Amid the AI wave, Apple has terminated its decade-long car project.
Apple has invested billions of dollars in automotive project research and development, and has been trying to find the right direction.
Some said it's a bold and stratgic move for $Apple(AAPL)$ to give up the ten-year efforts and billions of investment.
How do you view Apple gives up car project and turns to AI?
Below are some insights from Tiger @TigerOptions, @Mrzorro and @Samluo. Which opinions do you agree with？
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Click titles to read the full analysis:
1. @TigerOptions: Apple's Strategic Pivot From Electric Cars to AI
Key Points:
The Apple car project, which commenced around 2014, faced numerous challenges, including leadership changes and strategic shifts. Despite efforts to overcome hurdles, the project failed to meet expectations. The recent decision to wind down the initiative comes after discussions on potentially delaying the car's release until 2028 and adjusting self-driving specifications.
From my perspective, canceling Project Titan demonstrates Apple's commitment to a pragmatic approach, acknowledging that the project no longer aligns with the company's overarching strategy. As the tech giant turns off the lights on its electric car ambitions, the focus on generative AI projects suggests a forward-looking strategy that leverages Apple's strengths in AI and machine learning.
On the stock front, technical analysis indicates that Apple's stock is currently trading near a support level that has proven resilient in recent times. This could potentially signal a substantial bounce. However, caution is warranted, as a retest of the support level may reveal weaknesses in the bounce, potentially leading to a breach of the support level. Personally, I am looking to trade credit spread calls to anticipate the bounce.
2. @Mrzorro: Apple Killed Its Car Project. Tesla's Stock Barely Budged
Key Points:
It might be a surprising reaction for some investors who think one of the world's most valuable companies -- that generates roughly as much free cash flow annually as the entire global auto industry -- getting into cars was a big deal.
While an Apple car might have been disruptive, it was always a low-probability event. The odds of an Apple car ever hitting roads were always very low -- they might have gone from 10% to 0% on Tuesday. What's more, if an Apple car ever were created it wouldn't have arrived on roads until late in the decade, at the earliest.
The reasons an Apple car was a low-probability event are myriad. For starters, automotive profit margins aren't very attractive. Competition is fierce. Most of the value is derived from the hardware portion of the car -- not the operating system. Building cars is also capital-intensive, and the process doesn't lend itself well to outsourced manufacturing.
3. @Samluo: AAPL is killing Project Titan to focus on AI
Key Points:
While most investors were skeptical that Apple would actually coming out with a car, the ending of the project ends optionality around a project that would have shifted Apple's top line growth from around 5% to 15% plus.
If Apple would have captured 10% of the auto market, that would have added about $250B in revenue a year, or increased their overall business by 60%.
While for Apple automotive is a bigger long-term revenue opportunity than generative AI, the decision to move on from Titan does have a benefit because it will increase the companies urgency to do something profound in generative AI.
Generative AI for $AAPL will likely come in the form of personalized AI (previewed in June), something that Apple is uniquely positioned to capitalize on given their brand in privacy and security.
Questions for you:
How do you view Apple gives up car project and turns to AI?
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⏰Duration
6 Mar (24pm EDT)
Comments
people it's a bold and strategic move for $Apple(AAPL)$ to give up the ten-year efforts and billions of investment.
well, if the management thinks that it's not worth pursuing, then it's better to not proceed, as otherwise, they may end up losing more.
@HelenJanet @Shyon @LMSunshine @koolgal @GoodLife99 @Universe宇宙 @Aqa @rL @DiAngel @xXxZealandxXx @Zarkness
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Sometimes it is better to move on and return to something more innovative and resume to original goal.
@koolgal @TechnicalHunter @icycrystal @JC888
no one knows what goes on behind the scenes. the decade long R&D could be sold & brought to fruition by another company. no loss to $Apple(AAPL)$