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Save your condolences for the death of the AppleCar and send your congratulations. Who needs an expensive, low-margin electric vehicle when you have ambiguous hopes for AI?
After an ill-fated, decade-long odyssey, Apple has said goodbye to its car project and will redirect resources to its artificial intelligence division. A blow to all who longed to see exactly which generation Fiat 500 Jony Ive would have paid homage to.
If the decision was an admission of defeat — Elon Musk responded to the news on X with an emoji of a salute and a cigarette — it didn't feel like one. The collective response from several analysts and the market was something close to "good riddance."
Scuttling the multibillion-dollar insurgent effort will allow Cupertino to focus on a broad AI strategy within the Apple ecosystem, said Wedbush Securities analyst Dan Ives.
Others have pointed to the way Apple's software and intuitive design have already reshaped the car industry through CarPlay, software that connects iPhones to cars, effectively transforming other companies' hardware into extensions of its walled garden.
And leaving the automotive ambitions in the software realm means never having a 3,000-pound dented, muddy, and — most of all — rusty product sullying the world's cleanest brand on the road. Or on a lawn. As long as the updates keep coming it will be forever new.
Apple took so long to walk away from the expensive gamble that the tardiness looks like timeliness. New entrants have upped the competition in the electric vehicle market, sparking price wars and squeezing margins.
Even Tesla, the EV king whose anti-Detroit rebellion inspired Apple's vehicular ambitions, has hit roadblocks. Slowing demand projected in 2024 has darkened the company's outlook. And without Big Tech's sprawling operations that span multiple sectors, Tesla has fewer business lines to rely on. The stock is down nearly 20% so far this year. As improbable as Tesla’s rise has been, its long-term success still hinges on largely unproven autonomous technology.
The astonishing growth of Magnificent Seven winners, namely Nvidia (NVDA), Meta (META), and, to a lesser extent, Microsoft (MSFT), further presses the question of why Apple would chase Tesla when the early days of developing AI tools have been so promising.
Musk's recent fuss over unlocking Tesla's AI potential makes Apple's car exit even more compelling. CEO Tim Cook already has multiple conduits for intimate data gathering and platforms for refining AI tools. Musk's vehicles are parked outside; Cook's screens tuck you in at night.
But there's something too on the nose and a little bleak about the world's most valuable company shuffling staff from its daring EV project to the trend of the moment, pursuing a more dazzling version of ChatGPT, or finding immersive ways to sink users more deeply into their couch. You'd think the phrase "If you can't beat em, join em" shouldn't apply to an enterprise packing hundreds of billions of dollars to throw at a problem.
At the company's annual shareholder meeting earlier this week, Cook said Apple will share details of its new AI features later this year. It's still not clear how AI will resuscitate Apple's growth story. But at least now we know where it won't come from.
Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on Twitter @hshaban.
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