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Apple Set to Abandon Automotive Dream

Company sets deadline for late 2017.

by on Oct.19, 2016

“We've always viewed that people love surprises," Apple CEO Tim Cook said. Surprise! It may not build a car after all.

Apple Inc. plans for the car business, code-named “Project Titan,” have fascinated the automotive industry around the world even though Apple has said little of substance about the possibility.

Now new reports are circulating that Apple has “drastically scaled back its automotive ambitions” and has even “eliminated hundreds of jobs” even though it has never acknowledged hiring folks for the uato project in the first place.

The Journal of Record!

Instead, Apple, according to several accounts circulating in the Silicon Valley media, will now concentrate on developing a system for autonomous vehicles that could be sold downstream to one of world’s car companies.

Apple executives have given the car team a deadline of late next year to prove the feasibility of the self-driving system and decide on a final direction, according to Bloomberg. Representatives from Apple, which in recent years has invented or re-invented major consumer products such as personal computers and mobile telephones, have declined to comment.

The new deadline, which has not been acknowledged by Apple, would appear to be an admission that the automobile industry, with its diverse customer demands, including operating in extreme environments can cripple other types of consumer products, is a tougher nut to crack.

Despite the successful launch of Tesla by Elon Musk in recent years, Apple isn’t the first Silicon Valley company to learn firsthand that technical wizardry or mastery doesn’t predict or guarantee success in the automobile business. Google, for example, has already sought out partners in Detroit while testing its theories about autonomous vehicles, but hasn’t found any takers yet.

(Apple’s car play might be McLaren. Click Here for the story.)

The car business is also costly as Fiat Chrysler Automobiles N.V. CEO Sergio Marchionne stressed last year in a presentation to investors from around the world. The automobile industry may never match up to Silicon Valley’s model of profitability.

Nevertheless, even with its intense competition, extensive government regulation and relatively small margins, it remains a tempting target for Apple. A recent survey indicated that more than half on all Americans contacted would be willing to purchase a vehicle from a tech company like Google or Apple.

Earlier this summer, Bob Mansfield, a highly regarded manager who helped develop the original iPad, returned in April from a part-time role at Apple to lead the Project Titan team, according to reports that circulated across Silicon Valley.

(Apple may back away from auto manufacturing. Click Here for more. )

About a month later, Mansfield apparently told employees the strategy was under review, according to people who attended the meeting.

The potential threat from Apple, Google and Tesla have prompted established carmakers to invest heavily in technology and concepts that might have otherwise remained under wraps for decades. For example, engineers Mercedes-Benz had worked on an elaborate driver assistance system that included many of the features required for autonomous driving for more than two decades.

The publicity around Google’s self-driving car project prompted Mercedes to show off the system, which has now become optional equipment on models such as the S-Class and E-Class. Both Mercedes models can drive themselves with minimal driver intervention for long distances.

(To see more about Apple’s automotive setbacks, Click Here.)

Automakers, however, are extremely reluctant to allow a supplier, even a long-trusted one, to supply critical software that is essential to creating the unique character of a particular vehicle.

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2 Responses to “Apple Set to Abandon Automotive Dream”

  1. CT says:

    I’m disappointed, but not surprised. We were supposed to see an Apple TV (a REAL TV, branded by Apple – not the ‘hockey puck’ media streamer), but I think the realities of competition in that space, just as in the car space, hit hard.

    But Apple’s HUGE new HQ should be finished next year, and I have to believe that their plans go beyond making iPads and computers.. At some point.

  2. Robert Austin says:

    Apple is much smarter than I thought. Going into the automobile business would be a giant step backwards for them. Automobiles require giant capital outlays, require huge factories, are physically large and difficult to transport from factories to customers…..and the available margin on them is relatively low.

    Apple is much smarter being a hardware/software partner to various car companies and concentrating on what they do best…develop computer systems with outstanding human interface capabilities. Everyone will win that way.