That was quick. For the past few years we’ve been treated to a non-stop rumor mill that regurgitated detail after detail about Apple’s car, code-named Project Titan. The latest rumor says Apple Car is done.
No, not done as in finished and ready for manufacture, but done as in the turkey is done on Thanksgiving Day. Stick a fork in it. The turkey is cooked. Apple Car will not see the light of day. What happened? Everyone has their list of speculations, but if you want the skinny in a single word– Tesla.
The usually-accurate-at-the-last-minute Mark Gurman says Project Titan has been refocused. What refocused means only Apple knows, but hundreds of employees have been reassigned, let go, and the project has been downsized to focus on some kind of autonomous driving system, which is taken to mean Apple needs a partner, or Apple needs to buy car manufacturer, or Apple might decide to build a car again in the future, but so far progress on building an actual car has been slow and very expensive.
It’s not that Apple doesn’t have the money. The company could buy Tesla today, bite the proverbial bullet and find itself the largest seller of big luxury sedans almost overnight.
Yes, Tesla now sells more big luxury sedans than Mercedes-Benz, BMW, Lexus, and other exotic brands and the future is looking good for the Apple-like electric car maker now sitting on over 400,000 for a car that may not see the light of day for a couple of years.
Apple’s problem with Project Titan is a problem that seems to infect most large companies that attempt to grow outside of their normal and historical domain. Despite iPhone-like software in the Tesla Model S, building a car is not the same thing as building an electronic gadget. Both are competitive industries, yes, but one is mature and one is in a state of flux. But it’s not what you think.
The smartphone industry is the mature industry, while the staid old automobile industry– which dates back to the 19th century– is the one in a constant state of industrial and electronic flux. Instead of hand crafted automobiles, robots build today’s cars. Instead of a few electrical wires for sound systems, lights, ignition system, and fuel injection, today’s cars are packed with computing devices, and with a few notable exceptions, ever major manufacturer is working on autonomous self-driving, computer aided vehicles.
If Apple’s objective was to build a Tesla-killer it’s likely that Tesla advanced so rapidly that it killed Apple’s chances of advancing the technology enough to differentiate Apple Car from models already on the market. Building a new car company is hard work. Buying a car company is easy, but doing so would give public evidence that Apple– the company notorious for going it alone– couldn’t build a competitive car on its own.
Rising Table Stakes
In gambling, there’s a wall when table stakes are applied, and it’s likely that Apple had dumped in far more money to Project Titan than results would indicate because the industry is moving forward so rapidly all that Apple could do was play catch up and Tesla had already reached a point where it commanded a growing stake in the big luxury sedan arena– ostensibly where Apple would play– and was poised to move the company’s good reputation and software technology down the scale to more affordable vehicles.
Thanks to the Tesla-inspired and very rapid changes in the industry, Apple had nowhere to go, and has nothing to sell. To be fair, not all manufacturers have Tesla-like projects in the works, so it may be that Apple can partner with the likes of second tier manufacturers including Fiat-Chrysler, but that just sounds so not like Apple.
As much as we would all like to see Apple’s iPhone successes replicated in an Apple Car, Tesla already builds it.