Just how successful can Apple (AAPL) - Get Report be in the post-Steve Jobs era at expanding into new multi-billion dollar markets? Five years after Jobs stepped down as CEO, this still feels like an unanswered question. And a fresh report on the struggles of Apple's car project certainly doesn't provide additional clarity.
Sources tell Bloomberg that Apple's car initiative, codenamed Project Titan, is no longer trying to build a full-fledged electric car. Rather, under the purview of new project leader and former Apple hardware engineering chief Bob Mansfield, it's solely focused on creating an autonomous driving platform. In addition, Apple execs have reportedly given the team "a deadline of late next year to prove the feasibility of the self-driving system and decide on a final direction."
Hundreds of hardware and software engineers have reportedly left the Titan team, either voluntarily or via layoffs. Those software engineers still around are said to be "working on autonomous programs, vision sensors, and simulators for testing the platform in real-world environments." Alphabet's (GOOGL) - Get Report Google, Uber, Tesla Motors (TSLA) - Get Report , Baidu and several others have already made big autonomous driving investments.
There was no mention by Bloomberg of planned acquisitions. Last month, Apple was reported to have held talks with British supercar maker McLaren about an acquisition or investment--McLaren dispelled said rumors--and to be talking with startup Lit Motors about a purchase. Lit has been developing a self-balancing, two-wheel, electric vehicle known as the C-1.
Prior reports had already mentioned Titan layoffs and the prioritization of an autonomous driving system. But Bloomberg's latest story goes further by indicating plans to build a car have been axed, and suggesting the project could be shuttered if enough progress isn't made over the next year. All of this is a far cry from a September 2015 Wall Street Journal report that said Apple was hoping to launch a car in 2019.
Notably, Bloomberg says Titan was "blighted by internal strife" by the end of 2015, and quotes one source as calling what happened "an incredible failure of leadership." We'll never know if Jobs' presence would've yielded a different outcome, but it does look as if Titan lacked the kind of leadership and vision needed for a tech giant to expand into a market as large and daunting as cars. And that, of course, provides more reason to appreciate what Tesla, for all its missteps and overhype, has pulled off under Elon Musk.
Regardless, Titan isn't the only Apple effort to create a large new business that hasn't gone as planned. The company's plans to launch an online TV service have reportedly put on ice due to stalled licensing talks with TV networks. And after launching the Apple Watch to much hype last year, sales of the smartwatch line are expected to drop this year, in spite of the recent launch of the Apple Watch Series 2. KGI Securities expects just 8.5 million to 9 million 2016 Apple Watch shipments, a level equal to less than 4% of this year's expected iPhone shipments.
Elsewhere, Apple has been making favorable comments about the potential of the augmented reality and virtual reality markets, and has reportedly created a team that has built headset prototypes. But given how much progress Facebook (FB) - Get Report , Microsoft (MSFT) - Get Report , Google and others have made in commercializing AR and/or VR hardware platforms, this feels like a wait-and-see story at best, and a reactive move at worst.
None of this is to say that Apple's core businesses aren't in good shape. Thanks to its internal talent and ability (to a large extent, at least) to maintain the culture and product philosophy Jobs left behind, iPhone, iPad and Mac sales continue to hum along nicely, with the improvements brought about by Apple's chip, hardware and software R&D work enough to gradually expand the company's installed base and drive healthy upgrade activity among existing users.
But all of that can only deliver so much growth for a company doing over $215 billion in annual sales. To remain a growth stock rather than just a value play, Apple needs its next big thing. And each year seems to bring fresh evidence that this is proving very hard to come by in the post-Jobs era.