Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      World Bank set to back South Africa’s big energy grid roll-out

      20 June 2025

      The algorithm will sing now: why musicians should be worried about AI

      20 June 2025

      Sita hits back at critics, promises faster, automated procurement

      20 June 2025

      The transatlantic race to create the first television

      20 June 2025

      Listed: All the MVNOs in South Africa – 2025 edition

      19 June 2025
    • World

      Watch | Starship rocket explodes in setback to Musk’s Mars mission

      19 June 2025

      Trump Mobile dials into politics, profit and patriarchy

      17 June 2025

      Samsung plots health data hub to link users and doctors in real time

      17 June 2025

      Beijing’s chip champions blacklisted by Taiwan

      16 June 2025

      China is behind in AI chips – but for how much longer?

      13 June 2025
    • In-depth

      Meta bets $72-billion on AI – and investors love it

      17 June 2025

      MultiChoice may unbundle SuperSport from DStv

      12 June 2025

      Grok promised bias-free chat. Then came the edits

      2 June 2025

      Digital fortress: We go inside JB5, Teraco’s giant new AI-ready data centre

      30 May 2025

      Sam Altman and Jony Ive’s big bet to out-Apple Apple

      22 May 2025
    • TCS

      TCS+ | AfriGIS’s Helen Hulett on how tech can help resolve South Africa’s water crisis

      18 June 2025

      TechCentral Nexus S0E2: South Africa’s digital battlefield

      16 June 2025

      TechCentral Nexus S0E1: Starlink, BEE and a new leader at Vodacom

      8 June 2025

      TCS+ | The future of mobile money, with MTN’s Kagiso Mothibi

      6 June 2025

      TCS+ | AI is more than hype: Workday execs unpack real human impact

      4 June 2025
    • Opinion

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 2025

      Singapore soared – why can’t we? Lessons South Africa refuses to learn

      13 June 2025

      Beyond the box: why IT distribution depends on real partnerships

      2 June 2025

      South Africa’s next crisis? Being offline in an AI-driven world

      2 June 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » Motoring » Apple tilts to the iPhone playbook for its upcoming car

    Apple tilts to the iPhone playbook for its upcoming car

    By Agency Staff11 March 2021
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    Apple has a tried and true approach to launching new products: The company designs in-house, sources its own components, and works with a contract manufacturer to assemble it for sale.

    As the tech giant plots a foray into the car market, it could adopt a similar strategy — working with a lesser known contract manufacturer — after talks with some brand name automakers stalled.

    To build a vehicle, Apple has three primary options: partner with an existing car maker; build its own manufacturing facilities; or team up with a contract manufacturer such as Foxconn or Magna International.

    The Cupertino, California-based company has reached out to automakers including Hyundai, but the discussions have not gone well

    The Cupertino, California-based company has reached out to automakers including Hyundai, but the discussions have not gone well. In this scenario, Apple would develop an autonomous system for the vehicle, the interior and external design, and on-board technology, while leaving the final production to the car maker. Such a deal would essentially ask an existing car company to shed its brand and become a contract assembler for a new rival.

    A longtime manager at both Apple and Tesla said this would be like Apple asking bitter smartphone rival Samsung Electronics to manufacture the iPhone. Apple wants to challenge the assumptions of how a car works — how the seats are made, how the body looks, the person said. A traditional automaker would be reluctant to help such a potentially disruptive competitor, said the person, who asked not to be identified discussing private matters.

    Fizzled

    Indeed, discussions between Apple and the car industry seem to have fizzled in recent months. Hyundai and Kia Motors confirmed talks on the development of an electric car, but backtracked soon after. Apple’s self-driving car team met with representatives from Ferrari last year. It’s unclear what was discussed, but the talks didn’t advance, according to a person familiar with the meeting.

    In February, Nissan said it wasn’t in talks with Apple. Volkswagen CEO Herbert Diess said he’s “not scared” of Apple’s entry into the industry. BMW’s CFO recently said he sleeps peacefully.

    For its computers, phones and tablets, Apple relies on contract manufacturers such as Foxconn, Pegatron, Wistron, Flex and Luxshare. The iPhone maker has avoided building its own factories, an effort that would cost billions of dollars in construction, worker pay and training, along with new liabilities and complex deals with local governments.

    Apple’s talks with Hyundai and Kia were short-lived

    Factories are generally low-margin businesses. Apple leaves that to partners, while focusing on product design and development. The company’s profit margins dwarf those of suppliers such as Foxconn and Pegatron.

    Tesla, the most successful electric car maker to date, has lost billions of dollars running its own factories and only recently began generating regular income. Last year, the company reported a profit of almost US$700-million. Apple made more than $60-billion in the same period.

    Auto industry “profit margins are lower than Apple’s current model”, Goldman Sachs analysts wrote in a recent note to investors. Some luxury brands, such as Ferrari, are more profitable, but those are “edge cases and potentially difficult to replicate at higher volumes”, the analysts added.

    Apple is more likely to go with a contract manufacturer because that’s the business model they’re used to

    Apple is more likely to go with a contract manufacturer because that’s the business model they’re used to, said Eric Noble, president of consulting firm the CarLab. He thinks a partnership with an existing car maker would be a power struggle because both companies are used to tightly controlling their supply chains.

    This is why Foxconn and Magna are two primary contenders for Apple’s business, according to industry insiders.

    Foxconn, also known as Hon Hai Precision Industry, has an existing relationship with Apple as the main assembler of iPhones. And the Taiwanese company is already branching out into the car business. In October, it introduced an electric vehicle chassis and a software platform to help car makers bring models to market faster. Last month, it unveiled a deal to assemble more than 250 000 EVs a year for the start-up Fisker.

    History with Apple

    An Apple employee involved in manufacturing said Foxconn is used to having Apple engineers tell it what to do and that the company’s factories are already filled with Apple-designed equipment. The person asked not to be identified discussing sensitive matters.

    Magna has some history with Apple, too. The two were in talks to build Apple’s car when the iPhone maker first set out on this path about five years ago. Magna is also a lot more experienced at making cars. It assembles luxury models for companies including BMW, Daimler and Jaguar Land Rover.

    The CEO of a well-known self-driving car company was surprised to see Apple talking to existing car makers when an option like Magna exists.

    Hussam Abd/Unsplash

    Magna is the most logical choice, said Noble, who has worked with the Canadian auto supplier on projects in the past and calls the company “amazingly good” at what they do.

    For its part, Apple appears to be designing its car with production in mind. The company recently posted a job listing seeking a “senior hands on manufacturing engineer” for its special projects group, the team leading its work on a car. The candidate will be responsible for growing a team of engineers focused on manufacturing strategy and the supply chain. The person is also required to have experience working with aluminium, steel and composites, key materials in cars.  — Reported by Mark Gurman and Gabrielle Coppola, (c) 2021 Bloomberg LP



    Apple Apple Car BMW CarLab Eric Noble Ferrari Foxconn Hyundai Jaguar Land Rover Kia Motors Nissan Pegatron top
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleGovernment expects to vaccinate 65% of population
    Next Article UK takes aim at Facebook again over end-to-end encryption

    Related Posts

    Stolen phone? Samsung now buys you an hour to lock it down

    18 June 2025

    Samsung plots health data hub to link users and doctors in real time

    17 June 2025

    10 red flags for Apple investors

    13 June 2025
    Company News

    Making IT happen: how Trade Link gears up to enable SA retail strategies

    20 June 2025

    Why parents choose CambriLearn for online education

    19 June 2025

    Disrupt first, ask questions later – the uncomfortable truth about incident response

    18 June 2025
    Opinion

    South Africa pioneered drone laws a decade ago – now it must catch up

    17 June 2025

    AI and the future of ICT distribution

    16 June 2025

    Singapore soared – why can’t we? Lessons South Africa refuses to learn

    13 June 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.