Hyundai Motor says it is in early talks with Apple

https://www.reuters.com/article/us-hyundai-motor-stocks/hyundai-motor-says-it-is-in-early-talks-with-apple-shares-surge-24-idUSKBN29D02E

by pseudolus • 6 years ago

90 99 6 years ago

reuters.com

avs7332• 6 years ago

To cooperate on batteries and cars...

The title would be more helpful if it included that information

Guest42• 6 years ago

Yes, my first thought was acquisition.

snissn• 6 years ago

that was my only thought

avs7332• 6 years ago

Same which is why I clicked on the article

I couldn’t process which way an acquisition would make sense and then I read the article and it made more sense.

whatever1• 6 years ago

Not that they cannot

zinekeller• 6 years ago

Otherwise please use the original title, unless it is misleading or linkbait; don't editorialize.

There is already a presumption that "in early talks" means in discussion of possible acquisition/merger so I think this would be the time to deviate from the source's title.

Possibly like "Hyundai in discussion with Apple about electric car collaboration", or "Apple and Hyundai considering a joint venture for cars".

anothernewdude• 6 years ago

It's a garbage bandaid rule that encourages people to seek sources that have already editorialised the title for them.

disown• 6 years ago

To cooperate on batteries and cars...

Oh you mean it isn't about an acquisition like the title sneakily implied?

The title would be more helpful if it included that information

Do you really expect any better from these people? I pretty much expect clickbait headlines or misinformation from news, news wire, etc.

mandeepj3• 6 years ago

Apple does not like to share anything from these on-going discussions. I'm surprised to see these details coming from Hyundai

teruakohatu• 6 years ago

It is possible they legally had to disclose publicly. It is information that could (did) materially effect the share price and while it might only be known by top level level staff at Apple, Hyundai may have needed to involve people from all over the company increasing the chance of insider trading.

mandeepj3• 6 years ago

Just like I speculated - now Hyundai have walked back - removing any reference to Apple - https://finance.yahoo.com/news/hyundai-walks-back-linking-ap...

tooltalk4• 6 years ago

which is to say, Apple and Hyundai are indeed in early talks.

brokencode2• 6 years ago

This is exciting news. At first when I heard Apple car rumors, I thought maybe Foxconn would start trying to manufacture cars for them, and that was a dubious proposition to me.

Hyundai/Kia have steadily turned into top tier car companies over the last few years, and Hyundai’s Genesis luxury brand has been receiving glowing reviews lately.

A partnership with these ascending and well-established companies to manufacture their cars would give me much more confidence in Apple’s car ambitions.

wintorez• 6 years ago

It’s a great news. Hyundai and its luxury brand Genesis are taking over the car market fast.

meekrohprocess• 6 years ago

This is pretty cool. An Apple car could be amazing, and something like a small electric town car probably wouldn't be too expensive as a joint pilot product between companies like Apple and Hyundai.

But, here are the big questions. Will it work with my Android phone and my relatives' Fire tablets? And will it continue to work well in 20 years when it stops getting updates?

If the answer to both of those is "yes", then I'm excited.

Dig1t• 6 years ago

Android phone and my relatives' Fire tablets?

Almost certainly not

will it continue to work well in 20 years when it stops getting updates?

Mostly likely, yes. Apple products very often have much longer lives than their competitors (if taken care of, obviously)

h4waii• 6 years ago

Consider who their competitors will be in the automotive sector and the longevity their vehicles have.

throwaway2011034• 6 years ago

What products has Apple supported for more than a decade? That's bare minimum for a car. I have a 40 year old car that I use nearly every day (or did, before lockdown) and I can still get parts for it. My newest car is 10 years old.

foepys• 6 years ago

The problem with cars is spare parts. If apple handles bumper replacements like they handle their laptop part replacements where they mostly only recommend replacing the whole logic board, I don't see people buying apple cars for very long.

Zaheer• 6 years ago

Seems off-brand for Apple. 'Premium' isn't the first thing I think of when it comes to Hyundai. I get that they've been trying to change that with Genesis line but seems like a ways to go.

brokencode2• 6 years ago

That’s Hyundai’s problem right now. They are actually making very nice cars, especially through Genesis, but their brand image has not yet caught up with the increase in car quality over the past decade.

A quality car made by Hyundai with Apple technology and brand image is an incredibly good idea for both companies.

core-questions• 6 years ago

It's a good idea for Hyundai, but it's hard to see it working out as well for Apple. When people who use Macbooks but drive Range Rovers and Teslas see this, they won't bite.

rrrhys2• 6 years ago

In Australia Hyundai has a 7 year manufacturer warranty - contrasting with typical 3 year.

To me/my circles, that means they know their cars are excellent and are prepared to bet real money on it.

Many of those cars are now coming up on the tail end of their manufacturer warranty, and still command insane resale price for what they are.

ImprovedSilence• 6 years ago

I thought they made nice cars, I had hoped they had a good value proposition. But all the nice bits have a tendency to feel cheap after a year or so, and after a few years the ride tends to go to shit. I want to like the Genesis (even test drove one a few years ago), but it was cutting too many corners to really fit in with "luxury", for the price it was.

anonytrary• 6 years ago

Boston Dynamics doesn't seem off-brand for Apple. I think that IP suits Apple.

detaro2• 6 years ago

Presumably an association with "premium" is among the things Apple is bringing to the deal.

neom5• 6 years ago

Hyundai = Foxconn.

p1mrx• 6 years ago

As the current owner of a Kona EV, I wonder how long it will take them to remove Android Auto and switch to a proprietary charging port.

andrepd• 6 years ago

Android Auto is absurdly privacy invasive. It's basically a full OBD dump sent to google, plus your GPS position. Frigging yikes.

mdtusz• 6 years ago

Are you saying that the android auto code has access to the OBD2 bus (and possibly canbus)?

Zhenya5• 6 years ago

Absolutely untrue about obd dump.

They already have your location via phone if permission is granted. ...

There is a specific, fairly narrow protocol between the phone and vehicle that enables android auto.

Source: work in the industry in this area.

puppymaster• 6 years ago

I like how Apple is approaching this. Basically they are looking for their next TSMC for car, instead of building out their own gigafactory.

medecau2• 6 years ago

foxconn sounds like a better aligned comparison

as trendy as tsmc might be these days - apple might end up going for abb, siemens, toshiba engines

somurzakov• 6 years ago

an engine in electric vehicle is a commodity, heck even one from my GE washer would work for the EV

costsNall• 6 years ago

Hyundai who also recently bought Boston Dynamics.

That could be very interesting if things go well with Apple.

WWLink• 6 years ago

I agree! The boston dynamics buy was shocking. I get that they don't have the clearest business sales plan in the world or the biggest profits in the world, but I love seeing their robots do things.

neom5• 6 years ago

Follow what Martin Wöhrle has been up to. imo SK is poised to become a real leader the future of transportation. I've been fortunate enough to have taken the last year off as a sabbatical and spent almost a year in Seoul both getting to know my in-laws and getting to know the Korean tech ecosystem. There is a real push by the top of SK to have the Chaebols play well together on "paradigm shifting" transit technology. I had the pleasure of meeting some super cool people (mostly French and German) at Hyundai(/and kia) working on really really interesting transit models.

r00fus• 6 years ago

Man, I’d love to hear more about those details if you’re able to share.

neom5• 6 years ago

Honestly probably what you already know. When you're effectively a nation state like SK (with all due respect), it's super easy to have conversations among all the players about linking (all) the traffic management systems to the modalities to the consumer experience, air or ground. Koreans are very used to multimodal transit, and have a rapid adoption rate of new technologies. If you're comfortable creating an integrated("open") information traffic system, agree to conform to standards, things like literally leaving your car stuck in traffic to drive itself to the office and switching to an electric scooter that your car automatically booked for you just up the street from your location becomes a lot easier. A lot of the primitive to create new transit systems are there, it's the cooperation/integration and government will that is missing, South Korea has these in spades.

_fhnu• 6 years ago

Hmm, surely there are cheaper forced labor options available in China?

Hyundai seems like they might be paying their employees, which seems a little off-brand for a company like Apple.

XorNot4• 6 years ago

I'm real stuck on what possible value Apple can bring to building a car. The entertainment and technology packages are an important customer facing experience, but at the end of the day it needs to get you from A to B while being shielded from the weather.

Basically all the bits which make a car valuable are outside any of Apple's competencies - transmission, suspension, air conditioning, heck even passenger seating and ergonomics.

The proposal is functionally Apple trying to buy from the ground up a whole new industrial function with near zero overlap to things they're actually good at.

0x1DEADCA0• 6 years ago

If Hyundai and Apple don't work together to deliver a car similar to Tesla's, both will lose profit potential in a crowded market.

WanderPanda• 6 years ago

Basically all the bits which make a car valuable are outside any of Apple's competencies - transmission, suspension, air conditioning, heck even passenger seating and ergonomics.

Except for maybe passenger seating all of the things are commoditised by now, I think.

I hope they take a shot at it, because competition never hurts and they still (despite their size) deliver outstanding innovative products

zippy5• 6 years ago

Your completely missing the point..

Honda sells commodities. Maserati sells status.

Motorola sells commodities. Apple sells status.

Computers are commodities, smart phones are commodities and at the end of day none of that stops people from buying from apple

Cars make a ton of sense for apple because it’s a product which a decent percentage of people will all pay a premium to get the cool version.

seabird• 6 years ago

Those aspects of a vehicle are only commoditized if you discount the massive amount of time poured into design, integration, and manufacturing engineering.

It's easy to buy some bolt-on aftermarket automotive product and attach it to your vehicle. Actually integrating that thing in a way that meets (sometimes conflicting) safety, reliability, manufacturing, cost, manpower, etc. requirements can be a special sort of hell that you wouldn't wish upon anybody.

dataking• 6 years ago

I bet you'd also be real stuck on what possible value Apple could bring to building a phone. All the bits that made a feature phone valuable were also outside of Apple's competencies. Thing is, cars are becoming more like computers.

throwawayzRUU6f• 6 years ago

The thing is - cars are not like computers and will never be.

For most workloads a normal person performs on their computer, the hardware is ridiculously over-provisioned. Most of it is idling 90%+ of the time, the utilized portion is mostly wasted in a sea of inefficiencies. Performance improvements of 100x are not uncommon. To simplify a bit - Apple's business model boils down to selling mediocre hardware at premium prices, and concealing that fact by a large amount of optimizations and polish.

Cars are nothing like that; they're already at their efficiency plateau. An improvement of 10% is considered astonishing. Cars are much more like gaming rigs - raw power is required there, the games are already reasonably optimized, and no amount of sleek design and UI polish would hide the lackluster price/performance ratio. There's a reason Apple is not in the gaming business.

For Apple to maintain their margins, they'd have to sell something like Nissan Leaf for the price of Tesla Model S.

XorNot4• 6 years ago

Apple weren't replacing feature phones. They were replacing PDAs with the iPhone. Which already had Win CE phone/PDA hybrids in the market, and Blackberry which persisted a good while longer due to market penetration in business.

But more importantly, they were integrating something obvious: people wanted an iPod that was also a phone, that was also a PDA. Which meant they got to carry one device, and they wanted that to work well. Apple as a computer manufacturer and software company did have core competencies across these fields.

Where is that for the automotive industry though? Apple have nothing to bring to the core issue of transportation which is transportation and their manufacturing expertise is in solid-state electronics, not the automotive supply chain (which is massive). They don't work with traction-scale systems, and they don't work with human enclosures or really any of the types of processes and problems which cars have. The only competency they bring is software, but as a company they don't have a safety-oriented engineering function (AFAIK) so the synergy is essentially "iOS but in the entertainment system".

Apples contribution is "the head unit", and maybe that's enough, but that's not an "Apple" car, and that's a problem - they'd be trying to build up a manufacturing capability from scratch and that takes time. It puts them behind Tesla in a race to execute, and as Tesla has been discovering you can't just automate your way out of a lot of the problems there.

Which leaves you at, what is an Apple car? It's rebadged Hyundai with an Apple headunit in it.

wbsss4412• 6 years ago

People seem to be making the point more and more frequently on HN, but it borders on revisionist history.

TONS of people saw the utility of the iPhone almost immediately. Camera phones we getter more and more popular, some phones were getting basic web browsing capabilities. When the iPhone was released everyone I knew was immediately interested.

The only ridicule from that era was about the price, Ballmer thought it was too high.

Making the analogy of the iPhone to a car is a huge stretch.

threeseed• 6 years ago

but at the end of the day it needs to get you from A to B

You really don't understand cars if you believe this.

Cars are second only to property in terms of the biggest investments someone will make in their lifetime. As such people decide what to buy based on a number of factors including "how it feels to drive" and "what this car says about me". Because in most cases they are sticking with that decision for a decade.

If it was based purely on the cheapest way from A to B then there would be no brands like Ferrari, Lamborghini, Aston Martin etc because they are based on desire rather than value. And if there's one company that understands desire it is Apple.

aetherson• 6 years ago

Cars aren't investments.

jhoechtl• 6 years ago

If it was based purely on the cheapest way from A to B then there would be no brands like Ferrari, Lamborghini, Aston Martin

Those brands account only for a tiny fraction of the car market though. For the rest the cost of buying and maintaining a car is certainly a bigger fraction of the acquisition decision.

XorNot4• 6 years ago

"what this car feels like to drive" is part of the A to B part though. It's engine, suspension, transmission, steering linkages. Passenger seating. It's not a software interface.

rswail2• 6 years ago

Apple had no value to bring to music players in the early 2000s, they had no value to bring to mobile phones in the late 2000s, they had no value to bring to watches in the mid 2010s, they had no value to bring to audio in the late 2010s...

Apple sells an ecosystem as a brand. Whether you buy into the branding or the ecosystem is up to you. Their brand is about status, quality, privacy, identifying their customers as the people that buy their hardware and services, not people they can sell the data to.

Vehicles are about to become yet another electric/electronic device you own. In the same way that my mobile phone has a network of cell towers that someone sells me access to, I could see Apple doing that with charger providers.

If charging stations become self-provisioning, with local power generation and storage, then the cost of actual power transfer to my vehicle has a zero marginal cost.

So in the same way that my mobile plan is "all you can eat" in terms of calls (and data, mostly), I could see how vehicle charging could work the same way.

So buying a car becomes: 1. Choose a vehicle based on status, branding, equipment 2. Choose a vehicle "plan" based on usage

So in the same way as iPhones and iPads sell Apple Music, Apple Pay etc, iCar sells all the existing services, plus allows Apple to co-brand with electric networks. So think "Apple iCar and Shell EV, your safe and effective partners for travel".

When autonomous vehicles become available, you can integrate that autonomy into the Apple ecosystem, in the same way that Apple Maps learns your travel patterns and makes suggestions, Apple can use that data to send a vehicle to you when you "need" it.

sveme• 6 years ago

Machine learning, AR, autonomous driving? That‘s Apple competencies that few car companies have.

pazimzadeh• 6 years ago

Is this going to lead to the Motorola ROKR of cars?

drivebycomment• 6 years ago

“Apple could see Hyundai as an ideal partner, because when it comes to legacy U.S. automakers, they all have strong union, which Apple would like to avoid,” said Kevin Yoo, an analyst at eBEST Investment & Securities.

This makes no sense whatsoever - Hyundai Motor has a strong labor union with a long history of frequent and drawn-out strikes: http://www.koreaherald.com/view.php?ud=20200426000206 . So it's a complete nonsense to mention the labor union as a possible reason to avoid US automakers and choose Hyundai.

bgorman• 6 years ago

The foreign car manufacturers in the US are all in the south, where they can operate without labor unions.

Hyundai's assembly line in the US seems to be in Alabama:

https://www.hmmausa.com

snoshy• 6 years ago

While this is certainly an interesting point, it really doesn't seem feasible for Apple to partner with any existing car manufacturer while escaping a higher level of human rights scrutiny than other firms. They've had many instances in the media over the years documenting this type of exploitation, all in non-US locations to be sure, but nevertheless, it's a concern that has tarnished the brand a bit over the years.

Furthermore, non-unionized partners seem unlikely to be part of the criteria on the face of it, if you're attempting to build a presumably high-end product like an Apple car. If worker benefits deriving from union activity are a large enough threat to your product, it's unlikely that you're going to be able to command high margins on it, as Apple seems to do.

Lastly, while it's one of many minor concerns, perhaps, I find all of this quite implausible, given the stature of the Apple brand. It's a huge risk to potentially dilute the Apple image with a failed or likely initially not-quite-great partnership with a company like Hyundai. Why do that and not approach one of the dozens of other higher end manufacturers like Mercedes Benz, or BMW, that are likely wanting for battery tech anyway?

rswail2• 6 years ago

Typical analyst BS. Unions are only a "problem" for US manufacturers because employers (and pension funds) are burdened with ongoing health insurance.

If the US becomes as civilized as every other OECD nation in terms of health provision, making it available to all residents and untying it from employment status, then the burden of that cost will be removed.

ssivark• 6 years ago

It’s interesting to speculate whether Boston Dynamics might be in play :-)

mdasen• 6 years ago

https://www.macrumors.com/2021/01/07/apple-car-hyundai-negot...

MacRumors has a statement from Hyundai saying, "We understand that Apple is in discussion with a variety of global automakers, including Hyundai Motor. As the discussion is at its early stage, nothing has been decided."

So, Hyundai has confirmed that Apple is talking with them, but they also said that they believe that Apple is talking with other car companies as well. At this stage, it doesn't seem like there's anything special about Hyundai. Rather, the news leaked about Hyundai while it didn't leak about other talks.

I'm skeptical of an Apple entry into cars, but it seems like it would make sense for them to contract out the manufacturing to an established player - as they do with their phones and laptops. It would allow them to create top-notch vehicles from day-1 with superb fit and finish rather than trying to build the plants and workforce to handle it. They might want to bring manufacturing under their own control eventually, but I think Apple would want to be able to offer Apple-quality vehicles to a mass market sooner than they could build that capability themselves.

This isn't a criticism of Tesla, but it took them a long time to get to where they are today. They were founded in 2003 and its first mass-market car (the Model S) rolled out in 2012. Even then, the Model S wasn't really mass-market. The Model 3 launched in 2017. Again, this isn't a criticism of Tesla as much as noting that it takes years (or decades) to launch a car company with large-scale manufacturing capability. Tesla's global capacity in 2020 was only 500,000 vehicles (our of a 92M vehicle industry).

Plus, even today, Teslas tend to receive some criticism for their fit and finish. My friends love theirs and say that it's like how the iPhone was a complete re-imagining of the phone. They also note gaps and things that make it feel less premium. I think Apple would like to avoid that.

If Apple can produce the designs and partner with another company to manufacture the vehicles, it could get to market a lot quicker with a higher quality product than if it tried to start manufacturing from scratch. There's a lot of politics and tariffs around cars and major companies like Hyundai have created manufacturing to make sure to avoid those tariffs. Apple would likely need American, Asian, and European manufacturing if they wanted to do a global launch.

To switch gears a bit, the part of this story that seems really fishy to me is the idea that Apple has "breakthrough battery technology". That seems unlikely. Battery chemistry advances don't seem like an area where we see "breakthroughs" a lot and it would seem like something that would also appear in their phones if it existed. In fact, a big portion of the economy is run off rechargeable batteries at this point - people demand phones with bigger batteries, Tesla is doing everything it can to make batteries cheaper and better, VW/Hyundai/Kia/GM/Ford/etc. are all trying to get electric cars that work well, power grid storage gets talked about a lot...

To me, it seems like this Apple Car would be more about the experience of an Apple designed product than about breakthrough automotive technology. Elon Musk has said that electric cars aren't that complicated compared to internal-combustion cars and it seems like where Apple would do well would be focusing on the part that people buy their products for: the experience. That is, at least initially.

Initially, the iPhone didn't have any special hardware. While the iPhone might have special cameras or Apple-designed processors today, it was initially all commodity stuff that anyone could buy brought together by Apple's casing and software. Apple might want to design its own suspension or whatnot in the future, but it seems like an initial vehicle (for 2024) would be more about the Apple experience than about automotive tech.

Personally, the auto industry doesn't seem like a great market. Tesla's market cap is enormous, but as people have noted, it's higher than the ten largest auto makers combined. Whether Tesla is worth its market cap can be debated, but it almost certainly isn't worth its market cap based on the automotive industry alone. If you're a Tesla bull who believes they'll become huge in electric grids, home solar, and a bunch of other industries, great. But when we're talking about Apple, we're talking about a company launching a bid to likely become a niche car company with the possibility of being worth $50B like BMW. It seems like a very big bet for an industry that isn't worth that much. Mazda is a $5B company. Subaru is a $16B company. Even Volkswagen is under $100B. Toyota is worth less than 10% what Apple is worth at $212B - and Toyota is a huge outlier.

It feels weird to enter into an industry mostly unrelated to your core competency when it would move the needle 2-3% - maybe 5-10% if you're really lucky and create the next Volkswagen or Toyota. Why enter that market?

With an iPhone, Apple's competency was in writing software for electronic devices. People loved their iPods, why not a phone that is also an iPod? People loved their iPhones, why not an iPhone HUGE (aka iPad)? It's basically the same device. Watch? Again, same stuff. Cloud services to accompany those devices? You already employ a ton of software engineers, might as well get some premium recurring revenue services. Even if one of these isn't the biggest hit ever, it's using many of the same skills and competencies as the rest of Apple's stuff.

With the car, it feels like it's a relatively small market without the margins that Apple is used to and far away from their competencies. Then again, maybe Apple thinks that they'll do to the car market what they did to the phone market: eliminate most of the incumbent players and the market will coalesce into two players (Apple/Google for phones or Apple/Tesla? for cars). Maybe they're thinking that they have more core competency around the future of vehicles (sensors, processors, machine learning, etc.) and that the competencies around current cars (suspensions, engines, etc.) will somewhat fall away in the new world.

I mean, a month before Jobs introduced the iPhone, everyone was creating renderings of a device with a iPod click-wheel on one side and a phone dial pad on the other. Maybe Apple has something much nicer in store.

thih9• 6 years ago

[breakthrough battery technology] would seem like something that would also appear in their phones if it existed

Assuming it doesn’t require different conditions, e.g. larger capacities.

Razengan• 6 years ago

This. Maybe it's a mini-fusion reactor they can't fit into an iPhone.

mandeepj3• 6 years ago

Initially, the iPhone didn't have any special hardware

Every hardware piece was special in the initial iPhone - from cornea glass, sensors, processors and what not

RL_Quine• 6 years ago

The original iphone used a rather crappy off the shelf SoC and almost nothing custom.

tooltalk4• 6 years ago

Well, Apple mostly just bought off-the-shelf parts from Samsung -- from AP, to NAND storage, to DRAM, LCD displays, battery, etc, etc -- with just minor tweaks and also readily available to other OEMs. Apple's magic was mostly in their feel-good marketing.

Hyundai Motor says it is in early talks with Apple

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