Ten years of hard work have been put into practice, Apple has given up "making cars", can the "technology dream" continue?
A few days ago, well-known technology journalist Mark Gurman revealed on social platforms that Apple will cancel a decade-long and billion-dollar car manufacturing plan, and some employees will be transferred to the artificial intelligence department.
According to people familiar with the matter, Apple's chief operating officer Jeff Williams and Kevin Lynch, vice president in charge of car manufacturing projects, have announced the decision internally, whether it is for the new energy vehicle industry or the consumer electronics industry, the matter is no less than a "depth charge".
After the news was released, it was not only Apple's internal employees and relevant industry insiders who were shocked, but also the current major "car-making" giants, and the founders of Tesla, Ideal, and Xiaomi all commented on the matter.
But after the shock, everyone is more curious, perhaps if Apple does not build a car, who will be the biggest beneficiary? Apple's strong man has a broken arm, how will it be laid out next?
Apple's dream of ten years of hard work has been shattered
After the news of Apple's abandonment of car manufacturing was reported, Tesla CEO Elon Musk reacted the most quickly, and he immediately posted the relevant news on his social network, with two emojis: salute and smoking. Many industry insiders believe that the two tigers in the United States are competing, and Musk is relieved?
Next, a number of domestic new energy vehicle industry bigwigs also responded on social platforms. Li Xiang, CEO of Li Auto, said that it is definitely the right strategic choice for Apple to give up making cars and choose to focus on artificial intelligence.
He Xiaopeng, CEO of Xiaopeng Motors, and Lei Jun, chairman and CEO of Xiaomi Group, both posted "surprised", Lei Jun even said that he knew that it was not easy to build a car, and at the same time secretly sold an advertisement for his own car, saying that he would seriously build a good car for rice noodles.
Of course, whether or not he has built a car by himself like Lei Jun, I believe that consumers who have witnessed how the domestic new energy vehicle industry has involuted in recent years understand that it is not easy to build a car, and it is even more difficult at this juncture.
But the reason why Apple gave up making cars is particularly regrettable, or because its car-making plan "Titan Plan" has been laid out for ten years, and it can even be said that the "Titan Plan" that began in 2014 was earlier than the emergence of the three major domestic new power brands, but Apple has not been out of the card and missed the best entry node.
One of the important reasons is because Apple is constantly vacillating in the direction of car building. In 2014, Apple officially launched the "Titan Project", a car-building program, and it is reported that Apple recruited more than 1,000 automotive experts and developers at that time, forming a top team in the industry.
Apple initially had high hopes for the car, and Cook has said that he expects the Apple car to be like the Mac and iPhone to create a product that completely disrupts the current industry. Apple, which has once started "disruptive innovation" in the consumer electronics industry, seems to want to create another "iPhone 4 moment" in the automotive industry.
According to the renderings of the suspected Apple car leaked by the "Titan Project", the vehicle looks like a big mouse, and there is no steering wheel or accelerator in the car, but it is equipped with L5 level automatic driving, and the price is about 120,000 US dollars. It is conceivable that if such an Apple car can really be mass-produced, its innovation is estimated to surpass the current smart car industry by 5-10 years.
But perhaps it is precisely because the concept is too advanced that the Apple car has not been launched for a long time, but it has "bounced" again and again. Apple's progress in building a car is not as expected, it may be that Apple overestimated itself and underestimated the difficulty of building a car.
As early as 2016, there was a disagreement within Apple about whether to do autonomous driving or assisted driving. In the next few years, Apple Auto switched between these two directions repeatedly, for example, before 2019, the outside world thought that Apple Auto would focus on the software direction, but in 2019, Apple acquired a startup that designed a self-driving shuttle service.
According to incomplete statistics, since 2014, the "Titan Project" has ushered in at least five leaders, including engineers from traditional car brands, former Tesla executives, and even designers of Apple Watch. Persons in charge of different industries and backgrounds naturally have completely different views on car manufacturing, and the frequent replacement of persons in charge has indeed brought some negative effects to Apple Auto.
In March 2022, Ming-Chi Kuo, an analyst at Tianfeng International, broke the news, saying that the Apple car team has been disbanded for a period of time, and if Apple still wants to achieve mass production of cars in 2025, it needs to reorganize the team as soon as possible.
In January of this year, Apple's car construction is still unclear, and there is news that Apple's car may "skip the ticket" again, postponed from 2025 to 2026 at the earliest, and then 2028, and the self-driving technology has also been reduced from the previous L4 to the L2+ level.
The abandonment was to be expected
In fact, when the launch of the Apple car was postponed again, there was basically not much to expect from the market. At present, new energy vehicles are in such a fierce competitive environment, Apple cars are not only late but also downgraded, with L2+ assisted driving, how to fight through the many new energy vehicle brands that may have been upgraded to autonomous driving in two years?
In fact, in addition to the repeated horizontal jump in the direction of car manufacturing, there is a lack of professional ability to produce complete vehicles; The advancement of autonomous driving technology is not as expected, and the profitability of anxiety year by year has made Apple "retreat step by step" in its car-building plan.
Industry insiders said that Apple has been in contact with BMW, Daimler, Toyota, Volkswagen and other fuel car companies, but most car companies do not want to become Apple's foundry.
In addition, the road test effect of the Apple car is not as expected, not only the road test mileage did not meet the target, but also the occasional accident news in the past few years, which confirms that Apple's self-driving software has not yet reached the level of reassurance.
Of course, what worries Apple even more is the stock price and the continuous decline in performance. In November last year, Apple announced its fourth-quarter fiscal year 2023 earnings report, and its revenue continued to decline for four quarters, and it was not until the first quarter of fiscal 2024 that revenue increased slightly by 2%. And in 2023, Apple's stock price is at the top of the list, but it is far worse than other big tech peers.
It is true that Apple's earning power is still very strong, but at the moment of rapid change in the consumer electronics industry, especially in the context of Huawei's return to the market and other mobile phone brands have become high-end and AI, the gap between Apple and other peers is narrowing.
However, Apple still has to increase its investment in Apple's car, and in this case, Apple's investment in the field of artificial intelligence is relatively scarce. Apple cars can't be built, artificial intelligence can't tell new stories, and Apple's stock price is naturally difficult to have bright spots.
Therefore, at this time, Apple announced that it would give up building cars, perhaps as Li Xiang said, it was an absolutely correct decision. On the one hand, the domestic new energy vehicle market is in a fierce melee, and the ups and downs of the first war have repeatedly dragged down the profit margin of the entire industry, and even Tesla has had to reduce the gross profit margin from 25% to 18%.
But Apple has always been doing a "high gross profit" business, the gross profit margin of an iPhone is about 45%, this account is calculated, Apple's car is naturally not cost-effective. But if Apple adjusts its direction to build high-end cars, taking Porsche as an example, its annual sales are about 300,000 units, and such a sales scale is like chicken ribs for Apple.
On the other hand, if it jumps out of the Chinese market, it will be difficult for Apple to find a market in the world that can accommodate the "new energy vehicle dream".
For example, in Apple's hometown of the United States, there are not only Tesla and Ford, but also the market demand for new energy vehicles has not kept up. At the end of last year, more than 4,000 U.S. auto dealers sent a joint letter to the U.S.** asking to slow down the pace of electric vehicle rollout, because the charging infrastructure in the U.S. market is not perfect, and new energy vehicles can no longer be sold.
However, although Apple has given up making cars, the new energy vehicle industry still needs Apple. As Li Xiang said, the electrification of cars is the first half, and artificial intelligence is the final.
In fact, almost all of the leading automotive companies today have adopted Apple-inspired technology methods to control car systems through smart touch screens, and Apple's CarPlay system has also landed on many car brands. In the next era of electric vehicles, which are largely software-driven, Apple will not be absent.
Generative AI
Therefore, Apple has to focus on artificial intelligence now. Judging from the market news, Apple has fallen slightly "behind" in generative AI at present.
Last year, many smartphone manufacturers, including Huawei, Xiaomi, OPPO, vivo, and Samsung, have released artificial intelligence models, but Apple is the only mainstream mobile phone manufacturer that has not officially released a large model product.
Cook has said that Apple will apply AI to more products, but it needs to be deliberate. In this way, Apple is not unprepared.
In July last year, Bloomberg reported that Apple had built its own large language model, ajax; At the end of last year, Apple released an article mentioning that Apple could successfully deploy LLMs on iPhones and other Apple devices with limited memory through an innovative flash memory utilization technology.
At present, most mobile phone manufacturers have developed their own large models, but due to the limited memory processing capacity of mobile phone memory, large models cannot be moved to mobile phones, but run in the cloud. The advantages of the cloud large model are the large scale of parameters and high computing power, but it is difficult to guarantee information security 100%.
Through Apple's flash memory utilization technology, it is expected to greatly improve the computing speed of CPU and GPU, that is, to allow large models to really land on mobile phones.
If you think about it from this point of view, Apple's "temporary absence" in terms of large models has more far-reaching considerations, not only technology, but also technology implementation.
First, so far, the commercialization prospects of large models are still unclear, and domestic manufacturers are scrambling to release large models, which are more in the category of arms race. However, for Apple, which has a relatively solid market share, the development of large models still needs ecological soil to nurture in the end, which may be the reason why Apple hopes to further improve the practicability of large models.
Second, after the continuous development of the large model, its carrier will inevitably be more than just mobile phones, which is why Apple has invested a lot of energy in the research and development of new hardware products, Vision Pro. Recently, Apple's smart ring has also been approved by the news, and Apple's desire to build the next generation of AI hardware has become very obvious.
In the field of smart cars, Apple led the project for 10 years with a forward-looking look ahead of the times, and finally the forward-looking lost to reality, and the smart car market grew rapidly in an unexpected way, which became the reason why Apple had to abandon this project.
But in the field of consumer electronics, Apple, which still has absolute control, seems to want to relive the "iPhone 4 moment" again. For a tech giant, the management of profitability and market value is important, but perhaps only dreams are the key to supporting Apple all the way.