Was that a big sigh of relief heard blowing from Michigan across the Great Plains and dissipating somewhere over California? Apple reportedly has dramatically scaled back its automotive ambitions, according to Bloomberg, and certainly in traditional automotive strongholds such as Detroit—as well as Tokyo and Frankfurt—this has got to be a welcome reprieve.
Apple apparently has decided to refocus its automotive efforts on developing an autonomous-driving system that gives the company the flexibility to partner with existing automakers or return to developing its own car in the near future, according to the publication. This means that for now, Apple’s much-feared Project Titan has given up its initial goal of coming up with an all-new Apple-model electric car—a prospect that had traditional automakers shaking in their seats.
In fact, Apple has begun cutting hundreds of jobs from the Project Titan team of about 1,000 people and redeploying resources away from the automotive effort because of the challenges of coming up with its own automotive supply chain and other obstacles that traditionally have provided a high barrier to entry to any company wanting to join the ranks of the modern automaker.
Apple had imagined an electric car that could recognize its driver by fingerprint and autonomously navigate with the press of a button, Bloomberg said. One plan sought a partially autonomous car that still had a steering wheel and pedals, while later plans migrated toward a fully autonomous vehicle.
“For a quality Apple-branded car they could probably get a healthy margin,” Eric Paul Dennis, an analyst at the Center for Automotive Research, told Bloomberg. “They probably weren’t willing to compromise on quality issues” because that could hurt the well-earned reputation of Apple’s other products.
In any event, score one for Big Auto. The Detroit Three automakers and their Japanese, Korean and German rivals have been losing ground steadily over the past several months, it seems, to digital-tech interlopers such as Google and Uber, which have been beefing up their presence in self-driving initiatives that threaten the very existence of automakers.
In turn, auto brands have been partnering with and acquiring Silicon Valley companies to help their own pivots into mobility services and automated driving. Ford has been among those most notably steering the company heavily into services such as ride sharing.
Existing auto engineering, design and manufacturing redoubts in Michigan, Tennessee and the Southeast have been increasingly threatened by all of these developments. In fact, General Motors CEO Mary Barra lately has been noting Detroit’s woes with a “brain drain,” and the Wall Street Journal just reported on the general difficulties being faced by manufacturers in Flyover Country in attracting and retaining software developers while competing with the tech firms on the coasts.
“The whole Facebook, social media thing is a big suck on talent” Chetan Kapoor, an executive for Yaskawa America, a robot-maker based in Austin, Texas, told the Journal.
Maybe Apple executives have recognized that there are some things they can’t do as well as existing companies. Or maybe they’re just waiting to see how this tumultuous era of self-driving advances takes shape. They may end up partnering with some of the car companies that, today, are relieved that Apple has bowed out of car-making.
In any event, consider Apple’s move a win for current auto brands.