Is Apple the next A123?

Apple hiring big brains in car battery space

Earlier this month, battery maker A123 Systems sued Apple for poaching five top engineers. A search of LinkedIn profiles indicates Apple has hired at least another seven A123 employees and at least 18 employees from Tesla since 2012.

The former A123 employees have expertise primarily in battery cell design, materials development and manufacturing engineering, according to the LinkedIn profiles and an analysis of patent applications.

A123, which filed for bankruptcy in 2012 but has since reorganized, supplied batteries for Fisker Automotive's now-discontinued hybrid electric car.

"Looking at the people Apple is hiring from A123 and their backgrounds, it is hard not to assume they're working on an electric car," said Tom Gage, Chief Executive of EV Grid and a longtime expert in batteries and battery technology.

Apple is building its own battery division, according to the A123 lawsuit. Apple did not immediately respond to a request for comment.

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Let's remember that Apple just became the first corporation to be valued at more than a trillion. They have the capital, know-how & will to pull something amazing off in the battery technology space. So my bet, is yea. Apple is the next A123!

Valued at a trillion by who? Other than Icahn.

The Wall Street Journal has reported that Apple has a well-guarded project called "Titan" which involves a full electric "mini-van-like" vehicle. They have gone so far as to suggest that Apple might be getting into building EV's--basically becoming a direct competitor to Tesla. I don't believe that's what's going on. I think Apple might be getting into the battery business, based on who is involved in this dispute. I'm quite certain that they are developing an automotive infotainment platform to compete with Microsoft and others who are already in this space. I think this is the most likely explanation for having the EV on hand--they are trying to anticipate the vehicle of the future, and come up with ways to integrate with it. Trying to turn Apple into an automotive OEM is a crazy idea, if you ask me, and I can't imagine it holding any real appeal for them. Interestingly, Charged recently reported that Tesla has picked off some 150 employees from Apple, more than any other company. Apple tries to woo Tesla people with 60% pay increases and the like, but is not having as much success.

Also of interest is that Apple has several solar power facilities that it uses to run most of the company. They're getting ready to build another big one to power a new data center in Arizona, I believe. Between these company renewable power plants and the fact that they are a huge consumer of batteries for the devices they make, I think it could make good sense for them to develop a super cell they make themselves--maybe LTO. Bear in mind, you already have to send your device back to them for a battery replacement, so they already have you locked in to whatever cell they give you.

Apple has what $200+ billion in cash? They better use it on tangible assets before Hillary is President and the Congress flips back democratic and taxes the hell out of the corporations. Think I'm crazy? When why is Warren Buffet on a spending spree these past few years?

They use a lot of batteries, and have to buy them from somebody else. Just like their competitors. They supply half the worlds phones, so use quite a few. They don't want to pay the battery manufacturer that sort of money. It is not a small part of the manufacture cost. They don't get a lot of choice here. They have to make them to get ahead. They already make good money on cells by making people send stuff back to get them changed. If they make the cells, they become much more competitive or profitable.

It's like Musk. He wants to make the best cars, and knows full well all the money is the battery. If he don't make them, he to would get pushed aside by the first battery company that also made cars. The car bit is easy. The battery matters.

Everything uses batteries, so it's good business.

It was just a remarkable newsgram, that Apple is pulling talent from A123 as part of a long-term strategic interest in the high-end of lithium-ion batteries. A123, after going to the Wanxiang Group of China, spun-off its R&D group, complete with the MIT affiliation, to A123 Venture Technologies. With Apple alongside Tesla, the bleeding-edge has just gotten a lot more interesting, more competitive. A123 is going to have to work hard to stay in the top of their game. China graduates 35 times the number of doctoral degrees than the US, so its not just American companies, but American universities. Rooting for the home team is all. Too old to learn Chinese.

friendly1uk said:

The car bit is easy.

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NO IT ISN'T!!!! This is the fallacy so many that go into the car biz fall for only to fail. EV's are even harder. Keeping in mind that nobody has yet made money selling an EV, it's hard for me to imagine that Apple is dying to start throwing it's assets at becoming an EV OEM. They would be TOTALLY out of their depth regarding the regulatory requirements, testing....they would have to essentially create a whole new company. It is a VERY different business from consumer electronics, and it is NOT simple or something you just put together overnight. My guess is that Apple is smart enough to realize this. They do seem to be in a bit of a battle of the egos with Musk though, so maybe this will cause their egomaniacal execs to do something stupid.I doubt it though.

arkmundi said:

It was just a remarkable newsgram, that Apple is pulling talent from A123 as part of a long-term strategic interest in the high-end of lithium-ion batteries. A123, after going to the Wanxiang Group of China, spun-off its R&D group, complete with the MIT affiliation, to A123 Venture Technologies. With Apple alongside Tesla, the bleeding-edge has just gotten a lot more interesting, more competitive. A123 is going to have to work hard to stay in the top of their game. China graduates 35 times the number of doctoral degrees than the US, so its not just American companies, but American universities. Rooting for the home team is all. Too old to learn Chinese.

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Actually, A123 VT does not exist anymore. It was folded back into A123 LLC at the beginning of this year. It was never truly spun off, it was just a division within A123 responsible for it's own P&L. No more.

The grid storage business was truly spun off, sold to NEC about a year ago. They remain one of A123's biggest customers.

wb9k said:

friendly1uk said:

The car bit is easy.

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NO IT ISN'T!!!! This is the fallacy so many. . . .

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While I personally agree with you I find it surprising that in this community with so many that think there's going to be millions of these on the road any day now, that you'd be somehow caught off guard that they'd be so. . . optimistic????

There's also no shortage of people who openly believe that throwing assets at the problem is effective. I mean, c'mon, as much as you read this board. . . .

wb9k said:

friendly1uk said:

The car bit is easy.

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NO IT ISN'T!!!! This is the fallacy so many that go into the car biz fall for only to fail. EV's are even harder. Keeping in mind that nobody has yet made money selling an EV, it's hard for me to imagine that Apple is dying to start throwing it's assets at becoming an EV OEM. They would be TOTALLY out of their depth regarding the regulatory requirements, testing....they would have to essentially create a whole new company. It is a VERY different business from consumer electronics, and it is NOT simple or something you just put together overnight. My guess is that Apple is smart enough to realize this. They do seem to be in a bit of a battle of the egos with Musk though, so maybe this will cause their egomaniacal execs to do something stupid.I doubt it though.

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I'm not sure if you heard me properly. I'm talking about Apple making batteries, not cars.

I drew a parallel to Musk, who is also using many batteries in his products. They are in the same business as many other people, with the same outlays. Much of which is battery. Everyone is in the same boat, doing much the same thing. Making their kit, and battery companies rich. With batteries such a big part of their projects, if they made their own they get the profits from their own kit and the power source. So they can rake in cash, or undercut the competition as the competition are likely buying batteries from them! The car bit is easy. Nothing separates one companies chances from another. From auto giants to pacific bowl start-ups. Imagine if KIA made cars and batteries though. They would have an advantage that the Audi group couldn't compete with. Yes Audi build better cars, but if they have to buy in batteries while Kia make their own, I would back Kia. The car bit is the easy bit. A very mature business indeed. Non of them make batteries though. Which are a huge cost to them.

Same with bikes. We can both make ebikes, it's easy. However if I make the batteries and you buy them, can you compete with me? I'm probably going to be the one selling you your batteries. You have no hope unless you have a bldc mine.

The Chinese understand this. While the western world are marketing giants, they make stuff. They are buying up all the resources they can. Securing their future. No amount of marketing can help us if we can't get the raw materials cheap enough. People that live in the lands of plenty seem oblivious to this at the moment. Musk and Apple are securing their futures. Somewhere we are not seeing them buying up mining rights and looking at reclaiming. I can guaranty it.

I love Tesla, but man can they spin GAAP, and non GAAP earnings. Huge difference in how they report their financials.

friendly1uk said:

I'm not sure if you heard me properly. I'm talking about Apple making batteries, not cars.

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I think I understand you. I'm going to go out on a limb and guess that you've probably never worked in automotive in a technical capacity. I think you're conception of what goes into the building of a car you can legally sell in the West is far removed from reality. The car part is not nearly as easy as you think it is...that's the very belief that has sent so many would-be auto tycoons on a fool's errand. I've seen the work of companies who thought they could just walk into the room and make a mere portion of a car--even people who you would think have a good shot--get their asses kicked hard by the fundamentals. I've seen it over and over.

I agree there's some logic in insourcing the building of battery cells if you are a large consumer of them. At the same time, realize that one of the main reasons the auto industry is presently so fractured (with OEM's making so few of their own parts), is for the purpose of diluting liability. So this is a double-edged sword.

I'm not really a subscriber to the whole "China vs. the West" paradigm, either.

friendly1uk said:

They supply half the worlds phones, so use quite a few

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I believe you have lost a track a little it is 11-12% and going down.
http://dazeinfo.com/2014/08/04/smartphone-market-share-q-2014-xiaomi-lenovo-worlds-top-smartphone-brands-are-chinese-apple-samsung-struggling/

wb9k said:

friendly1uk said:

I'm not sure if you heard me properly. I'm talking about Apple making batteries, not cars.

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I think I understand you. I'm going to go out on a limb and guess that you've probably never worked in automotive in a technical capacity. I think you're conception of what goes into the building of a car you can legally sell in the West is far removed from reality. The car part is not nearly as easy as you think it is...that's the very belief that has sent so many would-be auto tycoons on a fool's errand. I've seen the work of companies who thought they could just walk into the room and make a mere portion of a car--even people who you would think have a good shot--get their asses kicked hard by the fundamentals. I've seen it over and over.

I agree there's some logic in insourcing the building of battery cells if you are a large consumer of them. At the same time, realize that one of the main reasons the auto industry is presently so fractured (with OEM's making so few of their own parts), is for the purpose of diluting liability. So this is a double-edged sword.

I'm not really a subscriber to the whole "China vs. the West" paradigm, either.

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Yes, the automotive industry, mainly batteries. But it's not important. The point is anybody can make electric cars. It's equal opportunities. Being any good at it is another issue. The point is anybody, including you, can have a go. You may even be good at it. But it's all pointless if your competition makes batteries and you don't. They will win. Because your buying from them. How can you compete.


I don't know who you linked to parabellum, but a quick google search for apples market share shows a wide spread of results. Your result is right at the bottom. If you look at their share of the markets profits it's a different story. They take a huge chunk of the profit, doing things like calling everything back for a new battery. Which is not sales figure related. It is however directly related to making them themselves. Profit is the game, not unit figures. Though if they stop paying the battery companies profits they can lower the cost of their devices which will have a direct market impact. Improving the unit numbers and the service income they bring.


It makes perfect sense for apple to be making batteries. I guess anybody posing the question is never going to understand it though. So I won't say it a forth time.

friendly1uk said:

It makes perfect sense for apple to be making batteries. I guess anybody posing the question is never going to understand it though. So I won't say it a forth time.

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What makes sense is making cents. :lol: Ahh, profitability. Those that have access to the raw materials, including rare-earth metals, can maintain their monopoly.... err, China, that is. Tesla is not just building a gigawatt factory in Nevada. He's partnering with Panasonic to do it, and Panasonic has long-term locked in contracts with China, which still controls about 90% of metals production that go into the makeup. If I were Apple, I'd be working with an existing major, not Panasonic. Uhh, A123... I mean Wanxiang. Maybe the hire-away is a play in that direction.

friendly1uk said:

It makes perfect sense for apple to be making batteries. I guess anybody posing the question is never going to understand it though. So I won't say it a forth time.

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No argument from me on that point. I said as much in my first post in this thread. It's your repeated statement that "The car bit is easy" that I strongly disagree with.

Dauntless said:

wb9k said:

friendly1uk said:

The car bit is easy.

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NO IT ISN'T!!!! This is the fallacy so many. . . .

Click to expand...

While I personally agree with you I find it surprising that in this community with so many that think there's going to be millions of these on the road any day now, that you'd be somehow caught off guard that they'd be so. . . optimistic????

There's also no shortage of people who openly believe that throwing assets at the problem is effective. I mean, c'mon, as much as you read this board. . . .

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I don't know if I was caught off guard, but it amazes me that so many people continue to believe that making cars is easy. It's not just people on this board--they're everywhere. In today's world where fewer and fewer people can even repair a car, it's hard to understand why this myth persists. It's not like the industry has stood still for the last 100 years. We've been making batteries about the same amount of time, even a little longer...why is that not seen as the easy part? The scope there is a fraction of building an entire EV...but whole rest of the car is the easy part? Wtf?

wb9k said:

friendly1uk said:

It makes perfect sense for apple to be making batteries. I guess anybody posing the question is never going to understand it though. So I won't say it a forth time.

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No argument from me on that point. I said as much in my first post in this thread. It's your repeated statement that "The car bit is easy" that I strongly disagree with.

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If Apple could convince people that NEV's are useful, they could easily make a 'cool' one and dominate that market like they did with the iPod/iPhone markets. It is, after all, mainly just a mental block that keeps people from embracing NEV's.

Highway capable cars are at least one magnitude more difficult than NEV's.

We are very close to having self-driving conveyances. People already feel like their smart-devices are their virtual interface to their 'world', smart-conveyances could be a physical extension of that experience.

Yea, Apple is good convincing customers, selling shit for price of gold. They finally have a chance to do something useful with this talent.

gogo said:

wb9k said:

friendly1uk said:

It makes perfect sense for apple to be making batteries. I guess anybody posing the question is never going to understand it though. So I won't say it a forth time.

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No argument from me on that point. I said as much in my first post in this thread. It's your repeated statement that "The car bit is easy" that I strongly disagree with.

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If Apple could convince people that NEV's are useful, they could easily make a 'cool' one and dominate that market like they did with the iPod/iPhone markets. It is, after all, mainly just a mental block that keeps people from embracing NEV's.

Highway capable cars are at least one magnitude more difficult than NEV's.

We are very close to having self-driving conveyances. People already feel like their smart-devices are their virtual interface to their 'world', smart-conveyances could be a physical extension of that experience.

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I don't believe NEV's are going to ever be dominant in the US...not for a very long time, anyway. A car that can go a max of 25 mph and is only legal on roads with a posted speed limit of 35 is going to be all but useless for the vast majority of people in the US. I can't legally get out of my neighborhood in one. I'm getting ready to pick up a Miles ZX40ST truck (with a regular MI truck registration), but it's going to have a completely new drivetrain in it, and will be capable of at least 50 mph. I can actually use something like that, but stock, this vehicle would be a non-starter for me. NEV's don't make sense for anyone except people who rarely if ever leave the confines of the big city. Even there, the present regulations surrounding NEV's and LSV's will confine them to basically glorified golf cart status until there are big changes in the law and, even harder to achieve, transportation infrastructure.

Hi,

don't know who you linked to parabellum, but a quick google search for apples market share shows a wide spread of results. Your result is right at the bottom. If you look at their share of the markets profits it's a different story. They take a huge chunk of the profit, doing things like calling everything back for a new battery. Which is not sales figure related. It is however directly related to making them themselves. Profit is the game, not unit figures. Though if they stop paying the battery companies profits they can lower the cost of their devices which will have a direct market impact.

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You are missing a huge difference between phones and EV's. The percentage of the total cost of batteries in an iPhone is trivial.

It makes perfect sense for apple to be making batteries. I guess anybody posing the question is never going to understand it though. So I won't say it a forth time.

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Repeating it doesn't make it true.

But it's all pointless if your competition makes batteries and you don't. They will win. Because your buying from them. How can you compete?

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By building a better car. A123 went bankrupt making batteries. If BMW could buy better cells from Tesla, for less money than they can make themselves how would making their own cells help them? Lose money on each cell and make up the difference by selling a large quantity?

friendly1uk said:

I don't know who you linked to parabellum, but a quick google search for apples market share shows a wide spread of results. Your result is right at the bottom. If you look at their share of the markets profits it's a different story.

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That is other story, now, scratch your head and guess why. Now scratch your head again and think how much profit gain they will have in % comparison to total profit starting their own crap of battery production. :wink:
They are selling air.

wb9k said:

gogo said:

If Apple could convince people that NEV's are useful, they could easily make a 'cool' one and dominate that market like they did with the iPod/iPhone markets. It is, after all, mainly just a mental block that keeps people from embracing NEV's.

Highway capable cars are at least one magnitude more difficult than NEV's.

We are very close to having self-driving conveyances. People already feel like their smart-devices are their virtual interface to their 'world', smart-conveyances could be a physical extension of that experience.

Click to expand...

I don't believe NEV's are going to ever be dominant in the US...not for a very long time, anyway. A car that can go a max of 25 mph and is only legal on roads with a posted speed limit of 35 is going to be all but useless for the vast majority of people in the US. I can't legally get out of my neighborhood in one. I'm getting ready to pick up a Miles ZX40ST truck (with a regular MI truck registration), but it's going to have a completely new drivetrain in it, and will be capable of at least 50 mph. I can actually use something like that, but stock, this vehicle would be a non-starter for me. NEV's don't make sense for anyone except people who rarely if ever leave the confines of the big city. Even there, the present regulations surrounding NEV's and LSV's will confine them to basically glorified golf cart status until there are big changes in the law and, even harder to achieve, transportation infrastructure.

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If you look at people's actual driving patterns, you'll see that NEV's are a large untapped market. I live in a 'city' of 21 sq, mi. that would be a bonanza for a 'smart-conveyance' that could be shared by a group of users. It would show up where and when I need it, drop me off at the 'front door' and then go dock itself until summoned by another in the group.

parabellum said:

Yea, Apple is good convincing customers, selling shit for price of gold. They finally have a chance to do something useful with this talent.

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I remember fellow employees commenting how irrelevant Apple was back when Microsoft 'rescued' it with a loan back in the 90's. Haters will hate.