Apple cancels its car plans

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At least some CXOs in some premium car companies should be breathing a sigh of relief that they no longer have to contend with a long impending Apple car threat on top of everything else

As a former GM executive put it: “There was a view that if they ever did put out a car, that would be tough to compete with.”

According to Bloomberg, Apple has internally informed its EV team (Project Titan) that the project is being shut down after spending billions of dollars on R&D plus multiple restructurings and strategy revamps over the years

‘Project Titan began under Cook’s tenure after he took over as CEO from co-founder Steve Jobs in 2011. It offered one pathway forward as the company sought out new opportunities beyond the iPhone, which continues to dominate the company’s overall revenue.’
https://www.wsj.com/business/autos/apple-car-project-canceled-ced2b626

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Good. It was a bad idea from day one. Apple does not need lawsuits about Apple cars or Apple self-driving software failing and killing people.

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The main reason it’s a bad idea for Apple is that Apple prefers high gross margin products. They do NOT want or need high capital investment and low-ish gross margin products. This is why it makes no sense for Apple to make cars or TVs or wireless routers.

Ten years ago, Apple thought that they could design a niche car that would command a high enough price to provide those nice high gross margins, yet still have enough of a market to be successful. But 10 years have gone by, and other car companies (primarily Tesla, but others as well) have created products that are more than adequate and would not allow the size of the market for an Apple car, at the requisite price, to exist. Therefore, the only logical decision is to not do it.

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Plus, isn’t Apple more of a design company, and not a manufacturer? I was under the impression that nearly all of their manufacturing was outsourced (a la FoxConn in China), and they had very little of their own manufacturing resources. While that’s common for a lot of goods (like consumer electronics), I don’t think that happens in the automotive industry for the final product.

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There’s been efforts to escape the China manufacturing, some to the US, some to India…

Why production of Apple iPhones has been moving from China to India | PBS News Weekend.

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I’ve long been a skeptic of the idea of an Apple Car, for many reasons including some noted in this thread. I’ve especially been skeptical of fanboys in our Apple communities as well as industry commentators from far afield who seem to think that Apple has some inerrant magical ability to revolutionize any field it enters with that special “Apple design magic”.

To be fair, Apple has indeed revolutionized more than its share of electronics fields – computers and operating systems, portable music players, smartphones, and smart watches, to name some obvious product lines.

But in parallel with those, I watched people everywhere proclaiming the Apple Television (not the streaming box) would revolutionize the television (hardware) industry, and no product came of it.

I was primed for skepticism regarding an Apple Car, despite all the reporting about Apple’s activity in the area. My refrain was “I’ll believe it when they start selling a product.”

In the meantime, it always struck me as something Apple didn’t need – not just that Apple didn’t need the product line but, perhaps as important, Apple didn’t need the headaches. Apple didn’t need to figure out a whole new industry’s worth of supply lines, manufacturing logistics, tooling, an entirely different kind of labor force, and – perhaps the biggest headache of all – government regulations. And as touched upon elsewhere in this thread, Apple typically outsources its consumer electronics manufacturing. As far as I know, to take a relevant example, Tesla doesn’t do that.

So why did Apple waste so much money and effort on Project Titan with no product?

It turns out that they probably did produce something, and it’s not CarPlay: Patents.

Googling “Apple car patents” brings up a lot of articles and discussion, and it’s hard to gauge the value of Apple’s car-related patents, or whether they’re really as many as other car-related patents granted to other companies. It’s not unreasonable to question the value of a patent portfolio. Many patents go unnoticed – and unenforced – for years. But at least the patents are there, and Apple is definitely aware of the importance of patents, as with Masimo’s infringement claim against Apple’s blood oxygen sensor in the Apple Watch.

Consider, in 2022, MacRumors – citing Nikkei and Tokyo analytics firm Intellectual Property Landscape – noted that Apple had filed for and published 248 car-related patents since 2000.

The numbers of patents filed ebbs and flows year to year. Are they worth anything? Will the investment in Project Titan pay off with licensing fees instead of an actual car? I have no idea. I claim no expertise in patents and the auto industry. Time will tell.

-awlabrador

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Uh-oh, will Apple soon consider “patent mining” as a lucrative new profit category to be reported in their quarterly earnings statements? :wink:/ 2. I’m still kinda mad that - to my knowledge - all the initial patents on the iPhone (“We patented the h@ll out of this thing” - Steve Jobs) have not paid off.

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Nor do they have any mechanical engineering design/ production/ servicing expertise. Without which they would suffer serious culture shock trying to pick up competitive capabilities either in house or via poaching from established carmakers

And it doesn’t help that EVs are facing a slowdown across markets while capacity is already excessive, forcing prices down and making it even less profitable for new entrants

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Good point! Any major adverse EV incident could seriously tarnish its very precious brand equity.

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It’s definitely an interesting turn of events with Apple deciding to shelve its car plans. This move likely does bring a sense of relief to executives across the premium car sector, who have been anxiously watching Apple’s potential entry into the market. The anticipation of Apple, with its reputation for innovation and market disruption, venturing into automotive manufacturing has indeed been a looming challenge for established carmakers. The fact that Apple has decided to step back after significant investment in R&D and multiple strategy adjustments speaks volumes about the challenges and complexities of the automotive industry.

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I’d bet there are also quite a lot of executives within Apple who are now breathing a sigh of relief. :wink:

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[quote=“g0177325, post:11, topic:102367”] :
I’d bet there are also quite a lot of executives within Apple who are now breathing a sigh of relief. :wink:
[/quote]

Touche`
Hopefully less sleepless nights ahead :smiley:

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Textbook case of chasing ‘Diworsification’ just because you can :slight_smile:

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I follow Tesla specifically and EVs in general, and nowhere have I caught even a trace of a hint that anyone in any part of the auto industry has been anxious about Apple’s possible entry into that market. Could you provide any pointers?

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Agree! AppleCar is (was?) a Tim brainfart.

The Captain

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“Apple had such an aura of being able to create really innovative, easy-to-use stuff,” said Phil Abram, a former General Motors executive who ran the company’s infotainment division before retiring in 2017. “There was a view that if they ever did put out a car, that would be tough to compete with.”
https://www.wsj.com/business/autos/apple-car-project-canceled-ced2b626

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Okay, a former General Motors executive qualifies. However, since he ran the company’s infotainment division before retiring I strongly suspect that he was primarily focused on that infotainment aspect, rather than the complete car. That aspect fits perfectly with Apple’s expertise, unlike everything else about cars.

(I wonder how good the GM infotainment system was during his tenure, before he retired in 2017? Whatever it was like, being worried that Apple would do it better was quite a legitimate concern!)

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Apple started working on a car project in 2014 with the idea of making a car that could drive itself without needing a steering wheel or pedals, aiming for a future where cars didn’t need human drivers. But as they kept working on it, Apple changed many of their original ideas for the car.
But the projects have been canceled according to this article on Bloomberg at Bloomberg - Are you a robot?

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Hi Sophie thanks for sharing that
Yes it seems they were zeroing in on a people-mover type design inspired by the Beatles’ legendary VW ‘hippie bus’ :slight_smile:

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You know, I still hope that Apple will come up with something huge.
I remember my friends and I were discussing that soon our kids would beg money for something like iCar, like we all wanted iPhones and iPads.

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