Apple Inc. has decided to abandon plans for a self-driving car, giving up on potentially billions in revenue and the opportunity to sell what could have been seen as “the ultimate mobile device.” The company reached this decision after months of deliberation, opting to focus on generative AI and mixed-reality headsets instead. The move was met with approval from investors and analysts, who believe that shifting resources towards AI is a more profitable long-term strategy compared to entering the electric vehicle market, which has become increasingly challenging.
The decision to forgo the self-driving car project was communicated to employees in a meeting led by Chief Operating Officer Jeff Williams and project head Kevin Lynch. The approximately 2,000-member team was informed that Apple’s future will not revolve around selling high-priced cars with autonomous features. Instead, the company will concentrate on catching up with competitors in the generative AI industry, where chatbots from companies like OpenAI and Google have gained popularity. Additionally, Apple plans to focus on turning the Vision Pro headset into a mainstream success, despite it being a relatively new product.
While the move away from the self-driving car project is seen as a strategic decision, it also means that Apple is foregoing a potential revenue stream at a time when growth has been a challenge. Despite rebounding from a sales slump in the previous quarter, the company expects the current period to be sluggish. The Vision Pro headset, which was recently launched, is not anticipated to significantly contribute to growth in the near future. In contrast, a self-driving car could have generated substantial revenue, although profit margins would have been slim.
By redirecting resources towards generative AI, Apple aims to capitalize on the profitability potential of AI revenue streams, which are expected to outweigh the potential gains from entering the electric vehicle market. The decision reflects a shift in focus towards emerging technologies with long-term growth prospects. While the self-driving car project may have promised significant revenue, the company sees greater opportunities in AI and mixed-reality headsets.
Overall, Apple’s decision to abandon plans for a self-driving car underscores its commitment to exploring new avenues for growth and innovation. The company’s shift towards generative AI and mixed-reality headsets aligns with its strategy to prioritize long-term profitability over short-term gains. Despite forgoing the revenue potential of a self-driving car, Apple is confident that its investments in AI and emerging technologies will pave the way for future success in the rapidly evolving tech industry.
