Apple waves white flag – scales back Project Titan car plans, focuses on developing autonomous tech

Apple’s dreams of making a full scale self-driving car seems to have stalled. Bloomberg reports that the iPhone maker has drastically scaled back its Project Titan, leading to hundreds of job cuts and a new direction that no longer includes building its own car, for now.

The report’s sources said that hundreds of members of the 1,000-strong car team have been reassigned, let go, or voluntarily left in recent months. Instead of making a full car, Apple’s car team will now focus on developing an autonomous driving system that gives it flexibility to either partner with existing carmakers, or return to designing its own vehicle in the future, the people also said.

Management has given the car team a deadline of late 2017 to prove the feasibility of the self-driving system and decide on a final direction, two of the people told Bloomberg. Apparently, this development comes after months of strategy disagreements, leadership flux and supply chain challenges inside Apple’s secret car development facility in Sunnyvale, California, a stone’s throw from its Cupertino HQ. Apple declined to comment.

Project Titan started with big dreams in 2014, and a hiring spree with a target of an Apple car by the early 2020s. The tech giant wanted to revolutionise the car market the same way the iPhone did to mobile phones in 2007. “The car is the ultimate mobile device, isn’t it?” Apple COO Jeff Williams said in 2015. CEO Tim Cook said that the auto industry was “at an inflection point for massive change.”

The report says that by the end of 2015, the project was blighted by infighting. According to insiders, managers battled about the project’s direction. “It was an incredible failure of leadership,” one of them said. Project head Steve Zadesky, a former Ford engineer and early iPod designer, left in early 2016. He remains at Apple and declined comment.

The car baton was passed to his boss Dan Riccio, whose engineering responsibilities include the iPhone, iPad, and Mac. In April, Bob Mansfield, a manager who helped develop the original iPad, returned to lead the team. About a month later, Mansfield announced the strategy shift to Titan employees, explaining that he had looked at the project and determined that Apple should move from building a Tesla competitor to an underlying self-driving platform. That led to a staff exodus.

The report says that remaining software engineers are working on autonomous programs, vision sensors, and simulators for testing the platform in real-world environments. The team also has regulatory specialists to navigate the heavily regulated auto industry.

What were the issues that led to Apple waving the white flag? The tech giant struggled to tackle complex automotive supply chains, according to someone familiar with the project. It’s used to big influence over suppliers and often secures exclusive rights to certain parts, and that’s impossible for a newcomer with initial small volumes to achieve in the car industry.

“When they started digging into the details of what that would entail it likely became an intractable problem,” said Eric Paul Dennis, an analyst at the Center for Automotive Research.

Another possible issue could be profit margins. It is pointed out that tech investors are used to big margins, in contrast to carmakers who survive on nett margins well below 10%. “For a quality Apple-branded car they could probably get a healthy margin. They probably weren’t willing to compromise on quality issues” because that could hurt the perception of its other products, Dennis added.

The carmakers we know and love – the Detroit Big Three, the Germans and the Japanese giants – will collectively heave a sigh of relieve now. “You thought that it was so easy, now you know,” a joint-statement would have probably read.

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