After giving up building cars, Apple began to "use the knife" against its own car team.
The BBC reported on April 5 that Apple laid off more than 600 employees due to the suspension of the self-driving electric vehicle project. According to reports, the layoff decision will take effect on May 27.
Why is Apple's car "unfinished"? Giving up making cars, is Apple playing this "chess" well?
Why is the Apple car "unfinished"?
Apple's history of building cars dates back to 2014. Since 2014, Apple has reportedly poured about $1 billion a year into R&D funding for car projects.
Over the past decade, Apple's in-house automotive team has undergone several restructurings and strategic adjustments, experimenting with five different major designs and always looking for a way forward. By the end of 2019, Apple had "poached" more than 300 people from Tesla.
Later, due to Apple's repeated vacillations on the route and direction of car manufacturing, and the delay in the implementation of cooperation objects and forms, a large number of executives involved in the "Titan Project" left, and the project was stalled several times.
Some industry experts believe that there are two main reasons for the "unfinished" Apple car:
On the one hand, compared to Apple's "old business" high-end consumer electronics, car manufacturing is a low-margin industry that requires a lot of investment. Therefore, Apple does not need to spend a lot of energy to build a car.
Zhang Xiang, a researcher at the Automotive Industry Innovation Research Center of North China University of Technology, said in an interview with China News Service that Apple's cancellation of the self-driving car project and its eventual withdrawal from the car-making industry are mainly due to the fact that the current auto market is not the same as ten years ago.
"Apple currently has an absolute dominance in the smartphone and digital product space, and the profits from selling iPhones and other digital products are considerable. But if Apple decides to go all-in on the auto industry, it is likely that it will not be able to reap the same high returns as digital products such as smartphones in the short term. Zhang Xiang said.
He believes that at present, the stock prices of many new car-making companies have fallen, and most of them are in a state of loss. In addition, the automotive industry currently has problems such as low capacity utilization and serious homogenization, and car manufacturers are facing huge risk of failure and investment pressure.
Another reason is that Apple has not clearly determined what type of car it wants to make. Apple's car project has different goals and ideas at different stages, which can be described as "scattering skill points".
Apple's original vision was to make the car a "mobile living room" that would free the driver and make it an extension of how people live and work.
However, in 2019, Apple's goal has shifted to building a passenger car that breaks through battery technology, and it plans to use Apple's own LiDAR technology.
Entering 2022, Apple revealed that its vision is to build a "car without a steering wheel and pedals that can achieve full self-driving (Level 5)".
In an interview with China News Service, Guo Yining, a car blogger "Lao Guo Machinery Bureau", pointed out that Apple is not incapable of making cars, but that it is unable to develop subversive car products. He believes that Apple does not currently need enough technology to achieve its goal of making an industry-disrupting automotive product.
Guo Yining, for example, said that the "Titan Plan" proposes models without steering wheels and pedals, but it is still unclear when such models will be supported by regulations. He pointed out that the degree of openness of regulations in various countries also has certain constraints on autonomous driving technology. As a result, it is difficult for Apple to achieve clear commercialization results with the time and resources it has invested in the automotive manufacturing sector.
Is Apple really not touching the car business?
Although Apple has halted the "Titan Project", this does not mean that Apple has completely withdrawn from the automotive supply chain.
Back around 2010, automakers and their suppliers were ready to develop complex applications on the car's center console, no longer content with acting as a CD player and a miniature LED screen.
Since then, Apple has seized on this wave and launched the CarPlay configuration in 2014, which integrates the Apple phone with the car dashboard. Since then, CarPlay has become increasingly popular in new cars. According to incomplete statistics, more than 80% of the new cars sold in the world currently support CarPlay.
CarPlay itself doesn't require the consumer to pay for it. This is because car companies with CarPlay functions help consumers pay this part of the money. A report written by Citi analysts has estimated that CarPlay will add $2 billion to Apple's service revenue, and may even exceed Apple's paid music, Apple Music.
In June 2022, Apple released a new generation of CarPlay, which basically takes over the main functions in the car. Not only can it be optimized for a variety of in-vehicle screens, but it can also support every screen in the car, including the dashboard.
Zhang Xiang believes that although Apple's progress in the field of car manufacturing has slowed, CarPlay is indeed a very successful product in car connectivity technology at present, and it will still be strong in the next five years.
Is the transition to AI a good move?
In the recent layoffs, Apple highlighted that many of the members who were originally involved in the automotive project will be transferred to the AI department led by Apple's senior vice president to focus on generative AI projects.
Apple CEO Tim Cook said earlier this year that the company planned to disclose more about its plans to put generative AI to work later this year, adding that the company was making "significant" investments in the space.
Is it a good move for Apple to transfer the team members of the car building team to the AI department?
Apple is currently under tremendous pressure in the field of artificial intelligence. Apple has been slow to roll out generative AI compared to rivals Microsoft and Google, which are already incorporating AI into their products. Judging from the several artificial intelligence applications that Apple has announced so far, it is clearly behind several major tech giants.
The bosses of domestic new power car companies also expressed their views.
🔹 Source: Screenshot of Lei Jun's personal Weibo account
🔹 Source: Screenshot of Li Xiang's personal Weibo account
Li Xiang, the founder of Li Auto, publicly responded on Weibo that Apple's decision to give up building cars and choose to focus on artificial intelligence is an absolutely correct strategic choice, and the timing is also appropriate. He also bluntly said that the electrification of cars is the first half, and artificial intelligence is the final.
Column Editor-in-Chief: Qin Hong Text Editor: Cheng Pei Title Image Source: Xinhua News Agency Photo Editor: Cao Liyuan
Source: Author: The country is a through train