Apple is behaving in a really strange way regarding the mythical "Apple Car." After hiring 1,000 people to work on a secret program called Project Titan, which many believed to be the development of a car, the company laid off hundreds of them late last year. Observers interpreted that as one of Apple's periodic experiments: The company looked at what it would take to build a car and then decided not to.
And yet, Business Insider's Sam Shead recently discovered a secret Apple office in Berlin that — sources tell us — is devoted mostly to transportation. The engineers there were hired from car companies, and some are working on mapping projects.
So is Apple working on a car or not?
UBS analyst Steven Milunovich hosted a conversation with Horace Dediu (of Asymco.com) and Neil Cybart (of AboveAvalon.com) recently. He asked them what they thought was going on inside Project Titan. They raised four issues:
Transportation — "$5tn narrowly or $15tn broadly defined" — is a bigger market than either IT or healthcare, two industries that Apple is already deep into.
"Car ownership will plummet with autonomous driving."
And "the company is building expertise in core sensor, driving, and mapping technologies."
In sum, "Project Titan is likely to be a transportation platform — not a car but the entire experience," Milunovich wrote.
The $5 trillion size of the market is crucial. Apple can enter only massive markets if it wants to continue growing. Apple is so huge that those markets need to be in the multiple billions of dollars; otherwise there is no point.
Think about that.
If the cars of the future are driverless, what will we do inside them as they ferry us around? We will need entertainment, communications, and work-productivity apps to keep us occupied. Apple already does those on its other devices. The car will need navigation information, Wi-Fi, broadband connectivity, and probably its own operating system. Apple already does those, too.
Source: Bloomberg Pro Terminal
Junior Trader Stefan Panteleev
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.