so well engineered--they are outlasting the vechicles. Guys aren't rebuilding these engines. They are buying them whole from the junk yard for low prices.
The auto industry has an Apple product model (keep design in house and release very well-finished products) as opposed to a PC model (build a platform for both hardware and software that others can design, build, mix, and match for). Sure there are Delphis and other suppliers, but they build nuts and bolts while the drive train, chassis, and body have remained the domain of the auto companies. Correct me if I'm wrong.
I'm very interested in the production of standard drivetrains and chassis, analogous to processors and motherboards, that hobbyists and customizers can build upon.
I'm thinking more of an enabler for Michael Dell type entrepreneurs. With the democratization of design/manufacturing tools, a framework as I have described, will allow smaller players/designers express their vision. While I agree that the auto industry is very closed, I feel that the playing with the interior of a car allows for more creativity than the interior of a pc or phone, especially when there is no need to design for a driver.
There was something similar to this when cars first came out. You'd buy the engine and the frame and hire a coach building company to build the body and the interior.
There are thousands of small parts in a car cab, made of a variety of materials (assorted alloys, glass, various plastics, composites, fabrics, rubber, electronic components...), and an unfeasibly large amount of wiring, some of which has to be thick enough to carry large currents.
Even if you strip everything down to bare essentials, you still need hundreds of parts in various materials. (Toyota, Peugeot and Citroen already do engine/chassis sharing on a couple of budget car lines.)
Current technology can't print a safe car windscreen, never mind a complete cab with safe crumple zones.
Car building is primarily a logistics, supply chain, and assembly problem, not a design problem. I don't think a self-printed car solution will happen this side of 2030 - if ever - and it will probably need nano-assembly to be viable.
You are kind of conflicting yourself in your argument against modularization, by noting that different manufacturers already share major sub-assembly. The electric systems have been going towards bus-like approach with microcontrollers. Which should again provide easy enough sub-assembly to be installed afterwards. This is demonstrated by the fact that they are sometimes outsourced.
But about 3D printing I agree. You can print paneling to your taste, but that's about it.
But then again all custom production is getting more and more accessible to end customer. You can order custom water jet cut sheet metal at your door these days.
Maybe something like this could happen: Order chassis and engine from BMW. Print side panels with CAD files you ordered from some Korean designer. Order hood from Jaguar and interior from Versace. Final assembly is done by "chop shop" who prints and orders all the necessary parts to connect the stuff you ordered.
And you end up with a vehicle with extremely dubious crash safety, no warranty worth speaking of, insurance companies won't touch it, and the resale value will be abysmal. Have at it!
My bike has parts from several different companies. It has separate warranty for every part, insurance company doesn't mind anything and resale value doesn't differ from package deal. What's so different?
In the example all assemblies affecting crash safety would come from respectable auto manufacturers, so I don't see the problem.
Crash safety in a modern car intimately involves all parts of the vehicle's infrastructure. I doubt it would be possible to componentize without severe compromise.
I'm really puzzled by this. I remember about 10 years ago GM (I think) was making a big deal about their electric platform that was going to be the base of a whole slew of electric vehicles. It sounded like a good concept at the time. But now? Crickets...
Palm CEO Ed Colligan’s remarks regarding Apple’s prospects in the mobile phone market:
>Responding to questions from New York Times correspondent John Markoff at a Churchill Club breakfast gathering Thursday morning, Colligan laughed off the idea that any company — including the wildly popular Apple Computer — could easily win customers in the finicky smart-phone sector.
>“We’ve learned and struggled for a few years here figuring out how to make a decent phone,” he said. “PC guys are not going to just figure this out. They’re not going to just walk in.”
> Anyone who spends a few minutes in a Tesla gets that it’s different from other cars — more a delightful digital device than a cabin pulled by belching engine — and even those who aren’t “car people” experience object-lust.
I think this highlights some disconnects between Silicon Valley and Detroit.
* Detroit hasn't made "belching" engines since the 1980's.
* Average car age is 11.5 years. [1] It's pretty clear that people are OK with the user experience in their vehicles.
* "Selling Cars" is not a market prone to disruption. The cost structure is hideous. Enormous capital is required for at least 5 years before you sell anything, and after that your sales trickle in slowly.
* "Mobility Services" may be an amazing new market; we'll see. 11.5 years means there are a lot of old cars on the road that people may want to replace, but it also means that people are OK with those cars, and that there are a lot of people who have a minimal amount of money to spend on a new car.
* Upmarket vehicles absolutely have to differentiate themselves in a number of areas, and while UX is increasing in importance, it is a middling 5th place after Safety, Quality, Reliability, and Performance.
* UX is difficult in automobiles. If you get UX wrong in an app, you can update, or your app can die and people will forget about it. If you get UX wrong in a car, people will hate you for it, but still buy your cars. [2] You can't download buttons and knobs [3] if people can't get used to your touchscreen. [edited]
* UX in autos can't be flashy or distracting, should get out of the way, be usable with 5% of the user's attention, but it must provide enough information and feedback to be used reliably and quickly.
WRT app updates Tesla has an advantage over everyone in that they do App OTAs on a regular cadence(just got 7.1 last night).
Fun fallout from dealership agreements is that it looks like GM and others can't legally do OTAs for their vehicles(dealer owns all software updates/upgrades) which gives Tesla a distinct advantage:
I did not know that. It is a big challenge to get the best value out of the traditional partners in the automotive space: Labor (UAW), Dealers, and Suppliers.
And by challenge, I mean it is a big mess.
Also, call me a fuddy duddy, but OTA updates for automobiles SCARE me. They should scare Tesla as well, and I hope they do. They've done well for now; in 5 years will they still have the same discipline? That being said - the OTA mechanism has a HUGE value proposition and they absolutely deserve the kudos they got for it.
Yeah, if you don't have diligence and discipline you shouldn't be doing OTA updates regardless of what industry you're in.
FWIW they've got a pretty awesome bug reporting mechanism via the voice command "report <X>" which sends a snapshot of the car along with the description.
They also have the ability to pull more detailed logs remotely(with your permission). Had a few spurious messages come up, called service and they were able to pull logs, verify that it was fixed in an upcoming OTA and not an issue. Much better than having to drive to the dealer(which is ~2 hours roundtrip for me). It's very slick to be able to pull CAN bus + other diags remotely.
> UX is difficult in automobiles. If you get UX wrong in an app, you can update, or your app can die and people will forget about it. If you get UX wrong in a car, people will hate you for it, but still buy your cars.
Doesn't Tesla show that updating over-the-air is feasible?
I'm skeptical of the ability of big, old companies to change their internal cultures enough to become nimble and responsive.
Old companies have calcified political structures and old managers that have enough political capital to detonate any change that threatens their fiefdoms.
Software/Services businesses are not slow and comfortable with huge moats that just appear. You can't afford to be slow and bureaucratic. You have to be constantly changing, reorganizing, and employees have to be comfortable living/working in a zone of continuous chaos ... where you aren't exactly sure what the next step is ... but you are experimenting to find out--and internal groups are always rising and falling ... and managers are always rising and falling.
Ford is the only American car brand that is considered a "normal car" in Europe. I exclude Opel/Vauxhall that are owned by GM but no seen as American brands.
That's largely because Ford Europe was largely autonomous, and also did things like introduce a lot of modular chassis innovations, as well as EU-specific designs like the Mondeo, original Fiesta, and Kuga, not to mention C-Max. They deserve a lot of respect for putting up a good fight against VW on their home turf.
Sounds like he's trying to change Ford from a product company to a services company. That's going to be really tough - all those mid-level managers have to be pointed in the new direction.
Depends on how long it takes. If the timeline is not too short then many of those mid-level managers may not be around long enough to factor in that much.
I had an uncle retire from Ford Motor Credit and a cousin still working there as an engineer on the F150. I have faith that company will transition well into the autonomous car and electric car future. They adopted MS Sync pretty early on compared to competitors.
On Bill Ford, I don't know the whole story on him, but I could see how he was a bad CEO and a decent advocate and visionary for these technologies. For a wealthy man who probably doesn't have to do anything, he sounds commendable to be trying so hard to contribute.
It's a bit of a shame in a way that the government bailed out GM and Chrysler because Ford deserved to gain more advantage out of that due to their good decision making.
I hope that moving ahead they reap more rewards than they have in the past for their forward looking moves.
I'm still preordering a Tesla Model 3 in March, but I'll definitely keep my eye on what Ford has to offer soon.
An electric truck would be an interesting proposition - good torque for towing, and a large footprint gives plenty of battery space, but currently I'd imagine the high cost of entry and the range problem stop it from being viable.
The new smaller engined forced induction Ford trucks seem to be getting good reviews, so perhaps the segment is more open to innovation than I would've guessed
Personally I'm hoping that electric trucks will eventually allow late 80s early 90s sized compact pickups (like less than 190 inches in length) to find a market again.
It wouldn't be that bad. The ad opens with a crane shot of an electric locomotive going through west Texas (or east california); cut to an electric awd truck winning tug of war against like two of it's competitors then James Earl Jones is like "The new Texas born Tesla Grand Coulee: It'll move a Fucking Mountain"
Despite all the noise Tesla makes about their "advanced manufacturing capabilities", their productivity is very low by auto company standards:
Tesla: 12,000 employees, about 50,000 cars/year, 0.24 man years per car.
Ford: 181,000 employees, 3,230,000 cars/year, 0.06 man years/car.
Tesla is heavily subsidized by government, sells an expensive car, makes very few models, and still loses about $4000 per car. Something is wrong there. Their head count is way too high.
ZEV credits haven't been a significant part of their income stream for quite a while.
Also they make ~20% profit per car but are reinvesting large amounts of capital for Model X/3 + Gigafactory.
Please don't go throwing around FUD like this without looking into things in a bit more detail. See their last quarterly report for the figures I referenced above.
Yes, but the same logic applies to Ford. Once you remove all the executives, marketing personnel, support personnel, R&D staff, and everyone not working in a factory, Ford's ratio gets even better.
Obligatory SW:ESB reference aside, I think that the danger Bill may not be cognizant of is just how advantageous vertical integration is for companies like Apple. Other companies disregard it at their peril.
The thing is, I'm a dyed-in-the-wool car guy. I love cars, and probably will never own an electric car. I prefer my snarling twin-turbo V8 german bruisers that have an extremely high rubber-to-tarmac transmission rate.
"Bill may not be cognizant of is just how advantageous vertical integration is for companies like Apple."
The CEO of Ford not being aware of the advantages of vertical integration? That's a joke. Until 1989, Ford made its own steel. They still operate foundries and rolling mills. The Ford River Rouge plant was once the most vertically integrated auto plant in the world - iron ore came in at one end and cars came out the other.
Apple doesn't make iPhones. Foxconn makes iPhones.
Once got to hear the tax director of Cisco give a talk about Silicon Valley "innovation." He was from Pittsburgh, and used to work for Detroit (not sure which company).
In a nutshell, his talk came down to this:
Every business innovation that Silicon Valley thinks it created, Detroit thought of first, decades ago, and implemented, decades ago, and moved on, decades ago.
Vertical integration used to be a big thing in the automobile world; at one point everything was done in house. Once they began standardizing assemblies and other parts, they began farming out parts to external suppliers because there was no reason for them to control every aspect of the manufacturing process; it was cheaper to let one or more external suppliers handle that.
“We are going to build smart cars, but we also need to build smart roads, smart parking, smart public transportation systems, and more”
This is what will slow down the widespread adoption of autonomous vehicles, be they in the form of a transportation service initially or not. The infrastructure just isn't there yet.
> Anyone who spends a few minutes in a Tesla gets that it’s different from other cars — more a delightful digital device than a cabin pulled by belching engine — and even those who aren’t “car people” experience object-lust.
Is there any car listing for $75,000 that doesn't inspire "object-lust"?
> "The point of the day was to emphasize Ford’s evolving strategy."
And the "point" of emphazing Ford's evolving stategy is to make it appear that Ford is moving and grooving with the times and won't be left behind and ultimately to have a positive impact on the stock price.
>example of Apple and Nokia. Only Apple successfully built a broad customer experience and robust ecosystem. “You can become extinct when you only focus on the hardware,” he said.
I'm pretty certain Nokia's problem was never focusing only on hardware. They focused on software all the time. The problem was that Symbian sucked and they didn't open up for alternatives until it was too late. Samsung actually does just hardware and they are doing fine.
Samsung's smartphone profits are tanking fast. Sure, Google saved them in the short term, but in the consumer electronic industry over the long term you really need to be a good software company or your margins are going to end up paper thin.
I think if there's one thing Ford should be afraid of from Apple it's not taking marketshare, it's taking profit share. Apple has carved out exactly that slice of the the smartphone market where you can make a profit, and left everyone else to fight over the no-margin remainder. Apple could conceivably do something similar in cars by building one or two models that compete directly with the most profitable cars (though it seems that all of Ford's profits actually come from big trucks--hard to imagine someone hauling a half-ton of manure in the back their rose gold Apple Pickup).
Because it is actually not easy? Keep in mind Apple has unprecedented resources so not easy is not really a problem for them, as Musk pointed out recently they've hired thousands of people to work on this. Also I think it has been done to some extent, Tesla's Model S is now (by some measures) the bestselling luxury car, and can probably be credited with accelerating BMW and Porsche moving towards all-electric vehicles.
But Samsung is still making profit. Samsung smartphone market share has been growing and Apple going down. No wonder you get fat profits for a while, if you overprice your products. But customers seem to be catching up.
Samsung's smartphone profits are ~1/2 what they where a few years ago and it's ~1/5th Apples even with a much larger and growing market share. Yes, there brand is growing slowly, but being GM and selling more product on paper thin margins is risky should the market change in any way or a slightly more efficient competitor shows up.
PS: IMO, Samsung is in the perfect place to work on the software side of things. Sure, it would be expensive, but it's one of the few ways to push actual growth. Otherwise, there going to pull a Dell, ride the growth wave and then shrink as growth stalls.
