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Save your condolences and send your congratulations on the death of AppleCar. Who needs an expensive, low-margin electric vehicle when you have vague hopes for AI?
After an ill-fated, decades-long odyssey, Apple has said goodbye to its car project and will direct resources to its artificial intelligence division. A blow to all those who wanted to see which generation Fiat 500 Jony Ive would pay homage to.
If the decision was an admission of defeat — Elon Musk responded to the news on X with a salute and a cigarette emoji — it didn’t feel like it. The collective reaction from many analysts and the market was close to “good riddance”.
Shedding the multibillion-dollar insurgency effort will allow Cupertino to focus on a broader AI strategy within Apple’s ecosystem, said Wedbush Securities analyst Dan Ives.
Others have pointed to the way Apple’s software and intuitive design have reshaped the car industry through CarPlay, the software that connects iPhones to cars, effectively outselling other companies. Turns hardware into an extension of its walled garden.
And leaving automotive ambitions to the realm of software means never having a 3,000-pound dented, muddy, and — most of all — rusty product tarnishing the world’s cleanest brand on the road. Or on the lawn. As long as the updates keep coming it will be forever new.
It took Apple so long to get away from the expensive gamble that the slowdown seems timely. New entrants have increased competition in the electric vehicle market, triggering price wars and squeezing margins.
Even Tesla, the EV king whose anti-Detroit rebellion inspired Apple’s automotive ambitions, has hit roadblocks. Slower demand expected in 2024 darkens the company’s outlook. And without Big Tech’s sprawling operations spanning multiple sectors, Tesla has fewer business lines to rely on. The stock is down about 20 percent so far this year. As improbable as Tesla’s rise is, its long-term success still depends largely on unproven autonomous technology.
The surprising growth of the Big Seven winners, namely Nvidia ( NVDA ), Meta ( META ), and to a lesser extent Microsoft ( MSFT ), further presses the question of why Apple should chase Tesla in the early days of developing AI tools. will Promised a lot.
Musk’s recent scramble to unlock Tesla’s AI potential has made Apple’s car exit even more compelling. CEO Tim Cook already has multiple avenues for intimate data collection and platforms to improve AI tools. Musk carts are parked outside. Cook screens surround you at night.
But there’s also something about the staff at the world’s most valuable company, and from its bold EV project to the trend of the moment, pursuing a fancier version of ChatGPT, or letting users dig deeper into them. There’s something dark about finding immersive ways to dive in. Couch You think “if you can’t beat ’em, join ’em” shouldn’t apply to an organization that has a package of hundreds of billions of dollars to solve a problem.
At the company’s annual shareholder meeting earlier this week, Cook said Apple would share details of its new AI features later this year. It’s not yet clear how AI will revive Apple’s growth story. But at least now we know where it won’t come from.
Hamza Shaban is a Yahoo Finance reporter covering markets and the economy. Follow Hamza on Twitter. @hshaban.
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