Apple’s self-driving car project shifts gears

According to reports, Apple's so-called Project Titan is now focused on the development of self-driving car technology instead of an actual car.

Though Apple [NSDQ:AAPL] has never publicly acknowledged it is working on a car, comments from numerous insiders as well as the tech giant’s recent poaching of senior auto industry staff suggest otherwise.

Sadly, the project, which has been doing the rounds under the code name Project Titan, may have just been nipped in the bud.

Bloomberg, citing people familiar with the matter, reports that Project Titan is now focused on the development of self-driving car technology instead of an actual car. This way, the people said, Apple has the flexibility to either partner with an established automaker (McLaren?) or return to developing its own car at a later date.

Two people told Bloomberg that senior Apple executives have given the Project Titan team a deadline of late 2017 to prove the feasibility of its self-driving technology so that a final decision on direction can be made. This change of focus has meant that hundreds of people hired to help develop a car have either been let go or reassigned. Project Titan is thought to still have around 1,000 staff around the globe.

Complexity, internal strife

News of an Apple car emerged in 2013 and by 2015 it was being reported that Apple might have a car on sale as early as 2019. However, according to Bloomberg sources, there was internal strife regarding the direction Project Titan should take, for example whether the car would still require a driver or if it would be fully autonomous.

The complexity of manufacturing cars, coupled with their low margins compared to what Apple’s investors are used to in the tech industry, may also have persuaded Apple to take a different route. Recall, senior Apple executives visited a BMW plant in 2015 to learn about car production.

There’s a lot riding on self-driving technology as it has the potential to disrupt the entire auto industry. For example, it could lead to a change of the standard business model for automakers where revenue is generated from offering rides instead from actually selling cars—and Apple has already invested $1 billion in Chinese ride-sharing giant Didi Chuxing.

Most of the major automakers are working to develop self-driving technology, as are ride-sharing firms and Apple’s main rival Google. Success may be vital for the automakers, because in a world where people choose on-demand rides instead of private car ownership, traditional car brands may no longer matter.