Apple Is Said to Be Rethinking Strategy on Self-Driving Cars

Mark Neuling | CNBC

Tim Cook

SAN FRANCISCO — Apple is rethinking what it plans to do about self-driving cars, just as other big tech companies appear ready to plow ahead with competing efforts.

In a retrenchment of one of its most ambitious initiatives, Apple has shuttered parts of its self-driving car project and laid off dozens of employees, according to three people briefed on the move who were not allowed to speak about it publicly.

The job cuts are the latest sign of trouble with Apple’s car initiative. The company has added resources to the project — code-named Titan — over the last two years, but it has struggled to make progress. And in July, the company brought in Bob Mansfield, a highly regarded Apple veteran, to take over the effort.

Apple is not the only big tech company pursuing autonomous driving technology. Alphabet, the parent company of Google, has tested self-driving cars on the road for years, but its focus has been on designing the underlying software and systems to make that technology work.Tesla has a self-driving feature within its cars that has come under scrutiny in recent months after a fatal accident was connected to its use.

Separately, Uber, in a limited test in Pittsburgh next week, plans to start picking up passengers in self-driving cars. Last month, Uber also acquired the start-up Otto for about $700 million, a purchase that brought with it some of the top minds in robotics and autonomous technology.

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And automakers like Ford, General Motors and Fiat Chrysler have all said they expect to put a number of self-driving vehicles on the road in five years or less.

But Apple has stood out from the others mainly — as is often the case with the company — for its secrecy. Apple has never acknowledged that it is working on a car, though Timothy D. Cook, Apple’s chief executive, has said the automotive industry is undergoing a drastic change and, earlier this year, he seemed to confirm the existence of the car project at its annual shareholders meeting.

“Do you remember when you were a kid, and Christmas Eve, it was so exciting, you weren’t sure what was going to be downstairs?” Mr. Cook said at the meeting. “Well, it’s going to be Christmas Eve for a while.”

Apple employees were told that the layoffs were part of a “reboot” of the car project, the people briefed on it said. An Apple spokesman declined to comment.

Under Mr. Mansfield, Apple changed the focus of the project, shifting from an emphasis on designing and producing an automobile to building out the underlying technology for an autonomous vehicle. Bloomberg earlier reported the strategy change.

Electric cars rely not on the internal combustion engine, but on technologies more prevalent in the consumer electronics world: batteries, sensors and software. In addition, self-driving cars could change the traditional notions of public transportation and car ownership.

Apple started looking seriously into building an electric car about two years ago. It expanded the project quickly, poaching experts in battery technology and so-called machine vision, as well as veterans from the automobile industry.

The team also pulled in staff members from other divisions across Apple, growing to more than 1,000 employees in about 18 months. But as the project grew rapidly, it encountered a number of problems, and people working on it struggled to explain what Apple could bring to a self-driving car that other companies could not, according to the people briefed on the project.

Steven Zadesky, a longtime Apple employee initially charged with heading the car effort, left the company for personal reasons this year. His departure opened the door for Mr. Mansfield, who worked closely with Apple’s co-founder, Steve Jobs, but left the company’s executive team in 2013.

He had all but retired from Apple except for the occasional visit to the company’s headquarters in Cupertino, Calif. He was coaxed into coming back to oversee the project, which could represent a new market for Apple as sales of its flagship iPhone are slowing.

Apple has also made some headway in the space. The company has a number of fully autonomous vehicles in the middle of testing, using limited operating routes in a closed environment, according to people briefed on the company’s plans. Like other companies in the space, that technology is likely a number of years away from seeing mainstream consumer use, they added.