This was unexpected. In an interview on Bloomberg Technology (start watching at 7:55 for the full discussion) that touched on Apple’s never-before-discussed car plans, Apple CEO Tim Cook said:
“There is a major disruption looming there, not only for self-driving cars, but also the electrification piece. If you’ve driven an electric car, it’s a marvelous experience. And it’s a marvelous experience not having to stop at the gas station. Plus you have ride-sharing on top of this. So you have three vectors of change happening generally in the same time frame.
“We’re focusing on autonomous systems. Clearly, one purpose of autonomous systems is self-driving cars. There are others. We see it as the mother of all AI projects… We’re not really saying from a product point of view what we will do. But we are being straightforward that it’s a core technology that we view as very important.”
It’s unlike Apple to be so forthcoming about future directions.
Apple’s Road So Far -- Apple initially planned to build its own car, starting in 2014. To that end, the company hired more than 1000 engineers to work on Project Titan, as it was codenamed.
By 2016, however, Project Titan was rumored to be flailing, and Apple brought in Bob Mansfield to head the team. Previously, Mansfield had served as Senior Vice President of Mac Hardware Engineering, retired briefly, and then returned as Senior Vice President of Technologies for 9 months before leaving to “work on special projects under CEO Tim Cook.”
Mansfield reportedly cut hundreds of engineers from Project Titan and refocused Apple’s efforts from building its own car to building an autonomous driving system. In April 2017, Apple received a permit from the California Department of Motor Vehicles to test three self-driving SUVs.
Even assuming that Apple was working on self-driving car technologies before Project Titan formed in 2014, it still likely lags behind Google’s Waymo, which launched in 2009, has started an early rider program for self-driving cars in Phoenix, and is partnering with ride-hailing service Lyft.
Lyft competitor Uber has also put significant effort into the field, providing self-driving rides in Pittsburgh and acquiring the self-driving startup Otto. That acquisition led to a lawsuit with Waymo since Otto co-founder Anthony Levandowski had also helped found Google’s car team. Uber has now fired Levandowski, but the lawsuit continues.
(My favorite source of self-driving car information is Brad Templeton, who created the Usenet newsgroup rec.humor.funny, founded ClariNet — the first business based on the Internet — and served as Chairman of the Electronic Frontier Foundation.)
Reading the Tea Leaves -- Why did Tim Cook choose to reveal Apple’s direction now, and what does it mean for us as Apple users? I found Cook’s revelation both fascinating and confusing.
As a company, Apple is all about putting products in the hands of people, which makes Cook’s statement that Apple is focusing on autonomous systems surprising. In the few situations where Apple has embedded its products in other companies’ products — CarPlay, most notably — it hasn’t been a big win. You don’t see car companies advertising CarPlay as a major selling point, and in our testing, it didn’t work all that well anyway (see “CarPlay Offers Limited, Glitchy iPhone/Auto Integration,” 18 January 2016). It’s hard to imagine Apple being happy selling autonomous driving technology to the likes of BMW or Ford.
Perhaps the autonomous systems technology is just a step on the road to Apple’s own car. Although Apple has the money to buy nearly any carmaker it might want, that would be a huge shift for the company and would likely create massive culture clashes within the combined firm. Plus, such an acquisition would put Apple into a business about which it knows nothing.
It seems more likely that Apple would use some of its overseas cash to invest in one of the smaller carmakers like Nissan or Hyundai, with an eye toward creating an Apple-branded car that would leverage the car company’s expertise in making an automobile but give Apple some level of industrial design and internal systems control.
Such a collaboration could even happen with market darling Tesla, whose stock price has recently skyrocketed, putting the company in fourth place worldwide by market cap, behind Toyota, Daimler AG, and Volkswagen AG, but ahead of BMW, GM, and Ford. That’s despite the fact that Tesla lost $800 million in 2016 on revenues of $7 billion, delivering just 76,000 cars. In comparison, GM sold 10 million cars for revenues of $164.4 billion and profits of $9.4 billion. Stock prices are all about future potential, of course, but still…
My best guess as to why Cook felt that now was the time to reveal Apple’s general direction is that he wants the world to be aware of Apple’s larger ambitions. It’s purely about perception, perhaps along with ensuring that Apple gets mentioned alongside the likes of Waymo and Uber. Consider it a modern-day version of the old computer industry technique of using early announcements to generate FUD: fear, uncertainty, and doubt.
All that said, it’s hard to imagine Apple releasing any significant car-related products in the near future. And that’s fine. The automotive field is moving quickly in some ways, but it will take decades to shift how the world interacts with cars. As Cook said, electrification is the future — we own an all-electric Nissan Leaf, and it’s far more fun to drive than any gas-burning car we’ve ever owned. It’s also far more economical and environmentally friendly because we power it from our own solar panels.
Brad Templeton makes the point that advances in self-driving cars may eventually render personal car ownership a thing of the past. Why spend tens of thousands of dollars on a car that sits idle 90 percent of the time when you’ll be able to use an iPhone app to summon a robotaxi to take you wherever you want to go? That would cause a precipitous drop in sales of cars to individuals and might spell the end of many carmakers. It would also, of course, eliminate the cost of human drivers from the equation at Uber and Lyft, which is why both companies are so interested in the technology.
So perhaps Apple is moving slowly on purpose, because Cook’s three vectors of change may combine to alter the face of the entire automotive industry before Apple could recoup a massive investment in building its own electric self-driving car. But, emotionally, I still want an Apple Car, and even though Apple would never give me a long-term review unit, it would at least be a business expense.