The profitability of cars is low. And Apple is a mass-market consumer electronics company that maintains high margins. Seeking Alpha argues that Apple should use its AI expertise for home robots instead.
I’ve been making this argument for years. Now Seeking Alpha weighs in also with strong analysis.
Here’s the link.
The case for cars is described and documented as weak…
it is also not clear whether Apple wants to be successful with such a car at all. Because with that it is moving away from its other hardware business. In addition, Tesla shows how difficult it is to manufacture a car and at the same time be profitable. Accordingly, an Apple car could put a lot of pressure on the company’s overall margin. Over the last ten years, the operating margin and profit margin has always been above 26 and 20 percent respectively.
The argument continues. Apple was perhaps on track at one point.
Given that, I’m convinced that Apple should bury his car plans and build a robotics-based home device, the iRobot. A few years ago there were rumours about such plans. Apple had just hired Yoky Matsuoka back then, an expert especially in robotics. Nevertheless, a short time after, Yoky Matsuoka left Apple and works now as CTO of Google Nest.
The motivation? Revenue. Lots of it.
With the robot as hardware Apple would have a new lever to bind customers to itself and the service business. Personal robots are increasingly used for entertainment, as well as education, cleaning and household applications. Global Household Robots Market was valued USD 24.8 billion in 2018 and is expected to reach 154.95 billion by 2026…
The case is well argued by Seeking Alpha.
More News Debris
• It’s almost certain there’s an 8K TV on your future. But the current trend is to pooh-pooh them as unnecessary. This review has the capacity to change your mind. Technology moves relentlessly forward, and so being well briefed is essential. Plus, it’s a lot of fun. Take a leap into the (near) future with me. “Samsung’s 8K Q900 65 Inch QLED HDR TV Just Got $1500 Knocked Off Its Price.”
• Quite some time ago, we learned that Apple was working on a Touch ID system embedded in the display as opposed to a sensor-in-button. The ideas was to get rid of the screen-stealing bar containing the button. But, apparently, the technology wasn’t ready, so Apple went with Face ID. Now, we have rumors that the in-display Touch ID may be resurfacing (!), but not as a replacement for Face ID but as a supplement. See: “Apple again reported to be planning in-display Touch ID for 2020 iPhones.”
Analyst Ming-Chi Kuo has also claimed that this version of Touch ID will be coming to the iPhone. In August [he] was saying he expected it to be in either the 2020 or 2021 models.
• Previously, we reported that Apple Pay vice president Jennifer Bailey spoke with CNN, but Jonny Evans at Apple Must has a much deeper take on her comments: “16 things an Apple VP just told us about Apple’s plans to replace your wallet.” For example, Jonny opines and then quotes…
I’ve been saying for some time that Apple will inevitably offer up government level identity, It’s happening, but it’s slow, confirmed the Apple VP.
“The hardest thing is identity. And the reason is that identity, to be legal, right? It has to be government issued and has to be authenticated by the government. And while there’s interesting progress happening in this space, it’s not the fastest area of innovation relative to some others.
This next item is cute, tragi-comical, and a scary reminder of changing social mores induced by technology. A sobering read. “How Apple’s HomePod turned my friends into rude troglodytes.” Only Chris Matyszczyk could have written this gem.
• The iPhone’s Settings are voluminous and deeply nested. Sometimes we need a guided tour to walks us through the tuning of our privacy in iOS. Here’s a good one at Lifewire \. “How to Limit Ad Tracking on iPhone and iPad.”
• USB 4 is coming, and it’s going to help a lot with hubs and speed. Here’s an overview from Cult of Mac: “USB4 enables hubs with multiple USB-C ports.”
• Awhile back, we heard about Apple working on an iPhone (not Apple Watch) Walkie-Talkie feature. Style fills us in on the technology and why it was shelved (for now). “Why did Apple halt work on a new iPhone text feature that works without a mobile signal?”
• Finally, MIT Technology Review fills us in on industry efforts to detect Deep Fake videos using AI: “Facebook is making its own AI deepfakes to head off a disinformation disaster.”
The CTO of Faceook says videos forged using AI will be used maliciously on its platforms before long.
Facebook fears that AI-generated “deepfake” videos could be the next big source of viral misinformation—spreading among its users with potentially catastrophic consequences for the next US presidential election.
Its solution? Making lots of deepfakes of its own, to help researchers build and refine detection tools.
As always, let’s be careful out there.
Particle Debris is a generally a mix of John Martellaro’s observations and opinions about a standout event or article(s) of the week followed by a discussion of articles that didn’t make the TMO headlines, the technical news debris. The column is published most every Friday except for holiday weeks.
How you build your argument that Apple should not do automotive and switch to robotics is super flawed.
FIrst:
They could already be working on robotics and you might not know. In fact you would not know.
Second:
You are assuming they want to make automobiles instead of automotive technology. Can you back your assumption?
Third:
They could try both and still not put a dent in their cash reserves if one failed.
Fourth:
RE: “Apple had just hired Yoky Matsuoka back then, an expert especially in robotics. Nevertheless, a short time after, Yoky Matsuoka left Apple and works now as CTO of Google Nest.”
It was widely publicized that Yoky was on the Apple health team. Nowhere near robotics. So adding that as a major supportive point for your argument is super weak.
Can I get an amen!
https://www.vox.com/future-perfect/2019/9/9/20851753/ai-religion-robot-priest-mindar-buddhism-christianity
Regarding the Seeking Alpha article, while the author makes reference to “all car companies” in relating 2-3% margins, that is somewhat disingenuous, as Mercedes averages over 21%, Porsche 15%, BMW 11.8%, Apple Titan could just as well be in that category, altho one would hope the quality issues would be better. Quality is what kills Tesla, they seem a little indifferent to significant design flaws.
John:
The Seeking Alpha piece makes a well-reasoned, financial focused and data-supported argument for Apple to start producing robots as well as to abandon their plans for building a car. They make a strong case that has but one critical, indeed potentially fatal if not addressed, weakness. Unlike an automobile, a robot has no single raison d’être, no obvious principal use case to justify its existence. Arguing that Apple should build a robot, even a home robot, is tantamount to arguing that Apple should build a home electronic device. Fine. An electronic device to do what? Unlike an automobile, a radio or a clock, robot utility is not self explanatory; they can be designed to serve any number of purposes and do any number of tasks.
Currently, there is no consensus about what a home robot should be, do or even who should have one or why. This is because we have yet to address one fundamental question; what problem does a robot solve that cannot be solved by our current tools? This question is further bedevilled by the fact that, currently, most operating or near operational robots remain crude, kludgy, limited to a limited repertoire of repetitive tasks, and are largely limited to performing mechanical tasks.
For robots, there is yet one more wrinkle to their utility; many of the tasks that we once thought a home robot could perform are now being performed by AI. AI, without arms or legs, and relying only on wireless access to devices ‘smart’ enough to respond to it, can turn on/off lights, manipulate doors, regulate our thermostats, order groceries, feed our pets, entertain us, look up important information for us, watch over our homes, monitor our vital signs, and even call for help if we appear to be unresponsive. These were many of the tasks that, decades ago when we thought about them, we believed that robots might be able to perform; tireless mechanical servants at our beck and call. AI solves many elements of this problem with far greater efficiency and efficacy than could the Jetsons’ mechanical maid, being able to literally execute many of these simultaneously. So again, what problems in the home do robots solve that have not already been solved by AI or other tools?
One reason why we may not have a consensus use case is that we may be thinking about robots entirely the wrong way. Let’s categorise our tool use cases and see where might a home robot fit. All of our tools, mechanical, electronic and otherwise fall under three generic use cases:
To save human life (through mortality and injury prevention)
To extend the quality of human life (usually be augmenting our abilities, such as transportation and communication)
To unlock human potential by informing, inspiring and entertaining us in both work and play
Saving human life and preventing serious injury is already being done by robots in both the military (eg bomb diffusion) and industry (cars and heavy machining). This field will remain dominated by professional, industrial and military application for the foreseeable future, eventually seeing the rise of sophisticated exploratory and terraforming bots in space exploration. Tools that prevent mortality in the home include shelter and food/water infrastructure, that we already have. No major unmet demands here for robots to address in the home.
Extending the quality of life could include elder care, including physically demanding tasks, personal assistance for safety; child care including realtime visual monitoring through the bot by the parent, and assistance with both physical (eg blindness) and behavioural disabilities (eg for a child on the spectrum to practise and learn social pragmatics with an ever-patient robot who will never embarrass or pass judgement on the child). Eventually, the bots that will fill the bulk of this niche may be nanobots that reside within us and monitor and affect our health through direct intervention. All of this is downstream and will require careful attention to detail, especially for security if we are to entrust robots with our loved ones. Most of this technology is still in research and not consumer ready. Simpler services like vacuum cleaning are not compelling (although I might think seriously about a robot that could help unload the groceries – without breaking the eggs).
As for unlocking human potential, robots start with a disadvantage relative to AI, but even here as the technology advances, there are possibilities, particularly when combined with AI’s ability to service augmented reality. One application may be low-hanging fruit and is already underway in medicine; robots that enable users to interact directly with people remotely. Consider a family member far away who can access the family bot; speak, move around and interact with the family through the bot and even, using an emerging interface, electroencephalography (EEG), receive tactile feedback when they use the bot’s hands and legs. 5G tech, with its reduced latency, will be essential for such tech. Again, many of these supportive technologies are in their early experimental stage and nowhere near ready for commercialisation at affordable cost.
Because the home robot use case is not yet defined, there is opportunity for competing manufacturers, and therefore Apple, to address different needs, in which case their competition will be more oblique than direct. At the same time, should a popular use case emerge, competitors will likely all decide to address that need, but continue to address their original use case, and see which combinations have a competitive advantage.
More can be said, but to conclude, simply arguing from a financial perspective that Apple should start building home robots under-estimates the complexity and the challenge of coming up with both a compelling use case and the requisite, reliable and affordable technology to make it a valuable consumer proposition. One should hope that Apple’s consideration is a bit more sanguine.
I know several people that have those floor cleaning robots and they swear by them. But yes, other than that I can’t think of task for which a robot would be useful.
A few days ago I installed a HomeKit controllable electric outlet switch for the bedroom window fan. Now I can stay in bed at 3:00 am when it has cooled down and just say “Hey Siri, turn off fan”.
Lee, I completely agree that vacuum cleaner bots (hoover bots) are useful. I’ve even toyed with the idea of getting one, but the thought that I might need to change the furniture placement in my house in order for the thing to be functional, and the fact that a hoover bot is not a complete or even near complete housekeeping solution, dulls my enthusiasm. That said, hoover bots are interesting, intriguing even, but not compelling in the way that smartphones or even smart watches are.
Affordable and reliable tech that is consumer ready may simply be nonexistent for a compelling home bot solution to any real problem.
Yes, a robot makes a lot more sense than a car.
No. Apple can’t even make a smart assistant to compete with Alexa and Google. Forget it.
Then there’s the Car – or should I say NOTHING. Stick to your racket of making toy phones obsolete every year Apple, that’s what made me money; please stop thinking you matter at all in matters of actual innovation. Tesla, Space-X, Alphabet – heck even the Chinese in Shenzhen are thinking more outside the box than you. A $60,000 Mac Pro? Way to go Apple. Fix your lousy laptops and phones before you even talk about robots. I bought AAPL decade + ago when it was cheap(er) pre-iPhone Toy Apple ; I did the same with Tesla who 10 years after the Roadster STILL has zero competition and will be rolling out 3’s and Y’s in China by end of year. Despite years of FUD from ALL sectors in the USA against the most American car built TSLA is-another no brainer especially if the Cheeto opens his trap a few more times this month – anyone could’ve pocketed $1600 in last 2 weeks with a round lot of TSLA. I bought “late” at $23 and I’m losing my AAPL to transfer to TSLA. Apple only has a downside; TSLA only has upside. Profit margin? Shove your profit margin Mr Capitalist Pig, sometimes being on the right side for humanity is more important. When my transfer is complete you won’t have to ignore my lousy attitude on this site any more. I used to be excited about underdog Apple but after the iPhone came out they lost me – Leader-Apple is a totally boring company now for more than 10 years – I won’t go into their disgusting business practices – y’all can Google that.
Boring. ⏚
Just loved the article about friends seeing a talking tube in your house and assuming it’s theirs to do with as they please. Are these the same ones who change the television channel if they don’t like what you’re watching? Technology changes, human nature doesn’t. Remember that, ‘evolved’ millennials. Everybody’s smart to being with. It’s only with age and wisdom do we realise how dumb we are.
It’s just another reason we need the ability to change the trigger name from Siri to something else.
“Hey Hoser”
This. A hundred thousand times.
8k has to be an intelligence test. Will customers buy these just because they’re better, who cares if there’s any way to deliver content? Television manufacturers got high the year everyone upgraded to HD and just keep coming up with more ridiculous reasons to upgrade a year later. They’ll bring back 3D when all else fails.
Two years ago we got a new TV. Its 1080, has a built in Roku, and does absolutely everything we want or need. We will get an 8k TV, but only when our current one no longer does the job. The way these things last though, 16k might be the standard by then.
Robots with the sophistication of the talking tubes we have now? Just waiting around to hear something that sounds like commands, no matter how ridiculous the result? No thanks.
The profitability of phones couldn’t have been lower.
The first Apple car will be a bit expensive and the experts will call it a fail.
Can’t wait to see how Apple moves the needle on this one.
Can’t say disrupts – nobody liked mobile carriers, but you’d better believe car makers can lobby harder than they did. They got electrics to play hideous noises when even internal combustion engines are silent these days (unless they need to be deliberately loud). Oh I forgot, ICE car makers play recorded engine sounds inside the cars so their boy-racer drivers can hear the broom-broom cars no longer make.
Personally, I just want a good cheap electric car, with a motor on each wheel, no brakes and the sophistication of a washing machine. That’s the promise of electrics. Navigation, communicating with the mothership and other vehicles, and all the rest are BS to drive the price up. Self driving is a myth, we can’t wait for that. I’d love a car I could jump into and say where I want to go, then stick my head back in a device for the duration (no chance of talking with passengers and watching the world outside, they’d have their heads in devices before me), but it won’t happen in my lifetime. If Cook is going for the trifecta – electric, self-driving and ride-sharing, we can all give up now and hope he’s got some glasses nearly ready.