I think David’s summary and analysis are right. I just got the appended
article on another list.
-Bill
_____________
Feb 27, 2024
The Briefing
By Martin Peers
Maybe Apple should cancel multibillion-dollar projects more often! Shares of
the iPhone maker, which have fallen since the start of the year, rose nearly 1%
Tuesday after Bloomberg scooped the news that Apple had canned Project Titan,
its decade-old autonomous car project. As a Morgan Stanley analyst said in a
research note, the Bloomberg report, “if true, would be a positive
development.” The analyst said he hadn’t put any value on the project, thinking
Apple was too far behind its competitors to catch up in the arena of cars. In
other words, Wall Street seemed to be saying to CEO Tim Cook, “What took you so
long?”
Tech companies have to take big, risky swings if they want to keep
growing—that’s the nature of the business. There’s never a guarantee of
success. For Apple, now generating nearly $400 billion in revenue annually,
coming up with a new growth business big enough to move the needle isn’t easy.
So it makes perfect sense that Apple tried in cars, a giant market. Still, it
was surely evident a couple of years ago that Project Titan was a disaster. As
The Information outlined in this deep dive in 2022, the car project had been
plagued from the start. So while Cook can be applauded for having the
discipline to call off the project, there is a question of why he didn’t make
the decision earlier.
To be fair, that is a minor quibble. Apple is so rich—its pockets are so deep
they make the Mariana Trench look like a kiddie pool—that the billions it has
blown on this don’t matter that much. The real issue is what Apple plans to do
about its growth problem. Revenues fell slightly last year, and analysts expect
them to be barely up this year, according to S&P Global Market Intelligence.
Apple continues to be dependent on the iPhone, and associated services
revenues. It’s too early to judge if and when the Vision Pro mixed reality
headset will become a hit. If it doesn’t, what comes next?
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