Jony & Tim's Joyride
Following this week's huge (and yet not at all shocking) revelation that Apple was dismantling their car project for good, Brian X. Chen and Tripp Mickle dug up a few new details about what may or may not have happened throughout the years. First, let's push the clock back to 2014:
At the time, the company was dealing with questions from its top engineers about its next project, according to three people familiar with the project’s origins. It had just finished the Apple Watch, and many engineers were restless to begin work on something new. Tim Cook, Apple’s chief executive, approved the project in part to prevent an exodus of engineers to Tesla.
Apple also needed to find new ways to expand its business. The company was anticipating that sales of iPhones would slow in the coming years. Cars were part of a $2 trillion transportation industry that could help Apple, which by then was a nearly $200 billion business.
The latter is undoubtedly true, in fact, that was my exact angle about the project almost a decade ago: "it would be weird if Apple weren't working on a car". Because, yes, few potential projects could seemingly move the needle for Apple after the incredible success of the iPhone – one of the, if not the, best business of all time. The car industry was (and remains) massive. The margins aren't typical of Apple, but if they could scale luxury, perhaps...
Apple is now nearly a $400B business (in yearly revenue). And the iPhone itself is a $200B business. Apple has scaled thanks to expanding the iPad, rejuvenating the Mac, adding Apple Watch and AirPods, and actually hugely thanks to Services revenue, which nows stands at $85B. But again, the business is still driven by the iPhone. And the Vision Pro will not be moving any needles anytime soon.
The former point above strikes me as odd. I get wanting to have exciting new projects to keep people engaged, but would that many folks really have bolted to Tesla? How many actually had skillsets Tesla wanted/needed? Certainly some, but as this article notes later on, Apple had to hire a huge amount of outside talent to work on their own car project because they didn't have such people in-house.
Also strange:
Despite having a vote of confidence from Apple’s chief executive, members of the team knew they were working against harsh realities, according to the six employees familiar with the project. If it ever came to market, an Apple car was likely to cost at least $100,000 and still generate razor-thin profit compared with smartphones and earbuds. It would also arrive years after Tesla had dominated the market.
"And earbuds"? Do they mean Earpods? You know, the wired ancestors of AirPods. Because AirPods wouldn't be released for another three years or so. Maybe they mean Beats, which was acquired the same year, 2014, when "Project Titan" started? But you'd probably say "headphones" and not "earbuds". Earpods, I'm sure had great margins, but must have been tiny from a revenue perspective, since most people who owned them did so because they came with the iPhone. It's honestly probably an error to include that word – like they thought AirPods were a great business for Apple even back then, when they didn't actually exist back then. Weird.
Moving on...
The company held some discussions with Elon Musk about acquiring Tesla, according to two people familiar with the talks. But ultimately, it decided that building its own car made more sense than buying and integrating another business.
This is the bit being shared the most here, but this was already pretty widely known – thanks to Elon Musk himself. I suppose this meeting pre-dated the distress signal Musk sent to Tim Cook in 2017 when the Tesla 3 was in "production hell" but he undoubtedly did that because the two sides had spoken before.
From its inception, the project was troubled by differing views on what it should be, the people familiar with it said. Steve Zadesky, who initially led the effort, wanted to build an electric vehicle that competed with Tesla. Jony Ive, Apple’s chief design officer, wanted to pursue a self-driving car, which members of the software team said could be done.
Interesting that Ive was one of the ones pushing for self-driving versus building a better Tesla. Ive is a well-known car guy. Perhaps he felt Apple should leave the "traditional" car form factor to the pros and try to build something completely new. To that end:
Mr. Ive and his team of designers drew concepts for a car that would look like a European minivan such as the Fiat Multipla 600, which has a half-dozen windows and a curving roof. It had no steering wheel and would be controlled using Apple’s virtual assistant, Siri.
Think different, indeed.
One day, in the fall of 2015, Mr. Ive and Mr. Cook met at the project’s headquarters in Sunnyvale, Calif., for a demonstration of how the car might work. The two men sank into the seats of a cabinlike interior. Outside, a voice actor read from a script of what Siri would say as the men zoomed down the road in the imaginary car. Mr. Ive asked Siri what restaurant they passed and the actor read an answer, said two people familiar with the demonstration.
I, for one, would sign up for this Tim & Jony Show. New Apple TV+ project? In all seriousness, this is clearly the product in this space that Apple aspired to build. Not just a better Tesla. A product which would truly change the game. An iPhone to make the Tesla look like the BlackBerry (which did, people forget, make the flip phones of the day seem prehistoric). Alas, it would seem the closest they got to that vision were the bucket seats and the actors reading cue cards.1
But by 2016, it was clear that the car effort was in trouble. Mr. Zadesky left Apple, and his successor, Mr. Mansfield, told the team working on the project that they would be shifting their focus from building a car to building self-driving car software, said three people familiar with the shift.
This always struck me as odd. Why on Earth would Apple move on from a key consumer product to software which would be used in other company hardware? This just doesn't sound like Apple at all. CarPlay is different since it leverages the iPhone – your iPhone – in the car. This is more like the ROKR model? And that was clearly just a bridge until Apple completed the iPhone.
Two more leaders took over the car effort in the years that followed. Doug Field, a former Tesla executive, laid off more than 200 employees on the project as he leaned into efforts to build its self-driving system. Then Mr. Lynch, who succeeded him in recent years, reversed the company’s plans and went back to its original idea of making an electric vehicle.
My god, such whiplash. Fascinating that the reaction across the board here, from the press to former insiders to analysts to Wall Street, seems to be applauding this move to finally kill off the car. A legit "finally".
Apple’s dead car project will be survived by its underlying technologies. The company plans to take what it has learned about artificial intelligence and automation and apply it to other technologies that are being researched, including A.I.-powered AirPods with cameras, robot assistants and augmented reality, according to three people briefed on the projects.
On no, here's that "AirPods with cameras" notion again. But I'm all for some Apple robot assistants. Assuming that they can actually make Siri useful, that is.
1 I'm sure that's not entirely fair. There simply must have been a lot of cool tech that this team developed, but was never able to ship because the vessel wasn't there. The NYT notes a "windshield that could display turn-by-turn directions" and "a sunroof that would feature special polymer to reduce heat from the sun", both undoubtedly could be sold or licensed to other carmakers, but to what end? And I can't wait to hear what else such teams created. One day we'll hopefully get a great Who Killed the Apple Car? doc.