creative industries

How Do You Want to Monetize This? (Pt 3) The steps in between theory and business

In business, at times it can be hard to understand the application of the ‘big theory’ to the practical, everyday nuts and bolts of day-to-day business. And so, it can be difficult to apply Ben Thompson’s Aggregation Theory to business decisions in the context of running a small, digital content creator.  Even where a clear end-goal is stated – Aggregation Theory suggests niche suppliers maximise subscription revenue via assets they control (e.g. one’s own website) - the intervening steps between having successful content and subscription Nirvana are less clear. This post is my best guess* at the application of Aggregation Theory to a situation that has arisen at another ‘actual play’ digital content producer, called The Glass Cannon Network.

Background: The Glass Cannon Podcast has been running for over four years, and grown in audience to a point where, in January of this year, it was announced that cast member, Joe O’Brien, would become the second member to quit their day job in order to help grow the podcast into a business called the Glass Cannon Network (GCN). O’Brien joins fellow cast member and CEO of GCN, Troy Lavallee, in focusing full-time on growing the podcast into a sustainable business.  As they freely admit (see the quote from Troy Lavallee below, or listen to the introduction of podcast #192 – The Eyes Have It by Joe O’Brien at 2:27 onwards), this puts more pressure on GCN to succeed with monetising their content.  Naturally, growing audience for their content, including a newer podcast, entitled ‘Androids & Aliens’ (A&A) is always on their mind.  In April of this year, Lavallee, announced, via their blog, that they would be trialling advertisements in A&A, as well as a partnership with Starburns Audio.  Starburns Audio are a studio that produce, amongst other content, the animated series, Rick & Morty.  Under the agreement A&A would join Starburns’ lineup of comedy podcasts, with the content sharing (imho) a distinctive, raucous but intelligent ‘male’ humour.

Lavallee is open about his motivations for the move and also details some of the logistical constraints that inform his decision:

“If we want to compete with the shows that are getting 1 million downloads per month, partnerships like this have the potential to increase the speed at which that can happen.

“I’m sure a lot of you are curious as to whether an ad-free version will be made available either on Patreon or via a subscription service. At the moment, I don’t have any plans for that because, frankly, that’s not what this experiment is about. I also don’t want the story we’re telling with A&A tied up in that one RSS feed we have for the Patreon where their platform does not offer the functionality yet to have separate shows with their own feed. That’s not to say we won’t offer it in the future, but for right now, we need to see if this is going to work as is (sic) stands. There is a lot more at stake now than there was a year ago when people’s livelihoods didn’t depend on the success or failure of the Network. The Patreon itself is going to be undergoing changes soon as we add another show to our lineup with our upcoming Emerald Spire playthrough GM’d by Joe. We’re bringing new personalities onto the Network as well. All of these changes cost more time and money. For the cost of a cup of coffee, I want people to feel like they’re getting more than their money’s worth with Raiders and soon Emerald Spire, not bummed out about what they’re not getting.” – Troy Lavallee, CEO, GCN. Accessed 10:04am 21/6/19.

Thompson’s own thinking on the application of Aggregation Theory for content creators (‘suppliers’) is worth repeating:

“For suppliers, the antidote for Aggregation is to go direct to consumers; the key is to embrace the same forces that drive Aggregation. First, the addressable market should be the entire world, not just a limited geographic area. Second, the same sort of automated payment tools available to advertisers on Aggregators can be leveraged for consumers; indeed, the tools for consumers, particularly given the lower dollar amounts and decreased need for paperwork, can be as simple as Apple Pay, and they can scale indefinitely. Third, a freemium approach to content means that social networks can be used for user-generated marketing.” Ben Thompson, The Cost of Apple News,, February 13, 2019, accessed 11/4/19, 4:57pm.

Thompson goes on to say that niche content providers (such as his own Stratechery subscription newsletter) are better served by a subscription model, seeking to extract more revenue from fewer audience members, rather than the other accepted business model, which is to seek to extract small amounts of revenue from millions of audience members via something like an advertising model. The latter assumes of course, one does have an audience of millions.

So from the above, it appears GCN is going against a tenet of Aggregation Theory, by placing its content on another platform, that they do not control, and what is more, by seeking to raise revenue by ad placements. It is unclear from the post whether the ad placements are direct advertisers, with ads embedded in the content (e.g. by having the podcast talent read the advertisement as one sees on Critical Role read out by Sam Riegel at the beginning of each show, or through Gimlet podcasts, or like the direct-to-home mattress ads one frequently hears in podcasts) or whether it is mass advertising, including algorithmic advertising that is controlled by the platform or aggregator, such as one sees on YouTube. [Edit: The Patreon page comments confirm the ads are being managed and served through Starburns – See ‘Posts’ tab on GCN’s Patreon page, especially the post dated Apr 7 4:04am – ‘Controversial Ads’].  In my understanding of Aggregation Theory, the former, direct advertising is probably okay (if the advertising directly goes to GCN), but the latter form of mass advertising is not recommended, unless the primary strategy is to leverage the platform’s network effect for building audience (i.e. the third ‘freemium approach’ quoted from Thompson above), with ad revenue a welcome by-product.

This is not to say Lavallee and co. are foolish to try what they are doing.  So much of any theory, requires empirical evidence to test its accuracy and furthermore identify the thresholds for where the theory can apply or not, and to this end, Lavallee has clearly stated the exercise is an ‘experiment’ (see quote above).  In terms of metrics, Aggregation Theory suggests a key performance indicator (KPI) to monitor is audience growth, especially paying subscriber growth, through GCN’s own website - that can be directly attributed to posting content on Starburns Audio.  Lacking a clear metric on this, one might infer the KPI by using past data to infer attrition ratios to provide an estimate of likely subscriber take-up from audience gained on the GCN website.

Another difficulty of applying any theory in business is putting the cart before the horse.  Aggregation Theory suggests a number of actions, but new content required to make a subscription offering attractive needs to be cash-flowed. Lavallee is upfront about this issue:

“The Patreon (i.e. GCN’s subscription service running on the Patreon platform) itself is going to be undergoing changes soon as we add another show to our lineup with our upcoming Emerald Spire playthrough GM’d by Joe. We’re bringing new personalities onto the Network as well. All of these changes cost more time and money. For the cost of a cup of coffee, I want people to feel like they’re getting more than their money’s worth with Raiders and soon Emerald Spire, not bummed out about what they’re not getting.” – Troy Lavallee, CEO, GCN accessed 11:10am 21/6/19. Parentheses added.

Clearly, Lavallee and co. have the right idea: They wish to make a subscription offering that is outstanding value for GCN’s subscribers.  The difficult question is how much GCN can dance with potential rival niche content aggregators like Starburns Audio and Geek & Sundry?

[Edit 23/6/19:  A few hours after I posted my musings, I was alerted on Twitter of GCN reaching 6000 subscribers on their Patreon account.  The following italicised text is written in response to that update:

Is there another way for GCN to increase their financial viability without partnering with Starburns?  Once again, this is an empirical question that should be carefully tested.

However, prima facie, GCN appears to have recently reached a position of strong cashflow.  At the time of writing, GCN’s Patreon following was 6,019 patrons, paying $40,816 per month with a stated aim of reaching $50,000 per month.  Despite the fact that Patreon subscribers may unsubscribe at the end of each month, this campaign is a clear indication that GCN are on the right path by developing a subscription following for their content. It also points to GCN being in a strong cashflow position for the short-term (say, 6-12 months of ‘runway’).

However, it begs the question, why doesn’t GCN use this revenue to fund targeted ad campaigns over social networks, such as YouTube and Patreon?

The obvious (and fair) answer is that they have only recently reached these levels on their Patreon campaign and have not had time to reflect upon things yet.

So what should GCN do assuming Aggregation Theory is correct? From personal (nerdy) experience, I have found new ‘actual play’ role-playing game content on YouTube via YouTube advertising suggestions placed in the leading ‘actual play’ role-playing YouTube channel, Critical Role (Mentioned in many of my previous blogposts). This to me appears to be the right approach for niche digital content providers who have the cash flow (whether available via ‘bootstrapping’ and/or debt): i.e. Leverage social networks and, as Thompson said above: “(E)mbrace the same forces that drive Aggregation”.

Teaming up with Starburns brings GCN’s niche content to a niche ‘aggregator’ (here I’m using the term in the non-Aggregation Theory sense of a site that simply adds lots of similar niche content, such as Geek & Sundry).  Ultimately, the success of the Starburns partnership for GCN will be determined by what deal is struck and the goals GCN have set for themselves for this partnership.  What is clear though is that, according to my own interpretation of Aggregation Theory, it definitely benefits Starburns, who will be in a better position to leverage the model suggested by Thompson: Driving people to subscribe to their niche content site that they, Starburns, control.

In contrast, if cash flow is not an issue, a targeted YouTube ad campaign (and perhaps in the near future, a Spotify ad campaign?) provides a clearly measurable Return on Investment (RoI) to GCN that can be tweaked and tested over time.

Note too, in my interpretation, this article by Ben Thompson flags a poor outcome for niche aggregators, such as Starburns, who might come to depend upon revenue raised through advertising in the style of Google AdSense or YouTube (i.e. algorithmically inserted pre-, mid- and post- roll ads etc.)

End of 23/6 edit.]

I look forward to seeing future steps by GCN and similar businesses. To my mind, these types of digital content businesses are at the forefront of a living experiment in business model innovation in this brave new paradigm. I welcome thoughts and suggestions on this topic and wish the GCN the best of luck on their quest for the monetization Holy Grail.

[Edits were made on 24/6 to acknowledge the short period between the Starburns deal and the recency of reaching US$40K on their Patreon campaign.]

The David versus Goliath battle faced by Australian creative industries and what they might do to win (Part 4: The Needs of the Australian Creative Industries Sector)

In this next section, we examine the needs of the Australian creative industries, with a particular emphasis on the arts and cultural sector.  We do this with a view to seeing how the business models explored in Part 3 might fit with the needs of our sector in Part 5 of this series. This is the fourth section in a series of blogposts that examines ramifications of the small size of most Australia creative businesses and explores strategies for resolving issues raised here.

In the previous blogs, we explored:

Part 1: We’re Tiny. The tiny size of Australian creative industries

Part 2: New vs Old Paradigms

Part 3: Business Models for the New Paradigm

In future blogs, we will look at:

Part 5: How a new media model solution might look in the arts and cultural sector


Part 4: The Needs of the Australian Creative Industries Sector

Needs of the Australian creative industries with a particular focus upon the arts and cultural sector.

At BYP Group, we research and consult extensively with the Australian creative industries including the arts and cultural sector. We hear perspectives from the funders as well as from the artists and arts organisations that create the art.

Below we outline some of the major issues most frequently raised to us by members of this community over recent years.

  1. Sustainable careers for artists at all stages of practice including related issues e.g.:

    1. Business skills especially

    2. Marketing and communications skills to grow and access audience

    3. Awareness of technology and its impacts on their practice

    4. IP monetization

  2. Affordability of space especially

    1. Space for developmental and experimental work

  3. Professional and creative networks that endure beyond a funding grant or period

    1. Difficulty in career progression from early to mid, mid to established.

    2. Cross-over into the private sector for

      1. ‘Embedded’ work

      2. Service contract work e.g. design, innovation, branding, production skills

  4. Diversity of access to the arts especially target groups such as

    1. Gender

    2. ATSI

    3. CALD

    4. Disability

  5. Funding for multi-disciplinary arts that may fall between traditional funding criteria

  6. Increased Strategic impact of funding through e.g.

    1. Increased co-ordination and collaboration between government entities

  7. Lack of economies of scale and the problems associated with this e.g.

    1. Lack of creative clusters and hubs to help increase scale

    2. Activation of the night-time economy

    3. Too much time spent on non-creative activities e.g.

    4. Office management and space maintenance

    5. Marketing and promotion

  8. An environment that generates collaboration, peer learning and cross-pollination

  9. Creative spaces which creates a sense of community and has its own identity

  10. International engagement frequently due to

    1. Lack of scale to overcome e.g.

    2. Tyranny of distance

    3. Insurance and coverage costs (lack of scale)

    4. Lack of familiarity with foreign cultures

    5. Lack of Australian arts industry ‘brand awareness’ in the international marketplace

  11. Public visibility of the arts, especially at the independent and small organisation level especially

  12. Showcasing opportunities, preferably before an international audience

The above is by no means a conclusive list of the sector’s needs.  There is also some double-up in needs, which illustrates the pervasiveness of the issue of scale described in earlier sections of this blog.

Comparison of independent screen media content creator to independent artist

In the independent screen sector we see many overlapping issues.  Some interesting exceptions include:

  • Awareness of technology and its impacts on their practice

  • Diversity of access to the arts especially target groups such as

    1. Gender

    2. ATSI

    3. CALD

    4. Disability

  • An environment that generates collaboration, peer learning and cross-pollination

  • International engagement frequently due to

    1. Lack of scale to overcome e.g.

      1. Tyranny of distance

      2. Insurance and coverage costs

  • Awareness of technology and its impacts on their practice

As discussed earlier, media was like the ‘canary in the coalmine’ of Disruption.  Consequently, it tends to lead those arts and cultural sectors that are not easily digitized in nature.

This is a generalization and it is common for incumbents and independents alike not to understand the new paradigm.  Bob Iger, the CEO of Disney mentioned in Part 2, appears to have made a sudden and drastic strategic turn-around in recent times. He has decided to pivot his multi-billion dollar organisation into become an online aggregator and distributor to rival Netflix.

The bottom end of the screen sector has benefitted the independent screen practitioner to get their work produced and seen, frequently before an international audience e.g. on Facebook, YouTube

  • Diversity of access to the arts especially target groups such as

    1. Gender

    2. ATSI

    3. CALD

    4. Disability

We have observed in our research the success of YouTubers from CALD backgrounds such as Rackaracka, Superwog, Natalie Tran, John Luc (MyChonny), et al.  We have also seen the success of Aboriginal Australian dance group, Djuki Mala (formerly the Chooky Dancers) which rode off the back of their viral dance clip.  The Katering Show is an example of an all-female cast YouTube hit that has ‘crossed-over’ onto broadcast television.

The above suggests to us that the new media paradigm has been beneficial to diversity and access for these target groups.  This is probably due to the way the Internet has allowed smaller, independent creatives to bypass traditional chokepoints of production and distribution.

  • An environment that generates collaboration, peer learning and cross-pollination

The Internet allows rapid transfer of ideas and collaboration especially in digital-only content.  We note the example in games of Australian sound designers, KPow! Audio who collaborated with content creators around the world to help make the award winning Banner Saga game series.

Still, there may be even more benefits to be had from physical spaces for collaboration, especially across disciplines.

  • International engagement frequently due to

    1. Lack of scale to overcome e.g.

      1. Tyranny of distance

There are clearly still issues of scale that we have identified for independent screen practitioners above. However, the international nature of the Internet has enabled independent Australian screen practitioners (such as those mentioned above) to reach international audiences.  Whereas in the past they may have served only a small, unsustainable audience within Australia, now a small percentage of a global audience can prove sustainable.


Comparison Thought Experiment

At this point, we invite readers to consider the online profile of an Australian artist you know to that of the example OOCC’s above.

Even the unscaled OOCC example we show above has over 60,000 YouTube subscribers.  Are there many Australian non-screen artists you know of with that kind of online reach?

Regardless of obvious reasons for this disparity – it is a full-time creative pursuit and enterprise in itself to produce any type of art at the highest levels, (this is also true of the amount and quality of video content to become a successful YouTuber) - wouldn’t it be good if Australian artists couldhave this kind of online reach?

In the next part of our series, we seek to apply the new paradigm screen business model in a manner that might assist Australian independent artists.

The David versus Goliath battle faced by Australian creative industries and what they might do to win (Part 5: How a ‘new paradigm’ business model might help Australian artists)

This is the fifth and final part of our blog series in which we explored the David vs Goliath battle faced by the Australian creative industries, and what they might do to achieve success in the face of international competition.

In this section we attempt to apply the ‘new paradigm’ screen business models explored in Part 3 above, within the context of the Australian arts sector.  We do this with a view to seeing how the business models explored above might fit with the needs of our sector, explored above in Part 4 of this series.

As a reminder, in above sections, we explored:

Part 1: We’re Tiny. The tiny size of Australian creative industries

Part 2: New vs Old Paradigms

Part 3: Business Models for the New Paradigm

Part 4: Needs of the Australian creative industries with a focus upon the independent arts and cultural sector.

Part 5: How a ‘new paradigm’ business model might help Australian artists

Taking the business model of the Online Original Content Channel (OOCC) from Part 3, we look now to see how this might look in the context of the Australian arts and cultural sector.

A proposed Arts OOCC similar to other OOCC's

A proposed Arts OOCC similar to other OOCC's

Diagram: Where an Online Original Content Channel for the arts would fit into the new paradigm ecosystem.

Above, we see the OOCC occupying the layer above the independent artists who now occupy the bottom layer in place of the YouTubers, or technically, alongside them.

The Australian Arts OOCC (purple lettering on the left) operates in a similar fashion to the OOCC entities we examined earlier – DanceOn and Geek & Sundry.  On the one hand, in the diagram below, it operates as a ‘digital layer’ above the artists that aggregates content from independent artists who occupy ‘sub-channels/programs’ as we saw on DanceOn and Geek & Sundry in Part 3 of this series.



On the other hand, in the diagram below, it may additionally have a digital production capability including studio space, permanent crew/staffing etc.  This would make it similar to the two OOCC’s we saw earlier.



Diagram: 1. Differentiated content model, like an OOCC. Artists and partners benefit from scale of digital production, output and distribution, so long as they collaborate to produce content within the NAOOCC's niche. Examples of niches that might be addressed include e.g. Indigenous Australian content, experimental and developmental content, multi-disciplinary, 

Digital output does not equate to artistic output

Note, the digital output onto the NAAOOCC does not have to be the artistic outcome for any underlying creative hub facility, per se.  Rather, the digital output is used in a way that suits the new paradigm – distribution and marketing of digital content (e.g. interviews with artists, retrospectives, podcasts, short ‘sizzle’ reels of music and/or dance). This raises awareness and interest, driving prospective audience/consumers to non-digitally replicable artwork e.g. live performances, digital media installations, exhibitions etc, that the artist can monetize on their own terms. It is envisioned that the artists collaborate with an on-site digital producer to determine the best type of digital content that will support the artist achieve sustainable practice in a manner suited to that artist.

Partnership Models

Partner organisations to the NAAOOCC could collaborate in one of three optimised ways:

  1. Differentiated Content – This is the model in the earlier diagram ("Diagram: Differentiated content model, like an OOCC"). Where the content fits into the NAAOOCC’s niche, the content can be placed on the NAAOOCC’s own digital content aggregator channel e.g. ‘The Multi-disciplinary Art Channel’, ‘The Indigenous Australian Art Channel’, etc. If the niche content falls outside the NAAOOCC’s niche, this is an opportunity for a new, separate niche OOCC e.g. A disability arts channel.

  2. Undifferentiated Content – Where the content produced is undifferentiated the optimization strategy tends towards the Multi-Channel Network (MCN) model described in Part 3 (e.g. similar to the Channel Frederator Network MCN). See diagram below.

  3. Hybrid model - There is also potential for a third model, where the NAAOOCC has a service arm for partners and clients to create digital content more suited to the client e.g. a festival, a corporation, a funding body’s broader remit, etc. The revenues generated from this service facility help sustain an entity like the Niche Australian Arts OOCC, as well as providing alternative income streams for artists and creatives in the space.

Undifferentiated 'Multi-Channel Network' model

Undifferentiated 'Multi-Channel Network' model

Diagram above: 2. Undifferentiated Content model, similar to a the 'Multi-Channel Network' (MCN) example described in Part 3 of this series.

This model uses aspects of both the differentiated model and the undifferentiated model

This model uses aspects of both the differentiated model and the undifferentiated model

Diagram above: 3. Hybrid Content Model. The OOCC remains niche, but provides services to partners who may wish to create undifferentiated content e.g. advertising for their own organisation, policy need, etc.

Discussion for deciding between new paradigm business models – Niche OOCC vs Undifferentiated MCN

Strengths and weaknesses of the different models

  1. Differentiated Content Model

Pro: Achieves ‘cut through’ in the crowded content ecosystem (See ‘Example: Importance of the niche strategy’ below)

Pro: Offers more aggregation benefits for content that falls within its niche

Pro: Suits funders addressing a niche area such as a policy gap area, e.g. diversity, experimental work


Con: Requires content made and aggregated to be in the same content niche, reducing the potential for partner collaboration

Con: Reduced size of aggregation benefits across some aggregation categories

2. Undifferentiated Content Model

Pro: Increased size of aggregation benefits across some aggregation categories

Pro: Allows more diverse collaboration partners

Pro: Suits funders with broad (undifferentiated) funding priorities


Con: Offers less ‘cut through’ in the crowded content ecosystem

Con: Offers fewer aggregation benefits for (undifferentiated) content on it

The above strengths and weaknesses are roughly indicative.  For example, one may find that the overall benefits of ‘cut-through’ of an MCN exceed those of an OOCC even for differentiated content if the size of the MCN is large enough and efficient enough in passing on scale benefits.

Example: Importance of the niche strategy

As a quick (and by no means conclusive) demonstration of the importance of a niche strategy let’s look at the two OOCC’s we saw earlier in Part 3: DanceOn and Geek & Sundry.   Both of these OOCC’s started around the same time and received the same funding from YouTube’s Original Content Initiative.  To recap, ‘DanceOn’ is a channel that provides popular dance music and purports to find new ‘up-and-coming’ talent. Supported by the likes of Madonna and other high-profile music stars, it came with clear mass market appeal.

Left: DanceOn has content of broad appeal. Right: Geek & Sundry has content of niche appeal

Left: DanceOn has content of broad appeal. Right: Geek & Sundry has content of niche appeal

Diagram: OOCC’s with different levels of differentiation

The other OOCC is ‘Geek and Sundry’, which is very much about what it says it’s about – a collection of nerdy/geeky content. Suffice to say, Geek & Sundry is definitely occupying a narrower niche. How many people like popular dance music compared to … errr … Dungeons & Dragons?  Obviously, a lot more people like popular dance music – otherwise it wouldn’t be ‘popular’.  Here’s where it gets interesting ….

DanceOn subscribers vs Geek & Sundry subscribers

DanceOn subscribers vs Geek & Sundry subscribers

Diagram: DanceOn subscriber numbers (1.3M) vs Geek & Sundry subscribers (1.7M)

One might expect the OOCC with the more popular content to be way ahead:  Both organisations  were created as part of the now defunct YouTube Original Channel Initiative. This means both organisations are of similar age and had received the same resources - advanced payment of US$1 million by YouTube “against future advertising revenue to jumpstart production”.

Instead, the opposite is true (although again, not definitively so):  DanceOn has 1.3M subscribers at the time of writing, compared to 1.7M subscribers for Geek & Sundry.


I speculate that what is happening is that, in the new media paradigm, it is not simply about size of demand, but also about the size of supply. Unlike broadcast media, the Internet is good at finding content to match more niche tastes.  On the flipside, the Internet has an abundance of popular dance music content. Go to any online media splash page and you will find similar images to that of DanceOn. This may be what keeps subscriber levels below that of a true niche offering, like Geek & Sundry. Fans of things geeky have less choice for finding content providers of their niche tastes, consequently, the niche geek channel gets more subscribers than the pop dance video channel.

We speculate that areas of market failure in the cultural economy may represent opportunities for a niche OOCC should government choose to fund that gap.  Market failure, for example in providing affordable experimental and developmental space for artists, represents a barrier to entry. Already in screen, we have seen two products with strong female lead casts get picked up overseas, namely Wentworth, and Mrs Fisher’s Murder Mysteries.  With Screen Australia and other state agencies funding the gender gap, content can be made that fills an under-served market for strong female leads.

The David versus Goliath battle faced by Australian creative industries and what they might do to win (Part 3: New Media Business Models)

In this section, we will look at some examples of ‘New Media’ business models that are being employed to harness the Internet to allow scale for small creative businesses. This is the third of a series of blogposts that examines ramifications of the small size of most Australia creative businesses and explores strategies for resolving issues raised here.

In the previous blogs, we explored:

Part 1: We’re Tiny. The tiny size of Australian creative industries

Part 2: New vs Old Paradigms

In future blogs, we will look at:

Part 4: Australian creative economy needs, especially those in the arts and cultural sector

Part 5: How a new media model solution might look in the arts and cultural sector

Part 3: New Media Business Models

Business Models for the Small Creative Business in the New Media Paradigm

But what business models are the small content creators – similar to our independent artists and small arts organisations – employing to survive?

The sector saw a 'hollowing' out of the middle tier

The sector saw a 'hollowing' out of the middle tier

Diagram above: Old vs New Paradigm. What is happening down in the bottom right, between the independent creators and ‘middle-tier’?

Before we answer this question, we need to take a closer look at what’s happening in that gap between the middle tier and the bottom.

Independent (micro) screen content creators now

Independent (micro) screen content creators now

Diagram above: Virtually anyone can post content to the Web now. A few may make a living from it. A small percentage of YouTubers generate an income from their YouTube channels.

At the bottom of the above diagram, we see very few people make a viable living from their content.  This is not new.   Very few people as a percentage of the population ever made a living from the traditional TV/Film industries.  What is more, these YouTube content creators experience much greater creative freedom in what they do and create than most of the traditional TV/Film industry workers who tended to be crew, or producers making content for a broader mainstream audience e.g. broadcast content, international film productions.  In fact, we argue that finding one’s ‘authentic voice’ (an artist’s unique selling point, or USP, if you like) is imperative to the small, online, content creator.

Still, it’s undoubtedly difficult for individual content makers to make a living from an aggregator like YouTube. Successful YouTubers generally require investing 50 to 60 hours a week on content production, and even then, it usually takes years to build a subscriber base (‘audience’) sufficient to make a living.

Their problem, as it is in the independent arts scene, is one of scale.  It takes them so long to make content that they have little time to spend on other monetization activities such as merchandizing, spin-off services (e.g. consulting) and experiential content (live, ticketed performances), or other audience development work e.g. marketing, conference attendance etc.  They frequently also need to focus upon just one aggregator or platform (in this case, YouTube) to create enough scale to draw an audience.  This makes financial sustainability ever harder for the independent as others flood in due to low barriers to entry, and also very vulnerable to the platform on which they choose to concentrate their activity (to achieve ‘cut-through’ amongst the noise).  We saw this recently with the ‘Ad-pocalypse’ decimating YouTube ad revenues and that of YouTubers who had chosen to monetize their content through YouTube.

What has the market done to find solutions to this problem of scale in the new paradigm?

The answer lies in two overlapping business models:

1) The Multi-Channel Network (or MCN) and

2) The Online Original Content Channel (OOCC).

Multi-Channel Networks and Original Content Channels

New business models have emerged to solve the problem of scale for independent screen content creators, especially YouTubers.

New business models have emerged to solve the problem of scale for independent screen content creators, especially YouTubers.

Diagram above: Where new screen business models fit in the new ecosystem. Notice how they occupy a new 'lower-middle' tier between the old paradigm 'middle' (e.g. broadcast networks, national newspapers) and the bottom.

Two business models have emerged to offer scale to YouTubers: Multi-Channel Networks (MCN) and Online Original Content Channels (OOCC)

Two business models have emerged to offer scale to YouTubers: Multi-Channel Networks (MCN) and Online Original Content Channels (OOCC)

Image above: On the left, the Multi-Channel Network. On the right, the Online Original Content Channel

Note these definitions are not precise as the sector is undergoing disruption and transformation.  In fact, the Online Original Content Channel is my own name and definition for one of the new business models. For the time being, let’s outline the two different approaches:

1) Multi-Channel Networks (or MCN’s)

The first – MCN’s – aim to provide marketing and advocacy scale, whilst generally not becoming involved in content production. i.e. They have no ‘skin in the game’.

A good example of an MCN operating in this mould is The Channel Frederator Network:

Note the splash page of the Channel Frederator Network’s (in the above diagram on the left).  It emphasises the big numbers it attracts – without even a reference to the type of content on its site.

Its business model is one of undifferentiated content aggregation.

2) Online Original Content Channels (OOCC’s)

OOCC’s on the other hand, do create their own content, or at the very least, seek to contribute to the production of the content and curateit, by offering economies of scale in things such as, production crew, social media campaign managers, booking agents, studio facilities etc.  Whilst an MCN as large as the Channel Frederator Network (above) might also offer these things, the OOCC seeks to aggregate and offer scale in a niche.

Note this latter model differs from the YouTube Spaces model in that the OOCC is not simply a ‘neutral’ or ‘objective’ provider of resources on plainly economically rational grounds.  Whilst an OOCC may, of course, measure its ‘sub-channel’ content according to rational measures, it bears substantially more risk than YouTube or an MCN does by investing in the content production.  YouTube Spaces is like a ‘macro’ model of an OOCC, with YouTube benefitting overall from the improvement in production values and capabilities of videos posted on its site. Because YouTube owns the aggregation site, it does not need to differentiate in content.  MCN’s are like ‘mini’ YouTube Spaces.

OOCC’s, on the other hand, almost always pursue a niche strategy. As we described in Part 1 of this blog series, niche strategies are important to survive if you are a small plant or animal in the big jungle.  It is the orthodox business strategy for small players within and outside the creative sector:  Where competition is fierce, and you are small, you must make sure what you do provides unique value in that ecosystem, or you will quickly find your margins eroded by another competitor e.g. a competitor from a country where costs are lower e.g. India, Nigeria, China etc.  We describe more on the niche strategy below as it applies to two different OOCC’s in Part 5, ‘Example: The importance of niche’.

What does an OOCC look like?

Starting from the outside looking in, generally, an OOCC will occupy multiple platforms and aggregators (e.g. website, iOS, Twitch, Facebook Live, YouTube, podcasts, etc) to maximise distribution of its content – one of its advantages over a small YouTube operation.  Within an aggregator, such as YouTube, the OOCC will have many ‘sub-channels’, visible on its ‘Playlist’ tab (right hand side of the screen shot below).

OOCC's tend to occupy multiple aggregators and platforms. They can have sub-channels or 'programs' under their banner.

OOCC's tend to occupy multiple aggregators and platforms. They can have sub-channels or 'programs' under their banner.

Images above: What an OOCC looks like from the outside. Top: Home page on the web of an OOCC. Bottom left: Splash page for the OOCC on YouTube. Bottom right: The OOCC’s sub-channel menu with each of the images representing a sub-channel of content, like a television program on television.

What do they look like from the inside? Here we’re going to focus on the OOCC called Geek & Sundry. Some features to note:

The content is produced in the studio of the OOCC using (initially) the OOCC’s generic set, production crew (producer, camera, audio and social media manager). One might wonder how they can afford the staff and crew.  The answer is that these same crew and resources are scaled across the large number of sub-channels (see the above diagram in the bottom right image), likely using the same crews and resources across different sub-channel productions. ‘Sub-channels’ are defined here as channels of content that have been curated by the OOCC and exist under the banner of the main online channel – here, a YouTube channel. Similarly, the sub-channel might exist on the OOCC’s website under a separate tab or link.

So what are the consequences of this scaled approach at the micro-level? In the next few diagrams we’ll look at one of the sub-channels – Critical Role (which exists on the OOCC, Geek and Sundry) – and watch how it benefits from scale, starting from its humble start as a very bare-bones production.  Later, we’ll compare it to an unscaled YouTube sub-channel, and also compare it to an unscaled artist or arts organisation approach.

Each sub-channel or program can share resources from the OOCC

Each sub-channel or program can share resources from the OOCC

Example: Critical Role Sub-Channel. Critical Role is a sub-channel on the Geek & Sundry OOCC. Note, the Geek & Sundry logo appears on the bottom right of the screen, visible in the images at the top left, top right and bottom right.

The Benefits of Scale for an OOCC

The first thing to note below is the title sequence of the same sub-channel at different times in its journey: For Episode 1, there is no visual title sequence – just voice over. After approximately 40 episodes we can see elaborate make-up, wardrobe, CGI, location shoot etc.

Production values can increase as the program earns it

Production values can increase as the program earns it

Diagram above: The first episode title sequence is nothing but a blurred screen with voice-over. By episode 40, the program/sub-channel has earned enough subscribers, monetisation or engagement (the OOCC sets the Key Performance Indicator) to afford a video production with CGI (provided by a sponsor), make-up/wardrobe and a location shoot.

As the sub-channel grows, it has attracted more sponsors. Note below the hand-drawn diagram/map in the left picture compared to the ornate models and figurines being used on the right. These products have been provided by sponsors, demonstrating one of the advantages of scale (and success).

Sponsors find ways of supporting the program

Sponsors find ways of supporting the program

Diagram above: Product placement advantage for an OOCC sub-channel. On the left props and set are generic or cheaply drawn. On the right, as the sub-channel grows, it attracts sponsors, in this case, figurines and elaborate models.

Also note above, the use of the OOCC’s generic set in the early episodes has been replaced by a customised set build as the sub-channel has earned the resource allocation through subscriber growth and views. Note too, some of the talent are wearing t-shirts and other paraphernalia branded for the sub-channel.  They are able to produce, promote and sell merchandise and promote sponsors much more easily due to their scale, probably through a dedicated sponsorship manager and/or online community manager. In the first instance though, before the sub-channel has proven itself, the online community and campaign manager was probably the producer and their (the talent’s) own efforts, as with a normal unscaled Youtuber’s channel.

Comparison of a scaled OOCC sub-channel versus an unscaled OOCC sub-channel

Now we compare an unscaled OOCC sub-channel (below image, on the left) to the scaled sub-channel (below image, on the right, which is still the Critical Role example from before). Although the lone YouTuber on the left has strong graphic and video production skills (he came from the video production industry) – possibly even better than for the ‘Critical Role’ sub-channel - he cannot beat the better production values over time or the access to a wider talent pool.

Left: Typical unscaled (successful) YouTuber. Right: Scaled YouTube operation

Left: Typical unscaled (successful) YouTuber. Right: Scaled YouTube operation

Diagram: Comparison of unscaled sub-channel versus a scaled sub-channel

In fact, we are also seeing another benefit of the scaled operation.  In the above example, the OOCC was using the popularity of one sub-channel to cross-promote and publicize the launch of what would become a new sub-channel on the OOCC: D&Diesel.

Audience engagement and development

In the image below, on the left, the lone (‘unscaled’) YouTuber is able to gather his friends together for a livestream with his audience. In the image below, on the right, a professional ‘gig booker’ has taken the Critical Role talent around the United States before live audiences of hundreds, sometimes thousands.  These are opportunities to either further monetize e.g. paid tickets, or develop new audience and engage more deeply with existing audience.

Left: Unscaled operation uses home webcam and lounge room Right: A professional gig-booker provided by the OOCC has booked gigs before large audiences

Left: Unscaled operation uses home webcam and lounge room Right: A professional gig-booker provided by the OOCC has booked gigs before large audiences

Diagram above: The scaled program on the right is before an audience of hundreds. This audience can be monetised (selling tickets to the event - a live-before-an-audience performance of what the program streams) or used to build audience and deepen engagement.

Comparison of Spin-off IP monetization

Below, both the sub-channels being compared have ‘spin-off’ intellectual property (IP) they wish to monetize. The ‘Z-Land’ content from the unscaled OOCC is based on their original IP for a new game system.  But with viewer numbers only in the dozens, it is probably not selling anywhere near as well as the IP generated by the other ‘scaled’ sub-channel, Critical Role.

Below, one of the talents on the ‘Critical Role’ show, the Chronicles of Exandria, due to its audience of millions: (and also likely due to the fact that the critical role IP to serve an already well-known IP asset, Dungeons & Dragons).

Left: The unscaled channel's crowd-funding program raises c.$8K Right: The scaled program has a subscription base of 1.7 million from the OOCC from which to help monetise.

Left: The unscaled channel's crowd-funding program raises c.$8K Right: The scaled program has a subscription base of 1.7 million from the OOCC from which to help monetise.

Diagram above: Comparison of spin-off IP monetization capabilities between unscaled sub-channel and scaled sub-channel

Monetization ratios

A key performance indicator (KPI) to examine is the comparison between monetization ratios of scaled OOCC operations and unscaled OOCC’s.

Much higher monetisation ratios are likely for a scaled OOCC than an unscaled YouTube channel

Much higher monetisation ratios are likely for a scaled OOCC than an unscaled YouTube channel

Image: Comparison of monetization ratios between unscaled sub-channel and scaled sub-channel. Very rough estimates for monetization per YouTube subscriber.

Unfortunately, this is a difficult exercise from where we stand.  It is difficult to specify precise monetization ratios for YouTube channels because:-

1) It is a confidential stipulation of YouTube that content creators using its services not disclose monetization rates

2) The KPI monetized by YouTube is the amount/duration of ads viewed by viewers (‘Clicks per 1000 views’ or CPM). This will vary even within a YouTuber’s own channel as content length and type may vary

3) Many OOCC’s are privately held and keep data to themselves

BYP Group estimates - very roughly - that the average successful YouTuber (say, >10,000 subscribers – it’s what YouTube itself uses as a gauge for access to resources at its YouTube Spaces) monetizes at a ratio of around $0.33c per subscriber from YouTube ad revenue alone (the YouTuber gets 45%, and YouTube keeps 55%).  If they actively undertake activities such as merchandising and spin-off services, they may reach $1 per subscriber and possibly higher.  For reasons of scale mentioned above, we suspect few lone YouTubers ever achieve this higher threshold.

A scaled OOCC is likely to generate a much better monetization ratio.  To put that in context, recall Geek & Sundry had 1.7 million (now nearly 1.8M) subscribers.  We roughly estimate G&S’s revenue is around $8-17 million p.a.

In the next section, we examine the needs of the Australian creative industries, with a particular emphasis on the arts and cultural sector. We do this with a view to seeing how the business models explored above might fit with the needs of our sector.

The David versus Goliath battle faced by Australian creative industries and what they might do to win (Part 2: Old vs New Paradigm)

In this section, we look at the impact of the digital disruption and implications it has for the creative sectors.

This is the second of a series of blogposts examining ramifications of the small size of most Australia creative businesses and exploring strategies for resolving issues raised here.

In the previous blog, we explored:

Part 1: We’re Tiny. The tiny size of Australian creative industries

In future blogs, we will look at:

Part 3: New media models for harnessing the Internet to create scale for creatives

Part 4: Australian creative economy needs, especially those in the arts and cultural sector

Part 5: How a new media model solution might look in the arts and cultural sector

Part 2: Old vs New Paradigm

The advent of the Internet saw a paradigm shift in media that the World economy is still working through.  Broadly known as ‘Disruption’, we went from a world of content scarcity (Anyone remember having only one TV channel in Wollongong?), and difficulty in distribution (e.g. newsagents and video rental stores), to almost the opposite.

Media: The Canary in the Coalmine of Disruption

To begin with, we will look to the world of media, because these are the industries that were first to feel the effects of disruption caused by the Internet.  Consequently, many of these industries have had more time to develop responses to the new paradigm – or even more interestingly – have started their business model with the Internet in mind – so-called ‘digital natives’.

We argue these ‘new media’ businesses are better designed to leverage the strengths and minimize the weaknesses of the digital disruption.  These developments in the media industry have ramifications for our later discussion considering many artists and creatives receive most of their income either employed by the media industries, or ‘embedded’ in other industries employing new media techniques.

The sector saw a 'hollowing' out of the middle tier

The sector saw a 'hollowing' out of the middle tier

Diagram 1(above): Old vs New Paradigm. The sector saw a ‘hollowing’ out of the middle tier.

Many media forms saw a ‘hollowing out’ of the ecosystem, e.g. print publishing saw national newspapers (e.g. Fairfax Media) eroded by a handful of larger international papers (e.g. NYT, Guardian) and new paradigm media outlets (e.g. Buzzfeed) towards the top. Broadcast television saw plummeting profits in the commercial networks leading to the acquisition of Network Ten by a large, foreign media company, CBS. Computer games saw ‘mid-sized’ firms like local companies Blue Tongue and Team Bondi displaced by only the very large content aggregators such as Zynga, Steam or ‘AAA’ developers such as Rockstar Games (e.g. Grand Theft Auto), and replaced by smaller games companies who had success in the new paradigm such as local firms Hipster Whale (Crossy Road) and Half Brick (Fruit Ninja) with much lower production-value games.

Differences in the impact of disruption upon different creative sectors

It is important to acknowledge that each of the media industries has experienced disruption in slightly different ways.  The recording industry experienced years of eroding revenues before recently having renewed success with the subscription model e.g. Spotify and Apple iTunes.  Likewise, the book publishing industry were successful in litigating, with the result being that the aggregator, Amazon, maintains high prices for digital books.  Interestingly, Amazon still wins from this, as it is the main aggregator for books.  Where it loses is that it is more restricted in accelerating the popularity of books in digital form.

In both cases, the respective ‘old paradigm’ media powers were able to successfully leverage intellectual property (IP) laws.  This is not surprising as IP laws came about to protect powerful interests that were wealthy enough to own the production (or the means of putting things into 'producible form') e.g. Emperors of China – China had invented the printing press prior to the 8thcentury CE and quickly saw imperial decrees similar to modern copyright laws; and later in the West, industrialists who had sufficient capital to invest in printing machinery.

Changes to the Screen Sector

For the purposes of this series, we will focus upon the screen sector due to its interesting parallels to the arts and cultural sector in Australia.

In screen, we’ve seen the top filled by aggregators such as Netflix, YouTube and ‘orthogonal’ businesses such as Facebook and Amazon. At the bottom end of the content production spectrum we see individual YouTubers posting millions of hours of content a month – frequently people sitting in front of their ‘face-cam’ on their desktop computer at home or shooting from their mobile phone.

At the ‘bottom end’ of content, where production values are cheap and barriers to entry are low, the viewer is now inundated with so much content, the power has shifted. No longer is it with the distributor – e.g. the broadcast networks, newspaper publishers and their newsagents - the power now actually goes to the organisation that can sift through all the content and find relevant content to the viewer’s tastes – e.g. Google/YouTube search, the App Store (arguably a ‘platform’), Facebook. The new ‘large’ players are the aggregators – by aggregating content, they become desirable to the audience/consumer, in turn becoming more desirable to the content creator who then places more content on the aggregator, the audience turns to the aggregator ‘where all the content is’, and so on and so on, in a ‘flywheel’ effect dubbed ‘Aggregation’ (sometimes known as ‘the network effect’).

Content scarcity now only exists in the screen sector at the top end of production values and quality, like Game of Thrones, House of Cards, etc where the makers of the content can be ensured there are restrictions to distribution. In this context, large content providers like Disney and HBO are similar to large book publishers in the old paradigm and new paradigm ‘aggregators’ like Netflix analogous to Amazon's book store.

One should note too that the screen content has to be so compelling the audience is willing to pay a price for access to it, for example, by subscribing to a Subscription Video on-demand service (SVOD).

It is interesting to note that Disney – formerly a content maker and ‘old world’ distributor (to cinemas, TV etc) - has recently decided to ‘pivot’ from being a content creator to moving up the supply chain to becoming a content aggregator.  Disney’s CEO Bob Iger recently flagged they are to start a subscription video service in 2019.

In the next part (Part 3) of our series, we examine what is happening in the screen sector at the bottom end of content production with a view to drawing insights that may inform Australian creative industries who have similar economic properties of being small in scale.

The David versus Goliath battle faced by Australian creative industries and what they might do to win (Part 1: We’re tiny!)

Recently, BYP Group came across a statistic:  Ninety-nine percent (99%) of NSW creative businesses are freelancers and small businesses.[i]  An overwhelming majority of these small businesses had fewer than 5 or 6 employees. This is the first part in a series that will examine some of the ramifications of this and explore strategies for resolving issues caused by this widespread lack of scale.

In future blogs, we will look at:

Part 2: The impact and implications Disruption has for the creative sector

Part 3: New media models for harnessing the Internet to create scale for creatives

Part 4: Australian creative economy needs, especially those in the arts and cultural sector

Part 5: How a new media model solution might look in the arts and cultural sector


Key Points

  • Australian creative industries (CI’s), artists and arts organisations are predominantly very small

  • Being small, most should concentrate on niche strategies and/or strategies that offer them the benefits of scale

  • Disruption has changed the media landscape with implications for the small CI or artist

  • This ‘new paradigm’ has created new business models to achieve scale for independent screen creators or ‘YouTubers’

  • These new business models also address many of the needs of independent Australian artists

  • We explore two business models, the Multi-Channel Network (MCN) and the Online Original Content Channel (OOCC) and imagine how they might apply to the Australian arts and cultural community



Part 1: We’re tiny!


There are several inferences we draw from the preponderance of micro-businesses in the NSW creative industries:

  1. The rest of the Australian CI’s are similarly small

  2. Australian creative industries (CI’s) predominantly exist in a ‘gig economy’

  3. Australian CI’s are likely to face problems of ‘scale’

  4. Conventional business strategy for dealing with being small is to ‘go niche’

  5. Australian CI’s will need to think hard about their unique selling points (USP’s) to compete


  1. The rest of the Australian CI’s are similarly small

We will infer that the rest of the Australian CI’s are similarly small, and where they are not, they are likely to soon follow.  This is a common trend for the larger centres of a sector to lead trends across the sector.

  1. Australian CI’s predominantly exist in a ‘gig economy’

With the overwhelming proportion of Australian CI’s being freelancers or micro-businesses (below 6 people), it is safe to assume that Australia has an agile creative workforce, responsive to the needs of the economy.  One suspects too, that many are ‘tele-commuting’ from outside of the expensive Australian capital cities.  The Illawarra (roughly 1.5hrs south of Sydney), Blue Mountains and Central Coast regions all experienced a rapid jump in creative roles between the 2011 and 2016 censuses.

One potential negative of this ‘gig economy’ (and there are several) is the volatility in workflow this can cause, and lost efficiency in needing to spend much of one’s time winning business.  At BYP Group we are very familiar with this issue…

  1. Australian CI’s are likely to face problems of scale

The above issue is essentially a problem of scale.  ‘Scale’ is short for ‘economies of scale’.  For those not familiar with the term, it means the efficiencies and cost-savings gained by being larger.  For example, if you are a lone freelancer designer and you need a large format printer, a lot of its time is spent idle.  More can be gained from that asset if it were used more, e.g. by others in your business, or businesses nearby like in a shared workspace, perhaps reducing the price of access to the printer.

The problem of scale is not unique to Australian CI’s.  Australian businesses in general, except perhaps in mining, banking and superannuation, frequently have difficulty competing internationally because they are so small and have reduced efficiency and competitiveness across several fronts.

  1. Conventional business strategy for dealing with being small is to ‘go niche’

The conventional business strategy to deal with this issue is to focus upon a niche.  If you are not in a niche, there will be many competitors who will outbid each other on cost in a ‘race to the bottom’.  The people that win these types of races are those with the lowest costs.  In the creative industries, the main costs are generally labour and office space.  Being in a niche means you can avoid this issue by competing on a narrower front.

  1. Australian CI’s will need to think hard about their unique selling points (USP’s) to compete

However, being in a niche means you have to truly understand what it is that makes you different in a way that is meaningful to the marketplace (your audience, viewers, patrons or consumers) – i.e. something the market is willing to pay for (thus the ‘S’ for ‘selling’).  Marketers have long worked out that the thing to try to identify is what makes your business truly unique, such that your market cannot go anywhere else to get what you offer.

One traditional problem with the niche has been that, frequently, the niche is too small to provide a living to the creator.  You make the best silver and orange toed socks for ferrets in the world?  It’s just a shame that it has a market of only 30 people in the country.

Of course, the Internet has revolutionised things in two important ways:

  1. The Internet is international, expanding the potential market for the niche creative content, making many more niches viable for creators.

  2. Through improving communications between buyer and seller, reducing costs of distribution and replication (especially of digital goods), the world has gone from one of relative scarcity, to one of relative abundance (at least in First World Nations), especially for goods that are not differentiated. (There’s that idea again – ‘different’).


With the above points in mind, in subsequent sections, we will look at:



[i]BYP Group estimates based on ABS Counts of Australian Businesses, including Entries and Exits, Jun 2012 to Jun 2016.


Reference vehicles and calculations for my 'Apple Car' model

Below are some of the cars I have used to inform my speculations on the size, shape and characteristics (performance and 'smart' technologies) of the Apple Car.  I have also included the scale calculations for the models I used in my earlier piece.  Together, this data informs my reasoning in the articles posted here and here. Toyota i-Road Concept Car

Toyota has not released full specifications on this vehicle, but they have allowed several test drives mainly for the automotive media since the 2013 Geneva Motor Show.

Toyota i-Road demonstrating 'active lean' technology

Development status: Working concept car

Length: 2,345 mm

Width: 870 mm

Height: 1,455 mm

Wheel base: 1,695 mm

Tire size: (Front)80/90-16 (Rear)120/90-10

Minimum turning radius: 3.0 m

Occupancy: Japan:1   Europe:2 *1

Curb weight: 300 kg *2

Powertrain: 2 electric motors

Maximum speed: Japan: 60km/h   Europe: 45km/h *1

Cruising range on a single charge: 50 km*3

Battery type: Lithium-ion

  • *1 In accordance with European regulations for vehicles in the i-Road's category
  • *2 Vehicle weight without occupants or cargo
  • *3 Target distance when traveling at a fixed speed of 30 km/h

Comments: The Toyota i-Road is the closest concept I have seen to what I think the Apple Car, or some other motorcar 'disruptor' will look like.  It is primarily designed for solo transport (but fits 2 at a pinch - an adult passenger can tuck behind the driver with knees akimbo).

To make this product more 'accessible' and 'desirable' I imagine Apple will seek to improve the following:

- Appearance of safety: Although the i-Road already has an airbag in its steering wheel, perception matters.  Perception of safety could be influenced perhaps by adding smoother curves and reinforcing around the side to bring it in line with nearly the thickness of a conventional car door - say 10cm.

- Convenience: A hidden issue with motorcycles, bicycles, electric bicycles, scooters etc is that they all require some degree of 'preparation' by the riders as well as on-going maintenance.  By 'preparation' I mean, for example, putting on protective equipment such as helmet, protective riding leathers, high visibility clothing, locking (e.g. to a nearby pole, as bicycle stands are relatively few and far between), charging, turning on/off safety equipment e.g. flashing lights, helmet storage, strapping of cargo/luggage.  By maintenance, motorcycles and bicycles require considerable maintenance relative to a car.  Taken together, these issues form a 'sub-conscious' impediment to many prospective users of those modes of transport.   A future micro-vehicle should be able to easily overcome these issues.

- Comfort (seating & ride): For a vehicle of this type to appeal to people of all ages and physical abilities, the seat would need to be softer and more 'plush' than the cheap, thin vinyl seats provided on the i-Road, though not as substantial and soft as a car seat.  Some suspension would also be expected.

- Comfort (noise levels): Some effort will go into sound suppression, although making it too quiet will make this vehicle dangerous to pedestrians.  Electric motors of the size used here tend to have a high-pitched whine which will be difficult to suppress in any case, although road noise could be reduced by more sound and temperature insulation.

- Comfort (protection from elements): Expect this to be high on an Apple Car's list.  A major inhibitor to people using motorcycles, scooters and bicycles more often is the level of physical comfort and protection from the elements.  To serve as a commuter vehicle, it must enable people to arrive at work without being sweaty, drenched, hot, cold or exhausted.

- Comfort (entertainment system, 'smart' technology):  This is a given in a proposed Apple Car, considering Apple's known foray with CarPlay and Apple Maps.  Ease of integration with Apple products and sophistication of smart technologies would be one of the key differentiators of an Apple Car to future competitors, such as the i-Road.

- Performance: For the vehicle to succeed in the First World markets, it would need to be more versatile than purely a 'last mile' commuter (e.g. to the shops and transport hub).  Rather, the vehicle should be able to be used on the highway 'at a pinch'.  Consequently, increasing top speed to 80-110km/h would be likely.  It is likely these performance improvements will be possible considering the 6-10 year span between the i-Road's debut at the 2013 Geneva Motor Show and the Apple Car's earliest launch date.

- Price: No price has been provided by Toyota, but a price under $10,000 has been suggested.  This would bring it in line with the critical threshold I believe it would need to achieve to provide a sufficient 'value proposition' in the mind of the consumer.


EO Smart Connecting Car 2

The EO smart connecting car 2

Technical Details


Size: 2.58 m x 1.57 m x 1.6 m; Or rather 1.81 m x 1.57 m x 2.25 m (The indication of the length of the vehicle depends on the type of tire / tyre section. The values have been recorded with tires of type 200/60 R 16 79V.)
Weight: 750 kg
Power supply: 54V – LiFePo4 battery
Speed: 65 km/h (40 mph)
Actuation/ Engine: 4 x 4kW wheelhub motors; 10 x longstroke-Lineardrive with 5000N 1 x Folding Servo
Sensors: Hall-effect as well as string potentiometer sensors for angle and length measurementStereo-Kameras at the front and at the back32-Line Lidar for 3D-scans of the environment6 ToF 3D cameras for near field overview
Communication: CAN-Bus RS232 RS485 LAN

Comment: The EO Smart Connecting Car demonstrates (or at least conjectures) the types of technologies that would be important in solving important 'jobs to be done' e.g. parking and traffic (through it's convoying/platooning idea).


General Motors EN-V 

One of the EN-V concept car variants



Jiao (Pride)        1,500 mm (L) x 1,425 mm (W) x 1,640 mm (H)        [59” x 56” x 64.5”]

Xiao (Laugh)      1,540 mm (L) x 1,420 mm (W) x 1,770 mm (H)        [60.5” x 56” x 69.5”] Miao (Magic)             1,520 mm (L) x 1,405 mm (W) x 1,635 mm (H)        [60” x 55” x 64.5”]

Overall Track:   1,150 mm [45”]


Jiao (Pride)             400 kg [880 lb]

Xiao (Laugh)           410 kg [900 lb]

Miao (Magic)          415 kg [910 lb]       

Chassis Platform      210 kg [460 lb]

Body Construction:           Painted carbon fiber

Closures:                 Front access (single door, with polycarbonate glazing)

Seating:                  2 passengers side by side, fixed bucket seats

Chassis Construction:      Magnesium casting (lower chassis)

Aluminum box (battery and gearbox housings)

Stainless steel (guide rails)

Wheels and Tires:              MC 120/70R17 on 17” x 4” wheels


Top Speed:                    40 km/h [25 mph]

Range:                     40 km [25 miles]

Energy Consumption:       70 Wh/km [125 Wh/mile]

Turning Radius:         1.74 m [68.5”] wall to wall diameter

Propulsion System

Motor Type:           Brushless DC motors for propulsion, braking and steering

Power:             440 Nm (max. torque) and 18 kW (max. power)

Battery Type:        Lithium-ion phosphate (air cooled)  

Output:              3.2 kWh and 5 kW (regenerative braking)

Autonomous Systems

Sensors:         Vision, ultrasonic and Doppler sensors

Wireless:          5.9 GHz dedicated short-range communication and GPS

Autonomous Functionality

-       Automated retrieval, via app-linked smart phone

-       Automated door opening, via app-linked smart phone

-       Platooning

-       Infotainment options (geo-locating other vehicles, audiovisual information)

-       Web-conferencing (social networking)

-       Collision avoidance between vehicles

-       Object detection

-       Automated parking, via handheld device


2016 Morgan EV3 specifications[1]

The Morgan EV3. Note, I think Apple would use a more conventional four-wheel layout should it attempt a micro-car.

Development status: Mooted for production some time this year. Debuted at 2016 Geneva Motorshow (early March 2016)

Year: 2016

Make: Morgan

Model: Three Wheeler

Horsepower @ RPM: 62 (46.2kW)

0-60 time: 9 sec.

Top Speed: 90 mph

Weight: <500kg

Passengers: 2 adults, side-by-side

Battery pack: 20kWh lithium battery

Range: 150 miles on a single charge (241km)


Price: (Estimated) US$38,375 to $42,640 (NB: Morgan is a ‘prestige’ car maker)


2013 Renault Twizy specifications[2]

The 2013 Renault Twizy. It has recently been suggested with two electric motor configurations.

Smart Fortwo electric. Note how heavy this is at over 800kg.


Development status: Concept car

Year: 2013

Make: Renault

Model: Twizy

Passengers: 1 adult

0-60 time: 6 sec.

Top Speed: 68 mph



2013 Smart Fortwo Electric Drive Specifications



Production status: In production since 2009 (2nd generation model)

Year: 2013

Make: Smart

Model: Fortwo

Price: € 18910

Engine: 55 kW

0-60 time: 11.5 sec.

Top Speed: 78 mph (125.5km/h)

Passengers: 2 adults, side-by-side

Specifications for the Smart Fortwo in non-electric configurations:

Production 2014–present
Body and chassis
Body style 3-door hatchback2-door cabriolet
Related                         Smart Forfour (C453)Renault Twingo
Engine                         0.9 L turbo I31.0 L petrol I3
Transmission 5-speed manualtwin clutch automated manual
Wheelbase 1,873 mm (73.7 in)
Length 2,695 mm (106.1 in)
Width 1,663 mm (65.5 in)
Height 1,555 mm (61.2 in)
Kerb weight 880 kg (1,940 lb)

Specifications from Wikipedia for 3rd generation Smart Fortwo electric engine:[3]

Power: peak power output of 55 kW (74 hp)[5][28]

Torque: 130 newton metres (96 lbf·ft)

Top speed of 125 km/h (78 mph)

0 to 100 km/h (0 to 60 mph) in 11.5[43] seconds and 0 to 60 km/h (0 to 37 mph) in 5 seconds

Battery capacity: 17.6 kW·h lithium-ion battery by Deutsche ACCUmotive[44]

Range: 145 km (90 mi)

Miles per gallon equivalent: 122 MPGe city, 93 MPGe highway, 107 MPGe combined[45]

Artificial warning sounds for pedestrians automatically activated in the U.S. and Japan, and manually activated in Europe.[46]


Kyburz eRod

Specifications (translated from the Kyburz website using Google Translate)

The Kyburz eRoad electric kit car

Weight: 570 kg (incl. Bat.) Battery: 18 kWh, 100 V / 180 Ah Power: 40 kW / 140 Nm Range: 100 - 130 km Drive: brushless AC motor on the rear axle Braking recuperation: switchable Helmet compulsory: No

Price: US$28,000 unassembled. US$38,000 assembled.

Comment: The eRod is almost twice the width and 25% longer than what I expect a future disruptive vehicle would look like.  However, it does have the tubular frame I anticipate will be key and helps illustrate the sparseness of the underlying chassis that the 'future car' might have as its underpinning.  Recall, Gordon Murray's 'iStream' car manufacturing methodology that seeks to scale the types of methods used in the manufacture of Formula 1 race cars.  Note, the weight would need to be significantly reduced (to about 2/3rds or 400kg) - probably through super-strong composites.  An enclosure for passengers is a given.


Specifications for Mini Cooper S

I used a Mini Cooper remote control car as a model for illustration purposes.  The Mini Cooper S has very similar dimensions, and they are provided here for reference.

Mini Cooper S

Production 2006–November 2013 (Hatch)2009–present (Convertible)
Assembly Plant Oxford, Cowley, England
Body and chassis
Class Supermini
Body style 3-door hatchback2-door convertible
Layout FF layout
Related Mini Coupé, Mini Countryman, Mini Clubman
Engine 1.4 L Prince I4 (One)1.6 L Prince/BMW N16 I4 (Cooper)1.6 L Prince turbo I4 (Cooper S)1.6 L Peugeot DV6 diesel I4 (Cooper D and One D)2.0 L BMW N47 diesel I4 (Cooper SD)
Transmission 6-speed, automatic or manual
Wheelbase 2,467 mm (97.1 in)
Length 2007–2010: 3,698 mm (145.6 in)2007–2010 S: 3,713 mm (146.2 in)2011–2014: 3,729 mm (146.8 in)
Width 1,684 mm (66.3 in)
Height 1,407 mm (55.4 in)
Kerb weight 1,150 kg (2,535 lb) (Cooper)1,210 kg (2,668 lb) (Cooper S)
Predecessor Mini (R50/53)
Successor Mini (F56)


Honda Accord dimensions:  The Honda Accord is used as an example of a typical 'family sedan'.

Honda Accord 2015. Our proxy for a 'typical family sedan'

Wheelbase Sedan: 2,776 mm (109.3 in)Coupe: 2,725 mm (107.3 in)
Length Sedan: 4,862 mm (191.4 in)Coupe: 4,806 mm (189.2 in)
Width Sedan: 1,849 mm (72.8 in)
Height Sedan: 1,466 mm (57.7 in)Coupe: 1,435 mm (56.5 in)
Curb weight 3,193 lb (1,448 kg) sedan[51]


Calculations from Mini Cooper remote controlled car model

Actual Mini Cooper S dimensions: 3.7m long, 1.68m wide, 1.4m high.

Mini Cooper remote control car model dimensions: 200mm long.

The remote control model Mini Cooper I used to give a sense of scale


Calculation of scale ratio:

(Actual length) 3700mm to (Model length) 200mm = 37:2 = 18.6:1 ratio.

Therefore width converts to: 90mm

Therefore height converts to: 76mm

Hence, the speculated dimensions of ‘future car’ converted to 18.6:1 ratio are:


Unscaled dimensions of the Apple Car:

Length: Approx 1.5 to 1.6m

Width: Approx 1m

Height: Approx 1.5 to 1.6m.

Scaled dimensions of the Apple Car:

Approximate Length: 81-86mm

Approximate Width: 54mm

Approximate Height: 81-86mm (can be lower, but it means for a very reclined seating position, possibly requiring seat adjustment technology)

Apple Car Model Dimensions used in photographs:

The roughly-to-scale Apple Car model we used.  Assembled from my 4 year old's Duplo.

Length: 96mm (1.79m)

Width: 58mm (1.08m)

Height: 72mm (1.34m)








Specifications of the Apple Car

In this piece I drill deeper into speculating what the Apple Car may be like, contemplating its likely specifications and performance characteristics, based upon existing cars. Following on from my piece that sought to describe the physical parameters of the Apple Car, in this piece I go one step further (too far?) and attempt to apply performance characteristics to the Apple Car. Using specifications from existing and upcoming micro-cars (REFERENCE LINK), I attempt to extrapolate the likely possible specifications for a future ‘disruptive’ micro-car[1], scheduled for 2019-21 release.[2] The existing micro-cars that I referred to, and their specifications can be found on the next blog post here.

For the purposes of our exercise, we anticipate that the future ‘disruptive’ vehicle will have the following characteristics:

Passengers: 1 adult (with some type of convoying technology required to link other cars of the same type, either ‘in-line’ or side-by-side.) In Australia research suggests that over 90% of trips only carry the driver.[3] But note, that percentage would count a trip to drop off the kids at school as 2 trips, with one of those trips, the return trip, likely to be only 1 passenger.]

Dimensions: Not much bigger than an electric wheelchair – perhaps slightly longer and wider for safety reasons and cargo capacity i.e. Length: Approx 1.5 to 1.6m; Width: Approx 1m: Height, Approx 1.35 to 1.6m (similar to a Mini, 1.4m, or ‘Smart Fortwo’, 1.56m)

Weight: Less than one quarter the weight of a conventional family sedan, or 300-450kg; Less is more due, to the weight of batteries. I anticipate it to use super-strong lightweight materials like carbon-fibre, perhaps custom-made for the ‘Apple Car’ similar to Gorilla Glass or the gold alloy used in the Apple Watch. Note, the Morgan EV3 is said to be less than 500kg and will be larger than this vehicle. I therefore anticipate it should be capable of reaching 2/3rds to 80% of its weight. However, it is also likely to have more ‘mod cons’ than the Morgan EV3 (e.g. a ‘hardtop’ roof; air conditioning; entertainment system; ‘smart’ technologies/sensors etc, which might take the weight from say, 400kg to 500kg.)

Engine: 30kW to 55kW (I anticipate it to be similar to the electric Smart Fortwo, or slightly less to give it similar performance but with lower weight.)   Weight calculation: [Est. 400kg + 100kg (large male) = ] 500kg vs [880kg +100kg (large male)] = 980kg. Consequently, I anticipate a 30kW engine could have the same performance specifications as the electric Smart Fortwo. Elsewhere I suggest that those performance characteristics are all that are needed.

Battery capacity: Approximately the same as for the Smart Fortwo i.e. 17.6 kW·h lithium-ion battery by Deutsche ACCUmotive[44]

Range: Approximately 200-300km. This should account for more than 95% of trips.[4] 145 km (90 mi) range is available from the electric Smart Fortwo. Note, the range could be much higher considering the anticipated reduced weight of the proposed Apple Car. Consequently, it may be possible to have a smaller battery, reducing weight considerably. I think the weight/battery/performance/range equation will be a very well optimized balance.

Top Speed: Not capable of doing much more than maximum speed limit in most Western Countries’ i.e. 125 km/h (78 mph). This is the top speed of the electric Smart Fortwo. This speed was chosen because Apple has a strong tradition of not competing in ‘specification wars’, eschewing adding specifications for the sake of them, and instead aiming for qualitative benchmarks. For example, its iPod was not the smallest music player, nor the music player with necessarily the largest memory. Instead it went for ease-of-use. Likewise, the Apple Car will not be built for the purposes of drag-racing conventional motor cars. It just needs to get the passenger/driver from A to B.

Price: Comfortably below multi-passenger micro-cars, with multiple Apple Cars being about the same as a mid-luxury family sedan (e.g. Honda Accord) i.e. Sub US$13,000. Preferably under US$7-10K. Note, because it’s only a single passenger vehicle it may need to be substantially cheaper than most of the two seaters to provide a convincing ‘value proposition’. This is also why the ‘convoying’/platooning capability described in the earlier article is so important. There may also be economic pressures for this vehicle to be a subscription vehicle or some other business model of usage/ownership. (See other article on ‘Thinking behind Apple Car speculation’). Most micro-cars are sub US$15,000. It may be possible to achieve price ranges below US$10K with sufficient economies of scale e.g. Dediu’s suggested ‘1 million car’ mark for an Apple Car to be ‘meaningful’.

Smart Technologies: Pontooning/convoying’ technology will be important to allow for the Apple Car to disrupt the family car. An example of this concept is given for the EO Smart Connecting Car 2.

The EO Smart Connecting Car 2 imagined in 'convoying' mode



[1] Due to the highly speculative nature of this article, I am attempting to cover my bases here. Perhaps if Apple doesn’t make this, someone else will???

[2] According to the Wall Street Journal (WSJ) the Apple Car is scheduled to be released in 2019. Dediu notes this usually means the product would be available to the public one year later (2020) at the earliest. More recently, Tim Cook, when asked about the Apple Car did not deny the rumour, but instead implied it was a lot further away than people were expecting, saying: ““Do you remember when you were a kid, and Christmas Eve, it was so exciting, you weren’t sure what was going to be downstairs? Well, it’s going to be Christmas Eve for a while.” Source:


[4] and

What will the Apple Car look like?

This article provides a playful look at what the Apple Car might look like. For the (slightly) more serious reasoning on how I came to the parameters of the possible Apple Car, please click here and for the performance characteristics click here. For the specifications of existing micro-cars I used as reference points to inform the parameters, please click here. Duplo model courtesy of my 4 year-old daughter

In this piece, I seek to flesh-out and illustrate the likely ‘envelope’ and specifications of the Apple Car. In an earlier post, I described the broad characteristics of what I imagined the Apple Car to look like, drawing upon the thinking of well-known Apple observer and analyst, Horace Dediu.

Primary Parameters for the Apple Car

Together, Dediu's criteria and my own reasoning pointed towards the primary characteristics relevant to visualizing and specifying the Apple Car as being:

  • A small vehicle, likely a ‘microcar’ or ‘autocycle’
  • It would fit only one or two people – we will assume one person here
  • It was a given that it would use a large amount of ‘smart’ technology e.g. autopilot, collision prevention, auto-balancing/leaning technology etc., but only that likely to be available at its speculated time of release in 2019-2021.
  • It would likely be electric
  • It would be unlikely to compete with the specifications of a conventional vehicle, making performance trade-offs to more specifically focus upon the job to be done (taking a person from ‘A’ to ‘B’)

Dimensions of the Apple Car

Consequently, I arrived at the following dimensions for the future Apple Car (assuming of course, one is ever made):

Length: From 1.2 to 1.6m long or comfortably less than half the length of the average modern family sedan[1]. An important criteria is that the vehicle can park ‘nose to kerb’ and not be wider than a conventional car.

Width: Approx. 1 metre; or more than half but less than 2/3rds the width of the average modern family sedan. This is to enable the division of the regulation traffic lane into two, hence potentially doubling the carrying capacity of existing infrastructure.

Top view of a scale Apple Car model to the Mini Cooper. Note: Four Apple Car’s could be linked together in a 2x2 pattern and be roughly the same width and length as a family sedan. No more arguments over air-conditioning temperatures!

Height: 1.35-1.6m or around 10-15cm less than the average modern family sedan. Note this dimension is one of the most constrained due to the assumption of a normal seating position. Going too far from a normal seated position risks alienating many people (the old, inflexible, tall, overweight, unfit, unusually proportioned etc). Historically, this is something Apple has sought to avoid.

Side-on view of a (roughly) scale Apple Car model to the Mini Cooper. Note, having owned a Mini Cooper, the seating is quite low. It will be difficult to push much below the 1.4m height of the Mini Cooper, unless the driver’s position is reclined steeply.

Figure 5. Rear view of the Apple Car model compared to a model Mini Cooper

[1] For comparison, the Honda Accord is 4.86m long. See the blog post here for the vehicles I have used for reference.

Marc Tarpenning 2013 talk – A summary of thoughts from Tesla Motor’s co-founder

As I have noted elsewhere in this blog, some in the car industry remain skeptical of Apple’s ability to make a great car. Their reasoning is essentially, since Apple has no history in making cars they can’t appreciate the difficulties in making a car. They are mainly software engineers and mobile phone engineers and won’t understand the important mechanical aspects and all other important things in making a great car. This 2013 talk by Marc Tarpenning, one of the co-founders of Tesla Motors, shows how a group of archetypal ‘Silicon Valley types’ did just that. Their cars have won many major car awards.[1] Some interesting thoughts and statistics from the talk:

- Why he formed Tesla Motors: Tarpenning sought to solve a large world problem.  As a firm believer in 'Peak Oil', he thought the electrification of cars would be a worthy problem to solve.  Noting the failure of earlier electric cars, he reasoned that one issue was the misdiagnosis of the true market for electric cars.  Rather than poor people seeking to save on petrol, the experience of the GM Volt and Toyota Prius was that the buyers were mostly wealthy people who were seeking a 'green' car as a type of status symbol.  Thus, he diagnosed the 'job to be done' as being to provide wealthy people with a 'green status symbol'.

- Efficiency/Sustainability of Electric Cars: Early on he answers the question 'Why electric cars?'. Answer: They are much more efficient than petrol. Interestingly, he calculated that even electric cars recharged by coal power plants are better than petrol in terms of efficiency of resource usage.

- Batteries are getting cheaper (and better): Batteries have gotten 7% cheaper every year for many years.   Near the end of his talk he also mentions this decline in price may accelerate due to the 'sheer amount of money they are putting into this thing.' By ‘thing’ he means, for example, the Tesla ‘Gigafactory’[2] and various other large manufacturing facilities that are starting around the World.

- Most car manufacturing is outsourced: In answer to the doubts about whether a newcomer can make a car, the obvious retort is that most of the car business as we know it today is outsourced.  What most car manufacturers actually do is just the internal combustion engine - thus the car company's internal vested interests and politics against electric. The car manufacturers have mostly outsourced the rest.  E.g. Transmission is outsourced.  Styling is frequently outsourced, I already knew things like brakes, suspension, electrical, entertainment systems etc, are outsourced.

- Incumbent car industry inertia - It's 'worse than he thought possible': In response to a question asking how quickly he thinks the incumbent car industry will adapt to change, he is quite clear.  He describes them being 'worse than he thought possible'.  He explains the internal politics that occurs within such incumbent car companies.  From the above point regarding outsourcing, we can see that all that remains of most incumbent car companies is the internal combustion engine engineers.  Tarpenning argues that the internal resistance comes from car companies belated realising they sacked the wrong people.  They got rid of their electrical engineers (through outsourcing), and now would have to admit they were wrong and rehire them.

- Battery companies reawakening by Tesla Motors: Battery companies such as Panasonic and Sony thought their addressable market was to sell 7 battery cells per person (e.g. one in the mobile phone, one in the tablet, etc etc). Tesla Motors advised them that their customers would need 7000 battery cells just for one Tesla car. What happened next is kind of funny.

- Tarpenning isn't always right: Tarpenning got the oil forecast wrong: He got the oil forecast wrong, saying we'd reached 'peak oil'.  The oil price plummeted below the US$60-70/barrel he said it cost to drag this stuff out of the ground. He did not anticipate that about 2 years later, OPEC would slash oil prices to drive out US CSG oil production. The move by OPEC also might be seen as a prescient move against the electrification of cars, which would severely reduce demand for oil. In the US, they use 28% of their energy to move people and goods.[3] Personal vehicles use 60% of that 28%, and buses and trains use 3% of that 28%.

- Where Tarpenning is putting his money: Note also where Tarpenning and his Tesla co-founder Martin Eberhard have invested their money – to an electric motorcycle maker called Alta Motors (formerly BRD Motorcycles) which they did in 2014 (Source:  Readers of this blog will already know that I believe disruption of the automotive industry will come from the ‘lower tiers’ of the personal transport vehicle, probably from a vehicle that the incumbents deride as not a threat. Of course, the more obvious play for Tarpenning and Eberhard is to simply do to the motorcycle industry what Tesla Motors did to the sports car industry. However, with the Redshift, released in October 2014,[4] carrying a 5.2kWh battery weighing 70 pounds (approx. 32kg), producing 40hp (roughly 30kW) we are talking about a power plant that is already capable of powering a ‘disruptive’ micro car at acceptable performance specifications as we have envisaged in other posts (e.g. top speed of 110km/h, range >150km etc). Their bikes sell at US$15,000 so we imagine that the greater economies of scale achieved by a consumer motorcar, when compared to a luxury sports bike, it would be possible to bring the price of a ‘future car’ below the critical US$10,000 mark.






The thinking behind my speculations on the Apple Car

This article gives you the details of my reasoning behind my predicted Apple Car.

The Thinking of Horace Dediu

The main analyst I refer to in this article is leading technology analyst, Horace Dediu. We cite materials predominantly from his two blogs and podcasts at Asymco ( and Asymcar ( Dediu, a former student of ‘disruption theory’ pioneer Clayton Christensen[13], and now a director at the eponymous Christensen Institute, focuses his analysis upon disruption using Apple as a lens for study and comparison.

Although Dediu has made no firm statement upon the actual shape or functionality of the Apple Car itself, Dediu is on record as believing it will be influenced by certain key criteria.  He looks particularly at Apple's past history and its key strategies that brought it success, as well as examining the history of the broader automotive industry itself to try to understand what these key criteria will be.

I go one step further and 'fill in the gaps' left by Dediu's criteria to give the reader a more tangible sense of the type of vehicle that Apple, or some other innovative companies, may seek to build if they were to start a car project from 'scratch' with a view to disrupting the incumbent automotive industry.

Apple’s track record in innovation – a late bloomer

From Apple, Dediu notes that what brings it success is not strictly 'disruption' in the sense defined by Clayton Christensen.  Disruption theory predicts the disrupting company generally starts with a 'lower-end' product that initially appears so insignificant to the incumbents that it is ignored.  Instead, Apple is rather distinctive in that it tends to make 'high-end' products.  Nevertheless, it has been seen since its inception, making what was a previously 'low-end' product category, better designed and more usable, charging a premium for superior execution.

Apple even goes so far as to enter a product category somewhat after a segment has gained traction, but nevertheless succeeds way beyond these pioneers despite their ‘first-mover’ advantage, through superior execution.

These differences in approach are important in understanding how Apple may execute on a future product. Below are examples of ‘the Apple way’.

The iPod and iPhone

The iPod and iPhone are excellent cases in point. The iPod was a late entrant into the digital music player business. Regardless, they became the number one selling digital music player through superior execution. Their big innovation for that device was to develop the digital ‘scroll wheel’ to allow easier use. Additionally they changed the way music was sold through the introduction of the iTunes Store a few months after the iPod’s launch.

in its time the Blackberry was nicknamed the 'Crackberry', so addictive was its appeal

Similarly with the iPhone, smartphones had achieved some market success by the early 2000’s with comparably sized smartphones being produced by Palm and Blackberry. It wasn’t until 2007 that Apple entered the smartphone race against the firmly entrenched Blackberry.[14] Apple famously did away with the tiny physical keyboards on these devices that many people struggled to use, and improved the touch screen experience compared to what was used on the Palm devices. Once again, Apple took an already established segment, improved the interface and opened up the market for smartphones to even more people.

Apple’s DNA: A tradition since inception

The original Apple computer. It was designed to easily port into a standard television screen.

So much is apparent from Apple’s recent history, but many may not have been around for its early history. However a brief examination of this early history shows the ‘DNA’ of the company emerged very quickly even during its start-up years. For example, the first Apple computer delivered a superior package to the numerous other start-up personal computer makers around at the time in the 1970’s, offering as it did, the first personal computer with an easy to read output (a 'monitor' or TV screen rather than punch cards in binary), and an easy-to-use input device - a QWERTY keyboard, making it immediately recognisable to a population familiar with mechanical typewriters.[15] At the time, these additions were considered revolutionary in a personal computer.Image 5. The first personal computer, the Altair 8800. Note its difficult to understand output ‘display’ and lack of easy data input.

The first personal computer. Note the lack of easy-to-read display output and easy-to-use input device like a keyboard.

A few years later, Apple went a step further with the Macintosh making the user interface even more user-friendly by introducing the graphical user interface and mouse which were developed at Xerox PARC and essentially given to them by an executive at the then dominant Xerox corporation.[16]  Clearly, that Xerox executive did not understand the value of his company's own research, but Jobs did, appreciating the ability of the technology to allow anyone to use a computer which had hitherto been amenable only through an inscrutable computer command line interface.[17]

The original Apple Macintosh that pioneered the widespread use of graphical interface and mouse in personal computing.

This is what computer interfaces looked like before the graphical user interface.

In this way, we see Apple, time and again, introduce a new product, which despite its lack of primacy into its segment, still competes with non-consumption.[18] i.e. People who had never purchased these product categories before, would buy one when the Apple version came out.

In the case of the iPhone, it created a market so strong that Apple could weather the 2008-9 GFC, recording stunning growth during that period.  By comparison, despite the far more benign conditions relative to the GFC, Apple CEO Tim Cook described the late 2015 quarter as 'the toughest he's seen for Apple' with their primary profit driver, the iPhone’s sales figures, receding in a year-on-year comparison. This reveals how much difference it is to compete in a rapidly saturating market, compared to the green fields of non-consumption.

Significant Contribution

The second factor Dediu refers to frequently is that Apple's track record and statements by its senior leadership strongly suggest that Apple would only enter into a new market, in this case, the car market, if it felt it could make a 'significant contribution'.  Tim Cook’s statement, taken from before he became CEO, and in response to the inevitable analyst question regarding ‘What will Apple become without Steve Jobs?’ is worth quoting in full (My emphasis added):

We believe that we are on the face of the earth to make great products and that’s not changing. We are constantly focusing on innovating. We believe in the simple not the complex. We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution. We believe in saying no to thousands of projects, so that we can really focus on the few that are truly important and meaningful to us. We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot. And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the self- honesty to admit when we’re wrong and the courage to change. And I think regardless of who is in what job those values are so embedded in this company that Apple will do extremely well.

- Tim Cook fielding analyst questions during 2009 Q1 earnings call

In his podcast entitled 'Meaningful', Dediu is on record as saying he feels this would mean that Apple is intent upon making an 'iconic car', in the vein of the Volkswagen Beetle, the Ford Model T, the Fiat 500, the Citroen 2CV, and the (original) Mini.  Considering the sales volumes of these cars, Dediu asserts that Apple intends to make a car that can sell in the millions, with a minimum goal of 1,000,000, although perhaps achieved over some years.

Image 8. The original ‘Mini’. Note its extremely compact size relative to other vehicles of the time (1959).

Image 9. A 1959 American contemporary of the original Mini.

External criteria – Changing the Means of Production

The third important criteria in understanding what the Apple Car would need to be, comes from an external factor – the history of the car industry itself.

Dediu argues that in automotive history, great changes have always come with the advent of a new means of production. He points out the three big changes of production in automotive history each brought their respective proponents to primacy.  For Ford, it was famously the assembly line for the Model T.  Ford was later overshadowed by General Motors, through a production method that allowed different plants to focus upon different components e.g. Engine, chassis, body, so that greater specialisation, efficiencies and variety of products could be accommodated.[21]  He believes this led to GM's ascendancy in the post-war period.[22]  More recently, Toyota employed its now famous Just-in-time (JIT) methodology that reduced supply chain logistics costs and improved quality through reduced inventory, reduced error and improved response time from factory to the consumer and back again.  Toyota became the number one carmaker in the World in 2012. Consequently, Dediu feels that for Apple to become a significant carmaker, it must look to challenge or change the existing means of production.

The high cost of traditional sheet metal car assembly

For Dediu, this is more than just a historical coincidence. He points to the present high cost of car manufacturing plants, which he argues, cost in the billions to create. Much of the tooling is expensive due to the stamped sheet metal process used by most mass-manufacturing carmakers today. Tesla Motors – a carmaker Dediu frequently argues is not truly ‘disruptive’ in the Christensen sense - was fortunate to be able to buy a disused Toyota plant in Fremont, California for a bargain price of $42 million, but it has spent millions in re-tooling it. [23]  As an alternative, Dediu points to the 'iStream'[24] production method developed by F1 McLaren designer, Gordon Murray.  Using the steel tubing and rapid turnaround methodologies of the race car industry, Murray claims he can cheaply make cars in smaller batches than present car manufacturing plants which are only viable after they make a few hundred thousand cars (assuming the cars sell!). Murray says iStream makes short production runs of 15-65000 vehicles feasible, and improves the customisability of these vehicles too.  Through using a methodology like iStream, Dediu speculates this could save a new market entrant billions.

iStream – a good fit with disruption theory

It goes without saying that these vehicles can be structurally very strong and necessarily light,[25] fitting in with Dediu’s speculation on a small Apple Car. The weight reduction becomes important in later calculations required to make the Apple Car’s speed and dynamics viable for the ‘job-to-be-done’.[26] It also fits in with the overall disruption theory of developing a cheaper product segment that many in the incumbent industry would deride.

Potential ‘disruptors’

Classic disruption theory suggests an incumbent will tend to be disrupted from ‘below’, in a cheaper product category that the incumbents dismiss until it is too late. Below is a quick summary of these ‘lower’ product segments and their issues. Note their compatibility with the iStream production methodology and its inherent strengths:

  1. The bicycle – relatively hard to use (balance), unsafe relative to a car, uncomfortable, especially if the distance is far, the weather hot/inclement or the terrain difficult e.g. steep roads.
  2. The motorcycle – even harder to use (balance, operate, maneuver at low speeds), unsafe relative to a car (there are innumerable morbid jokes about motorcycles) and uncomfortable especially in inclement or hot weather. Safety gear is extremely uncomfortable in hot weather and riding is unsafe/uncomfortable in the rain.[27]
  3. The scooter – a slightly easier-to-use variant of the motorcycle but still requires balance and skill to use at low speed. It is frequently too slow for freeways unless you get an expensive scooter – which begins to cost as much as a second-hand car, defeating one of the prime objectives of scooter ownership - reducing expense.
  4. Electric bicycles – similar issues as with the bicycle, although they do increase comfort enough to make longer road trips viable to even people of low fitness levels. Nevertheless the other issues it shares with bikes prevent most people from trying these (lack of safety/comfort relative to a car). In time, I nevertheless predict we will see a lot more of these, and electrified ‘balance’ scooters/skateboards/hoverboards (etc.) being adopted.

  5. ‘Autocycles’[28] and other experimental motorized vehicles[29]. Segways – Though Autocycles are slightly more comfortable and (supposedly) safer due to many adopting an enclosed ‘car-like’ shell, the Cambrian explosion of variants all share in common a tendency to suffer from being more expensive than a small, economical conventional car, obviating one of their main objectives – reducing expense. Examples include the numerous examples we see on such ‘vlogs’ as Translogic (on, most of which are priced above US$15,000 due to the maker lacking economies of scale. In particular, the GM EN-V[30] and the EO smart connecting car 2[31] look close to the idea I am arriving at.

    Frequently used by senior citizens or the immobile.

  6. Handicapped/Seniors electric cart – Every now and again, one sees a bold senior citizen driving their electric cart on a road, outside the confines of their retirement village, usually with a fluorescently coloured pennant to bring their vehicle in line with the higher eye-line of car and SUV drivers. Their lack of power means the speed differential between them and cars is vast, and increases the danger such that this type of usage is understandably not widespread as a transport solution beyond a few hundred metres from the driver’s residence, along a footpath. Also, their association with the elderly probably makes them ‘uncool’ in the eyes of many.

Different modes of personal transport are being enabled by the more powerful Lithium battery technology.

Presently, many in the car industry would not consider the above product categories as threats to the conventional 4-5 seater ‘cabin on four wheels’. However, when these lighter, smaller vehicles are considered in the context of the strong frames and advanced materials used in Formula 1 racing car design that are possible in the iStream production methodology, they can begin to overcome many of the issues these personal transport solutions have in becoming more mainstream. When combined with ‘smart’ technology e.g. to auto-balance, park and avoid collisions, they become a much more viable solution to a broader range of people. i.e. they become product categories that compete with non-consumption.

To add fuel to this speculation is the fact that Apple have been seen to add ‘vehicles’ to their list of company activities in Switzerland.

The paragraph added is reported by Swiss site ApfelBlog:[32]

“Vehicles; Apparatus for locomotion by land, air or water; electronic hardware components for motor vehicles, rail cars and locomotives, ships and aircraft; Anti-theft devices; Theft alarms for vehicles; Bicycles; Golf carts; Wheelchairs; Air pumps; Motorcycles; Aftermarket parts (after-market parts) and accessories for the aforesaid goods.”

Rail cars? Bicycles? Golf carts? Wheelchairs? Motorcycles? Perhaps these are just necessary inclusions in the ‘vehicle’ category in Switzerland, but it serves as a warning to not close off options. For my part, I suspect Apple will adopt a four wheel format but in a ‘micro’ size, slightly larger than the electric cart seen here.

A product that addresses the emerging markets

Another factor mentioned specifically by Dediu in the context of the Apple Car is the importance of the emerging markets to Apple’s revenues.[33] Tim Cook clearly sees the importance of Apple continuing its initial success in China, and achieving similar success in India.[34] Consequently, it stands to reason that whatever future products Apple comes up with, whether a car, or some other device, it must provide a solution to problems that are relevant in not only the established first world markets that Apple dominates, but also in these populous new emerging economies, especially the large cities of China, India, Brazil and Indonesia.

'Jobs to be done' Framework

Interestingly, Dediu does touch upon the above issue when he refers to Christensen’s ‘jobs-to-be-done’ framework.[35] We quote the principle from the Christensen Institute’s website: [36]

“Customers rarely make buying decisions around what the “average” customer in their category may do—but they often buy things because they find themselves with a problem they would like to solve. With an understanding of the “job” for which customers find themselves “hiring” a product or service, companies can more accurately develop and market products well-tailored to what customers are already trying to do.”

Taken in the context of cars, the fundamental job that many cars are trying to solve is to get the person from A to B, safely, comfortably, affordably and quickly. Many cars also try to address stylistic and ego issues as a job-to-be-done.[37] Dediu frequently uses the example of Tesla cars, which he feels people buy to look both cool and wealthy (without being ostentatiously wealthy), but also environmentally conscious – something that no other sports cars could do as well as Tesla Motors.

When we take the ‘jobs to be done’ framework in the context of the emerging markets, we see that they share the problem of many in the First World, only worse. They too have traffic jams – much worse than ours in fact in the big cities of China, India, Brazil and Indonesia - and they too will find it difficult to get parking at their destination. Consequently, if we can envisage an automotive solution that helps alleviate or solve these issues in both the First World and Emerging Markets contexts, then this is likely to be a space that Apple is trying to address as well.[38]

New Business Models – The real disruptors

Another point that Dediu raises frequently, though not so much in the car context, is that people frequently (mistakenly) believe the technology itself is the disruption. However, there are many instances when the technology has been around for years, but the disruption does not occur until the business models the technology(ies) enables begin to operate.

An interesting example in the transportation industry is that of Uber. Using a variant of social media software to solve an information problem (i.e. People wish to find a lift to their destination; Drivers wish to find passengers), Uber is taking over a large portion of the taxi industry’s traditional business.

We also saw with Apple that the iPod in and of itself was not what revolutionized the industry. It was the iPod in conjunction with the Apple iTunes Store. Where previously the recording industry sold most of its content on physical media such as CD’s, in retail stores, the iTunes allowed for easy and legitimate purchase of just a single track at a much lower price point.

Other factors e.g. Aggregation Theory & Modularity Theory

Of course, the above-mentioned factors are not the only factors that may impact upon the success or failure of an Apple Car. Other theories that are frequently described in the context of disruption Aggregation Theory[39] and Modularity Theory. I am not fully abreast of these theories and can only speculate upon how they might impact the automotive industry.


Dediu has described his 'Law of conservation of modularity'[40], my loose understanding of which is that he postulates disruption may occur when some significant change has occurred to make a system modular. Modularity, he argues will push some facets of development and slow others depending upon which is the ‘inferior’ component.  In the context of the automotive industry it appears he identifies high degrees of modularity, with specialist suppliers supplying most components of the car, such as suspension, transmission, tyre technology, entertainment systems, etc.  With an electric drive train, even more can be outsourced and commoditised, as electric drive trains are far simpler than internal combustion engines.

In fact, we see a similar phenomenon in the bicycle industry with gears (Shimano), seats, brakes and electric motors coming from suppliers, with the big brands assembling these products and repackaging them under their own brand name. Consequently, it is easy to envisage a modular industry quickly developing around a small form-factor vehicle, perhaps using ‘off-the-shelf’ components that are slightly upscaled or specifically designed for the Apple Car (BTW: Another Apple hallmark as we saw in the case of Corning developing ‘Gorilla Glass’ for Apple’s iPhone).

Aggregation Theory

With ‘Aggregation Theory’, Thompson states:

“Looking forward, I believe that Aggregation Theory will be the proper framework to both understand opportunities for startups as well as threats for incumbents:

  • What is the critical differentiator for incumbents, and can some aspect of that differentiator be digitized?
  • If that differentiator is digitized, competition shifts to the user experience, which gives a significant advantage to new entrants built around the proper incentives
  • Companies that win the user experience can generate a virtuous cycle where their ownership of consumers/users attracts suppliers which improves the user experience

The Uber and Airbnb examples are especially important: vacant rooms and taxis have not been digitized, but they have been disrupted. I suspect that nearly every industry will belatedly discover it has a critical function that can be digitized and commodified, precipitating this shift. The profound changes caused by the Internet are only just beginning; aggregation theory is the means.”

We have already seen Tesla Motors performing software upgrades automatically that boost performance and identify any issues with their vehicles in a much more efficient manner than is possible with earlier cars. It will be up to the Apple Car’s designers and others operating in this space to conceive of what these might be, or alternatively develop a car ecosystem that allows developers the opportunity to address them at some later date.


When one considers all of these points together, we arrive at:

  1. A small car, possibly a very small car that may even be in a product segment that many may presently deride (i.e. asymmetrical) e.g. Micro cars, autocycle, 'smart car', or even electric cart or golf cart.
  2. A product that can sell in the millions ('significant contribution'), and competes with non-consumption (innovative or makes the user interface so simple and the product so comfortable and desirable, many more people can use it than its predecessor.)
  3. As a consequence, it will probably seek to solve the problem of getting person X from A to B by focusing on the big issues at hand not solved well by the existing dominant paradigm of car formats or other modes of private transport e.g. Traffic (jams) for cars, safety (of motorcycles/scooters and bicycles), convenience (e.g closed in cabin again, though this time to shelter from rain, or eg. Easy to use/steer, even a child could drive one safely, so no balancing required, no instability at low speed, no complicated manual gearbox etc), parking (e.g. Through self-parking smarts) etc.
  4. In addition to this, there will be another vector, in technology, that should also be present that will allow further revolutionary changes to essentially the same form factor, e.g. The gradual improvement of driverless technology e.g. Automated pilot software, e.g. 'Linking' of compatible cars to form small convoys, more accurate mapping etc etc.
  5. Another important factor around the question of the 'job to be done' that it solves in a superior way to existing car form factors, is that it be as much a 'job to be done' in the more populous cities of the developing world and emerging economies of China and India as it is in the developed world cities of London, New York and San Francisco etc.  We can easily see that traffic jams are generally worse in these poorer countries, and can get much bigger as they experience major net migration to the cities and increased car ownership despite little improvement in infrastructure.  This again helps identify the 'job to be done' as that which we described above, as the problems of traffic and parking are only worse in the big cities of less developed emerging economies due to their generally having poorer infrastructure.  We speculate that a car that can somehow more efficiently use road space will help in solving this job to be done, be it a smaller form factor (perhaps narrow enough to use two abreast in one conventional road lane width), or a method of 'linking' or convoying with other cars in some meaningful way that improves traffic flow safely.
  6. We must also consider the possibility that the Apple Car may not be owned like most traditional cars through a purchase, but through licensing, subscription or some other business model. We have already seen Apple’s buyback model deployed.[41] Perhaps they will take it one step further offering a yearly subscription model, displacing the phone retailers and telephony companies that presently bundle phones with phone and Internet contracts.  How then might these new business models apply in the context of an Apple Car? What would an Apple Car subscription or its equivalent buy you?  Use of an Apple Car for one year, after which the subscription must be renewed or the car returned? Membership of a convoying service that allows one to use transit lanes, or relieves the member from driving for some part of his/her journey?  Parking in a highly compressed row of Apple Cars that can auto-park and auto-unpark?

Some rough physical parameters for the Apple Car

To help paint a picture of the specifications and performance of such a vehicle, I refer to the existing performance characteristics and specifications of existing electric vehicles and extrapolate and interpolate from there.

Electric Bicycles

Curb Weight: Around 50-80 pounds (23-36kg)[42] with the lower spectrum being a more expensive ‘lightweight’ bicycle and the higher end being designed with a more powerful (500W) motor and steel frame.

A typical budget electric bicycle would tend to have a 200-250W motor and should push an average adult male (80kg, giving a combined weight including the bike of about 110kg) at around 25kph on level terrain with a standard steel frame.

EO smart connecting car 2 (a small ‘concept’ car)

Size: 2.58 m x 1.57 m x 1.6 m; Or rather 1.81 m x 1.57 m x 2.25 m (The indication of the length of the vehicle depends on the type of tire / tyre section. The values have been recorded with tires of type 200/60 R 16 79V.)
Weight: 750 kg
Power supply: 54V – LiFePo4 battery
Speed: 65 km/h (40 mph)
Actuation/ Engine: 4 x 4kW wheelhub motors; 10 x longstroke-Lineardrive with 5000N 1 x Folding Servo
Sensors: Hall-effect as well as string potentiometer sensors for angle and length measurementStereo-Kameras at the front and at the back32-Line Lidar for 3D-scans of the environment6 ToF 3D cameras for near field overview
Communication: CAN-Bus RS232 RS485 LAN

Tesla Model S[43] (a conventionally sized, luxury sports car with a powerful electric motor)

Curb Weight: 4647.3lb (2107.8kg or just a little over 2 tonnes)

Powertrain: 70kWh or 85kWh variant microprocessor controlled, lithium-ion batteries

Length: 196.0” (16.3 feet or almost 5m long)

Width: 86.2” (7.2 feet or around 2.2m wide)

We speculate that Apple would wish to have some more conventional performance specifications, that could propel the vehicle up to a speed of around 110km/h to cater to Western markets, but not much more as few roads allow speeds beyond this. Even those that do allow greater speeds generally allow traffic to go at 110km/h. Keeping the Apple Car’s top speed lower than most internal combustion engines are capable of would be in keeping with Apple’s tradition of not engaging in ‘spec wars’. From the outset, Apple has always eschewed striving to be the ‘most powerful’ or the ‘fastest’, but instead chose to reach only those performance benchmarks necessary to do the job.

Extrapolating and interpolating from the above, I conjecture that a vehicle weighing around 400-700kg (made possible by the use of light, strong materials, with lower bounds limited by the considerable weight of batteries, presumably placed in the ‘floor’ of the car)[44] would need motors totaling from 10-30kW (smaller motors could be placed at each wheel and co-ordinated using software) to propel it to speeds between 80-110km/h with a range in excess of 300km – more than adequate for most purposes, especially ‘short runs’ to the shop/public transport hub or keeping up with commuter traffic in emerging markets.

If Apple were to build a car about the size of the EO smart connecting car 2, then it may attempt to reduce weight by using lighter, but stronger materials as that employed in the iStream methodology. However, because it would have more powerful batteries, which are the components that weigh the most in these types of cars – c.f. the 2 tonne Tesla S) that give greater speed and range (250 miles+), the weight may stay the same at around 500-800kg.

The Toyota i-Road has tilting technology to increase stability caused by the high height relative to the narrow base.


As stated before, Apple tend to adopt premium pricing within the product segment they operate in. If they were making a conventional car, we anticipate they would be selling cars priced in the range of the Tesla Model ‘S’, or US$70,000/AU$100,000. However, we do not believe Apple will produce a conventional car for the numerous reasons mentioned above. Instead, we are looking at something more like a highly specced electric cart or autocycle. As mentioned, autocycles frequently are priced at US$15,000+ due to their lack of economies of scale. With a production technique like iStream, we anticipate these prices could be reduced below US$10,000, even with deluxe materials such as a carbon fibre body due to economies of scale. One price range the Apple Car may be trying to gun for is the US$35,000 mark for enough Apple Cars to move 4-5 people. This price mark is what many in Western markets would call the higher end of the family sedan car prices (think the Honda Accord Euro, and Mazda 6) and is also the stated price of the highly anticipated Tesla Model III.[46] So should the Apple Car come in a single seat configuration only, then we would expect four of them to cost below US$40,000.


In the context of personal transportation, we can all foresee that one day people may not even own cars, and instead hail the all pervasive driverless Uber car or its equivalent. But in the meantime – most experts predict that eventuality is at least 10 years away - can Apple come up with a solution that will be needed or wanted by billions?

Perhaps from the above criteria, Apple can craft a high quality, personal transportation vehicle that is more economical than the traditional car, safer, more comfortable and quicker than car alternatives (e.g. motorcyles, electric carts), but above all solves the jobs to be done around transportation much better than the traditional motorcar.

Originally a doubter of Apple's capability to produce a competent motorcar.

Doubt has been expressed by some as to this ever occurring. In February 2015 Daimler CEO, Dieter Zetsche stated:

“If there were a rumour that Mercedes or Daimler planned to start building smartphones then they (Apple) would not be sleepless at night. And the same applies to me".[47]

Then in late January, 2016, back from a recent tour to Silicon Valley, Zetsche acknowledged his surprise at the progress in Silicon Valley:[48]

“Our impression was that these companies can do more and know more than we had previously assumed. At the same time they have more respect for our achievements than we thought,”

Clearly, with Apple’s track record, no one should be dismissing the possibility of a successful Apple Car anymore.

Yen Yang is the Principal, Creative Industries for BYP Group. 

To contact Yen, email yen at bypgroup dot com

References (cont'd from my short article about the smart car)

  1. [13] Christensen is the pioneer of the seminal ‘The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail in which the author first popularized the term ‘disruption’ to describe the phenomenon of small start-ups displacing large, well-resourced incumbents:
  2. [14] Blackberry phones were seen as so pervasive and addictive at that stage they were nicknamed ‘Crackberries’.
  3. [15] A wonderful account of these start-up years and the context of the making of the Apple 1 (as it is now known) is provided in Apple co-founder Steve Wozniak’s autobiography, ‘Woz’: Computer Geek to Cult Icon.
  4. [16]
  5. [17]
  6. [18] Here ‘non-consumption’ is used in the business sense. i.e. People did not buy computers prior to the Macintosh because they were too hard to use. When the Macintosh introduced a mouse and graphical interface more people began to buy computers:
  7. [19] He also speculates it might be an autonomous ‘Winnebago’ in Asymcar 26: The iPod:
  8. [20] Asymcar 27: Titanic:
  9. [21] This was in contrast to Ford’s monotonous design made famous by a quote attributed to him: “You can have it (the Model T) in any color you want, so long as it’s black.”
  10. [22] Asymcar 24: Get rid of the Model T men:
  11. [23]
  12. [24]
  13. [25] ;
  14. [26] I have only done rough calculations extrapolated and interpolated from existing vehicles, both on the market and in experimental form. These calculations are included below in the section entitled: ‘Some rough parameters’.
  15. [27] For those who have never worn full leathers and a helmet on a hot, humid Summer’s day, just take my word for it.
  16. [28]
  17. [29] For an interesting selection of experimental vehicles, check out the Translogic vodcast on and . Of particular interest to this author are the General Motors EN V ( ) and the EO smart connecting car 2.
  18. [30]
  19. [31]
  20. [32]
  21. [33] Asymcar 25: The Selfie Experience:
  22. [34]
  23. [35] Asymcar 18: Cars of the People:
  24. [36]
  25. [37] This is also argued by Dediu to be a sign of the existing car format’s maturity and stagnation.
  26. [38] We can see an excerpt of Dediu’s thinking on one of his blog pages:
  27. [39] A theory put forward by technology analyst, Ben Thompson on his Stratechery website:
  28. [40]
  29. [41]
  30. [42]
  31. [43]
  32. [44] Batteries in the floor of the car help provide a lower centre of gravity. They have been pioneered in cars like the Faraday Future and the Tesla Motors: ;
  33. [45]
  34. [46]
  35. [47] Source: )
  36. [48]

Speculations on the Apple Car: A super-smart micro-car for the masses?

(This is a short article about the Apple Car. For more reading on this topic, please see my detailed blog post on the future of the smart car.) Original image:

In February 2015 the Wall Street Journal (WSJ) published an article claiming Apple would enter the automobile market.[1 and 2] It seemed like the final confirmation of a rumour that had circulated for months, if not years, around what was then the World’s largest company and is still the most admired.[3] Since that point in time, no one has seriously disputed the existence of the project,[4] apparently codenamed ‘Titan’, which the WSJ claims is scheduled for 2019 release.[5]

Instead, speculation has turned to the car itself: What will it look like? What will it do that is different to cars today? Will it be electric? Will it be driverless? Since they appear to have entered into an agreement with BMW, will it look anything like the BMW i3 electric car? Or will it look like a minivan as speculated in the WSJ article? How will it be manufactured? What could Apple possibly do to make a profit or improve upon the 5-seated cabin on four wheels format that has dominated the ultra-competitive car industry for over a century?

Using parameters identified by leading analysts and taking the best of experimental car designs visible in the public domain, it may be possible to begin to visualise the rough envelope, and significant features of the upcoming Apple Car or other future vehicles[6] that may eventually supplant the motorcar that we know today.

Image 2: An example of proposed ‘convoying’ technology suggested for the EO smart connecting car 2.

I conjecture that the Apple Car, or another potential ‘disruptor’ to the established automotive industry, will have the following criteria. It will be:

  • Small – perhaps shaped to fit only one or two passengers, possibly ‘in-line’, rather than abreast to make the car suitable for bicycle lane access or ‘split lane’ access (where the traditional lane width is split in two to accommodate double the traffic, but only for narrower vehicles).
  • Electric – this is actually as much due to the need for ‘modularity’[7] in production and simplicity as it is for green credentials (which would be another big selling point). Electric motors are very simple, cheap, and powerful (high torque). Reliable variants are already available for electric bicycles ‘off-the-shelf’.[8] Batteries – a substantial part of the cost of electric vehicles - are likely to get significantly cheaper by 2019[9] in part due to production increase initiatives by the likes of Tesla and Panasonic.[10]
  • Light (<750kg) – This is likely to be a necessity due to the types of performance characteristics Apple would need to make the car appealing to the mass markets. i.e. Capable of speeds of up to 110km/h (but no faster) using an electric motor. Note, Apple may decide to limit the speed to below 80km/h for safety reasons or because it decides travelling faster than 80km/h is ‘just unsafe’.[11]
  • Manufactured using revolutionary production techniques (relative to the conventional car assembly plant ‘pressed sheet metal’ process)
  • Manufactured using specially developed lighter, stronger materials enabled by the revolutionary production technique. This is an important consideration to allow people to overcome safety concerns for smaller vehicles and modes of transport. Apple has a history of commissioning bespoke materials for its products with superior aesthetic/performance characteristics e.g. ‘Gorilla Glass’ for the original iPhone, and later ‘Sapphire Glass’ presently used for smaller glass components, as well as the gold ‘alloy’ used in its ‘Edition’ Apple Watches.
  • ‘Smart’ – It will of course have not only the latest entertainment capabilities a la CarPlay, but it will have the best driver/safety technologies software can provide, as seen in recent models of the Tesla cars. These will only get better with time, for example, it may later employ other technologies glimpsed in experimental/concept cars such as ‘convoying’ and ‘platooning’[12] and of course, in time become potentially self-driving or ‘driverless’.
  • It may be accompanied by a different business model, e.g. a subscription service or ‘upgrade’ service.
  • In ‘First World’ markets the main ‘job-to-be-done’ is likely to be a ‘short trip’ specialist (e.g. to the shops/transport hub and back) that parks easily, in more limited space, and is narrow enough to bypass some types of traffic jams. So for many it would act as an ‘economical second vehicle’ for families in more affluent societies and as a ‘sole vehicle’ for the Y-Generation and younger. In emerging markets, it may be the ‘sole commuter vehicle with the ability to expand’. The ‘ability to expand’ may come through an ability to convoy with other Apple Cars, so a family of 5 might stick 2 or 3 together for family trips.
  • 200km+ range/endurance – This is to accommodate the emerging markets who would want this vehicle to act in the first instance as a commuter work-horse in the traffic jams of the large cities e.g. Beijing, Jakarta, Mumbai etc.

If you are interested in understanding how I got to this point, you can read more here.

Yen Yang is the Principal, Creative Industries for BYP Group.

To contact Yen, email yen at bypgroup dot com









  1. [1] Original source:
  2. [2]
  3. [3]
  4. [4] Although, to date, Apple has never confirmed the project’s existence.
  5. [5]
  6. [6] I put in this disclaimer due to my potted history of predicting Apple products. In 2009 I predicted the shape and functionality of the rumoured Apple iPad to my fellow geek friends. I was wrong. I had inadvertently predicted something like the Microsoft Surface Tablet that came out 3 years later and not unlike the iPad Pro: ;
  7. [7]
  8. [8] Bafang is one of the leading electric motor OEM’s. Costing only AU$200-400 in ‘kit form’ you will frequently see their motors repackaged under the well-known Western bicycle brands:
  9. [9]
  10. [10]
  11. [11] Apple has a long history of making design decisions such as this, e.g. no ability to add additional slot-in memory for their idevices, incompatibility with Flash, few ports for the laptops, only one mouse button etc etc.
  12. [12]

Creative Business in Australia

Creative Business in Australia book coverBYP Group would like to congratulate the Creative Industries Innovation Centre, especially former director Lisa Colley, for the release of the e-book, Creative Business in Australia: Learnings from the Creative Industries Innovation Centre 2009-2015 by the University of Technology Sydney. The book pulls together key lessons from the Centre's six years of operation, during which time the Centre delivered hundreds of business reviews to creative SMEs and collected a rich trove of data about Australia's creative industries.

Amongst other useful things, the book includes a summary of BYP Group Principal of Creative Industries, Hung-Yen Yang's findings about the opportunities, strengths and issues facing Australian creative businesses (see in particular pages 30-31). Yen distilled these issues via a comprehensive analysis of the Centre's business reviews in nine creative industry sectors.

2-page summary 'Forensic Reports' based on Yen's findings can still be accessed via the UTS website and via the links below. For more information contact Yen: yen at bypgroup dot com or +61 414 462 189.

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