Apple has finally killed the car project.
In the early morning of February 28, Beijing time, Bloomberg reporter Mard Gurman broke the news that Apple had halted the car project. After 10 years and billions of dollars invested, Apple's electric car is expected to be put on the market again and again, and now it has finally come to an end.
The old players in the electric vehicle industry are eating melons in the front row. Tesla CEO Elon Musk (Elon Musk) on the social platform ** message, accompanied by "salute" and "cigarette" emojis. Li Xiang, CEO of Li Auto, also posted a Weibo post, praising Apple for making an "absolutely correct strategic choice".
One notable point is that as the automotive project winds down, in addition to the hundreds of hardware engineers and automotive designers, many of the team's employees will be transferred to the AI department to focus on generative artificial intelligence (AIGC) projects. It is said that the number of employees in the automotive project is around 2,000.
The end of the car project and the transfer of personnel to the AIGC project are another proof of Apple's increase in AI.
Since ChatGPT came out at the end of 2022, tech giants have also joined the arms race of AI. Apple, as the world's most valuable company, is a little low-key in the field of AI. In fact, Apple has been in the AI field for many years, and in the past year, it has repeatedly raised the priority of AIGC projects.
In recent months alone, Apple has unveiled several innovations, such as Hugs, which builds animated avatars from clips, MGIE, which edits images based on text, and Keyframer this month, which allows users to add action to 2D images with descriptions. Previously, foreign media said that Apple had internally tested the Q&A tool ask. The most anticipated is the application of AIGC on smartphones, and multiple sources say that Apple will provide some kind of AIGC function on smart terminals by the end of 2024, and it is very likely to launch AI-reshaped Siri.
Apple CEO Tim Cook also broke his silence, saying at the company's Q1 2024 earnings conference earlier this month that Apple would announce new AI features this year.
Apple CEO Tim Cook
AI is already flying in the sky, "one day in the sky, one year on the ground", the time has come to 2024, nearly 15 months after the launch of ChatGPT, and AI is still in the fast lane. Just nearly 10 days ago, OpenAI announced the latest "King Fried" Wensheng ** product Sora, adding another fire to AIGC. Stability has followed suit by opening its Stable Video to public beta, and Midjourney, another heavyweight company in the field of Bunsen graphics, has also revealed that it may update the relevant features in its next version.
Even Apple's shareholders are a little overwhelmed. At the same time as the news of Apple's decision to halt the car project, the Financial Times reported that two major Apple shareholders, Norway Bank Investment Management and Legal & General, two major Apple shareholders, have pressured the company to disclose its AI plans.
Apple, with a market value of 3 trillion yuan and a cash flow of nearly $200 billion, can't afford to play with cars? Not necessarily. It's probably a trade-off.
Apple's AI "big move" has been held back for too long, and the outside world is expecting to accumulate continuously, and on the ruins of the car, the AI flower is waiting to open.
Apple's abrupt halt to the car project was unexpected, but it was also reasonable.
Employees revealed that the meeting to end the car project lasted only 12 minutes.
The meeting, chaired by Apple's chief operating officer, Jeff Williams, and Kevin Lynch, Apple's vice president in charge of the project, did not answer any questions, except to announce: the car project was halted, all work will be suspended, some employees will be transferred to the AIGC project, and others will have 90 days to look for new positions within the company or be fired.
12 minutes and 10 years don't seem commensurate.
Apple's car project, which began in 2014 and is internally known as Project Titan, aims to build a fully autonomous electric vehicle with a limousine-like interior and voice navigation. At one point, the number of people involved in the project reached 5,000.
It was a time of optimism for electric vehicles. Cook said at a conference in 2015 that he wanted people to "enjoy an iPhone-like experience in cars," Google founder Larry Page said that robotaxis could be "bigger than Google," and Musk said in 2016 that "fully autonomous driving will be possible in less than two years."
Elon Musk
But the project struggled almost from the start, and the team changed leadership and strategy several times. By 2021, people had already sniffed out the big problems with the Apple car project, which was the year that Doug Field, the head of the Titan Project who had been fighting for Tesla and Apple for many years, jumped ship to Ford Motor and Williams and Lynch took over the project. And that was the fourth time in 7 years that Apple Auto had ushered in a change of project leader.
Apple has considered many different EV exterior designs, but beyond that, breakthroughs in self-driving technology are always the most difficult problem. Since 2017, Apple has been road-testing its systems with a Lexus SUV exterior, and has also tested more secret components on a giant track.
For years, Apple Car has been telling the story of "the wolf is coming", delaying the launch of the product several times.
In 2024, Apple is facing a cooling electric vehicle market. In recent months, car sales growth has lost momentum due to the reluctance of mainstream buyers to switch to battery electric vehicles due to the high level of ** and the lack of charging infrastructure. General Motors and Ford are focusing on producing more hybrid vehicles after facing weak demand for electric vehicles and manufacturing bottlenecks. Automakers across the industry are slashing battery EVs**, production targets, and profit expectations.
Even Tesla has warned that the pace of its expansion has "slowed significantly" this year. According to UBS**, U.S. EV sales growth will fall to 11% this year from 47% expected in 2023.
Just a month ago, Bloomberg reported that the Apple Car project had reached a make-or-break point. But the latest plan discussed within Apple is to delay the release of the car until 2028 and reduce the self-driving technical specifications from L4 to above L2. Executives are concerned that the latest target price of about $100,000 will deliver the usual high profit margins on Apple products, and the board is concerned that the company will continue to spend hundreds of millions of dollars a year on a project that will never see the light of day.
For employees, short meetings and huge decisions can feel sudden. But executives who chaired the meeting didn't see it as sudden, saying the decision to end the car project was driven by changing priorities.
When it comes to Apple's immediate priorities, AI outperforms the car.
Apple is not an AI "newbie village" player. Back in the days of Steve Jobs, Apple acquired the natural voice software Siri for $200 million, and in 2011, Siri was first introduced as Apple's software assistant.
Siri's debut surprised the world, and the little assistant that was always evoked in the iPhone became a novelty toy. But similar to the car project, Apple's internal strategy for Siri has been unclear, and there are many small tricks, but it has not been able to "work hard in one place". Over the years, Siri has repeatedly changed supervisors, and it has also evolved from a voice assistant in the Jobs era to an intelligent search assistant (I believe it is not difficult for old iPhone users to notice how often Siri returns search results instead of natural language answers).
In the following years, Apple has been trying to do AI while acquiring new companies and developing its own products. Until iOS 10 in 2016, Siri was no longer the "hope of the whole village", and Apple's AI strategy gradually became clear.
On the one hand, Apple has acquired all the way and is vertically integrated, and the company's scope covers semiconductor manufacturing, machine learning, facial recognition, expression tracking, etc.
On the other hand, both soft and hard,AIThe application is soft,Improve the experience of Apple products,If Apple map、The application of AI technology of input method is still not conspicuous enough,Then Vision Pro's eye capture plus gesture plus voice interaction,It is enough to make people feel the power behind AI。 In terms of AI chips, starting from A11 in 2017, Apple has stuffed the NPU of the neural network engine processing unit into the A-series chips, and has continuously improved its AI computing performance since then. The M-series chips are also becoming more powerful, citing more recent events, such as the M3 series chips announced last year, which introduce an enhanced neural network engine to accelerate powerful machine learning (ML) models, with a special emphasis on M3 MAX that can be used to develop AI software.
But Apple is too low-key after all. In 2023, ChatGPT will lead to a global AI wave, with Microsoft, Google, Amazon, Meta and other technology giants all openly and high-profile joining the battle, and the outside world has also begun to cast puzzled eyes on Apple.
In Apple's fiscal second quarter 2023 earnings report** conference in May last year, Cook barely mentioned the word AI, compared to 168 mentions by Meta, Google's parent Alphabet, Microsoft and Amazon during the same period. He only answered a question about AI once, saying that Apple believes that AI has "great potential" but that "there are still a lot of problems to be solved." Since then, Apple has emphasized that the technology has been seamlessly integrated into its hardware and software.
In fact, Apple's pace with AI has significantly accelerated.
In the summer of 2023, it was reported that Apple is developing Applegpt, which is benchmarked against ChatGPT. Later, Bloomberg said that Apple had built its own large language model, AJAX, and launched an internal Applegpt chatbot to test AJAX. At the end of the year, it was even reported that Apple was discussing licensing with large publishers and wanted to train relevant models with licensed material.
In November 2023, Cook was asked about AIGC again in the face of questions at the earnings conference, and admitted that "there are plans in this area, and investments are being made, and the intensity is not small".
In addition to the revelations of **, Apple has also made a lot of public innovations.
In December 2023, Apple announced** that it discussed its AIGC technology, Hugs, which can generate a digital doppelganger from a short **out of thin **out of half an hour). At the beginning of February this year, the Apple team open-sourced an image editing tool MGIE, which consists of a multi-modal large model and a diffusion model. In mid-February, Apple showed another AI animation assistant called Keyframer, which can make static images move with just one sentence.
Apple's external speech also went a step further, and in early February's Q1 2024 earnings conference, Cook said that AI is an important investment area for the company, and Apple will report on AI progress later this year.
Next, Apple's important node will be the release of iOS18 and iPhone16 this year, and the outside world expects the AI function of iOS18 to shine, and also expects iPhone16 to be an "AI phone". Bernstein analyst Toni Sacconaghi noted in an investor note that while the concept of an "AI phone" is somewhat ambiguous, Apple is expected to introduce a range of advanced AI features in the iPhone, including upgrades to image and capture and editing tools, real-time translation and transcription optimization, smarter Siri and Apple Music improvements. In addition, Saconaghi mentioned that Apple may further enhance the AI performance of the iPhone with the help of the next generation of 3nm A18 chips.
For the signs of Apple's increase in AIGC, the outside world is generally optimistic. After the news of the termination of the car project, Apple's stock price was about 1%.
Bloomberg analysts Anurag Rana and Andrew Girard said in a note: "We believe Apple's decision to abandon EVs and shift resources to AIGC is a good strategic move, given the long-term earning potential of AI revenue streams relative to cars." ”
Li Xiang posted on Weibo that "Apple gave up making cars and chose to focus on artificial intelligence is an absolutely correct strategic choice, and the timing is also appropriate", Zhou Hongyi posted ** to talk about this matter, bluntly saying that "(the United States) Every company must embrace AI, and if it does not embrace AI, it will be killed".
In the smartphone space alone, Google, Samsung, Honor, and others are all strengthening the AI capabilities of their latest phones. Peers have been dispatched one after another, dreaming of ushering in a "super cycle" driven by AI.
Kill the car, apple blossom blooms elsewhere.