Apple Spent More Than $10 Billion on Apple Car Before Canceling Project

[MacRumors]

Apple spent more than $10 billion working on the Apple Car over the last decade, according to a report from The New York Times that details the issues the project faced during development. Apple first launched the project in 2014 and let it flounder for more than a decade before calling it off earlier this week.

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Money was spent on research and development, along with the thousands of Apple engineers and car experts that worked on the project. Some employees within Apple are said to have suspected that the endeavor was likely to fail from the beginning, and they referred to the car as "the Titanic disaster" instead of its "Project Titan" codename.

Apple CEO Tim Cook signed off on the project, but members of the car team knew that it was going to be close to impossible. An electric vehicle with self-driving capabilities would need to cost at least $100,000, and it would have razor thin margins and stiff competition.

While Apple reportedly held discussions with Elon Musk about a possible purchase of Tesla, the company decided that building its own car made more sense than attempting to integrate Tesla into Apple. Way back in 2014, Musk said that he had "conversations" with Apple, but he said at the time that an acquisition seemed "very unlikely."

Apple was never able to find the right leader for the Apple Car project. As we detailed in a look back at the Apple Car's history earlier today, the project had four different leads and was scaled up and scaled back several times over the course of the last 10 years. According to The New York Times, the ultimate reason that it failed was because Apple was simply unable to develop the software and algorithms for a car with autonomous driving.

The more than 2,000 employees that worked on the car project are being redistributed, some will join other teams at Apple to work on AI and other technologies, and some will be laid off. Apple will take what it learned from the car project and apply it to other devices like AI-powered AirPods with cameras, robot assistants, and augmented reality.

More on the downfall of the Apple Car and some of the technologies that Apple came up with can be found in the full The New York Times report.

Article Link: Apple Spent More Than $10 Billion on Apple Car Before Canceling Project

 

[Avatar74]

iPhone sales flat. Car cancelled. AVP better knock it out of th--

Never mind.

 

[jooish]

Other than paychecks, I'd like to see what $10b and a decade of work amounted to.

 

[rictus007]

Maybe this will be a good example of a "Sunk cost fallacy" - so good for apple

 

[Eso]

Their yearly profit is about $100 Billion, so keep that in mind for comparison.

 

[Eriamjh1138@DAN]

Woof. That's a lot to have very little to show for it.

I know Tesla had gotten to as low as $10B in losses before they turned the corner and became structurally profitable and now are lifetime-net profitable, but to burn through $10B and have nothing but carplay to show for it...

 

[cheesygrin]

Think how much more sensibly priced their actually shipping devices could have been if they hadn’t wasted all that on the doomed-from-the-beginning car project.

 

[Antoniosmalakia]

Their yearly profit is about $100 Billion, so keep that in mind for comparison.

I knew my overpriced SSD upgrade was paying for something (nothing).

 

[Avatar74]

Think how much more sensibly priced their actually shipping devices could have been if they hadn’t wasted all that on the doomed-from-the-beginning car project.

Wasted all what? 1/400th of their annual revenue?

Also despite what Reddit would have you believe, that's not how pricing works. Pricing is not a function of COGS. It's a function of what the market will bear.

 

[dannyyankou]

"People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully."

- Steve Jobs

 

[NT1440]

I don’t think this is necessarily a bad thing. Given the types of patents that have been a result of the initiative it seems like Project Titan at some point started functioning as a Basic R&D lab. Think Bell Labs or Palo Alto Research center.

Apple has been patenting some really cool stuff across a whole range of areas that while were dreamt up in the context of a car, can definitely apply to a whole host of different areas.

https://www.patentlyapple.com/autonomous-vehicle-technology/

Smart fabrics being just one area that comes to mind…

 

[sevoneone]

Tim said: "Make me a car, or make me a new device with a starting price that is as much as a cheap used car."

This is where we are now.

 

[TechnoMonk]

The way Rvian and Lucid are losing Millions/Billions in a quarter, Apple was smart to pull the plug. Rivian is losing few tens of thousands of dollars on every sale. EV market is Tesla, pretty much all others are pulling back and losing money.

 

[cjboffoli97]

Other than paychecks, I'd like to see what $10b and a decade of work amounted to.

Well first of all, every penny of that is a deductible expense for a company that makes $1 billion a day in revenue. Then there are the hundreds of patents that Apple has published on car-related technologies. They'll easily make that money back. But in the meantime, again, it's equivalent to less than two weeks of revenue. Loose change in the sofa cushions.

 

[nikhsub1]

Peanuts and all a write off. No big deal.

 

[Thunderstrike76]

I have nothing to back this up with but I feel like Tim may have been talked into this by Jony Ive. This feels like a Jony Ive project wanting to show he was just as capable as Steve to guide the future of Apple. The problem with making a car is its a lot more than just design. I don’t miss Jony nearly as much as I thought I would when he left.

 

[hieranonymous]

A good chunk of that R&D went into artifical intelligence, so at least that aspect of Project Titan is salvageable.

 

[lysingur]

Apple was never able to find the right leader for the Apple Car project.

This fact underscores the significance of visionary leadership and perseverance in monumental projects, which the person at the helm at Apple has neither.

It also makes the achievements of Elon Musk and Tesla all the more amazing. They got it done for less than 10 billion in less than 10 years.

 

[klasma]

The original article is well worth reading: https://archive.is/9hYOJ

 

[Surf Monkey]

The Times article does not paint a pretty picture of Apple’s ability to innovate in the post Jobs era.

 

[Lift Bar]

According to The New York Times, the ultimate reason that it failed was because Apple was simply unable to develop the software and algorithms for a car with autonomous driving.

Autonomous cars excel in closed circuits with other autonomous vehicles, similar to how computers are adept at playing chess within the confines of a board and rules.

No amount of software or algorithms can fully overcome the infrastructure challenges of the real world.

Nice to know I would have saved Apple $10B, but they didn’t ask.

 

[jvchappy]

Pwease can I haz some apple product dev money to **** around with?

 

[lysingur]

Wasted all what? 1/400th of their annual revenue?

Also despite what Reddit would have you believe, that's not how pricing works. Pricing is not a function of COGS. It's a function of what the market will bear.

10 billion is a lot considering Apple paid slightly north of 20 billion in taxes.

 

[klasma]

Think how much more sensibly priced their actually shipping devices could have been if they hadn’t wasted all that on the doomed-from-the-beginning car project.

Given that they make ten times that amount in just one year … 1% lower prices?

 

[Surf Monkey]

A good chunk of that R&D went into artifical
intelligence, so at least that aspect of Project Titan is salvageable.

The reporting around this is so vague that we can’t really say with any confidence what they were actually doing. “AI” isn’t a job description.