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Shares of South Korean automaker Hyundai soared on Friday after a company official said the automaker was in preliminary talks with Apple on a partnership to produce an electric car.
Hyudai shares rose 20% – adding $ 8 billion to the company’s market value – the biggest one-day jump since 1988.
But, within hours, the company backed away from that statement, telling reporters that its representative had misspoken and the company had been approached by a number of unnamed potential partners over a collaboration on electric vehicles.
Hyundai may have jeopardized any relationship it hoped to establish with Apple by naming the company, Bloomberg reported, noting that the Cupertino, Calif.-Based tech giant has a penchant for secrecy regarding future products. and partnerships. Apple has so far declined to comment on the Hyundai report.
True or not, Hyundai’s pair of whipped statements are fair to the course in a decade of rumors and recurring reports about Apple’s ambitions in the auto sector.
“The ultimate mobile device”
For years, it was Silicon Valley’s worst-kept secret: Apple was building a car.
From 2015, journalists caught the wind The company hires dozens of automotive engineers and executives with industry experience. He also caught engineers who had helped You’re here stealing a march on the major automakers, proving that there was a market for high-end, high-design and high-tech electric cars. The internal code name for the Skunk’s Secret Works, which ultimately included over 1,000 people, was even leaked to the media: “Project Titan”.
There was strategic rationale in the project, many tech analysts said: With global smartphone penetration capping, the battle between software ecosystems was shifting from mobile phones to mobility itself. “The car is the ultimate mobile device, isn’t it?” Apple COO Jeff Williams said in 2015.
A modern car, after all, was little more than software on wheels – with streaming entertainment, fancy maps, routing software, and calming voice digital assistants, and soon enough, artificial intelligence to to behave. Apple already had expertise in most of these areas. And with electric motors increasingly replacing the internal combustion engine, the industry was apparently ripe for new disruptive players, especially those who had a proven track record of marrying sleek hardware design with user-friendly software to create products. attractive to consumers. Tim Cook, Apple’s chief executive, even said automakers were “at an inflection point for massive change.” Oh, and Apple also knew a thing or two about batteries – at least that’s what the point was.
But then, in 2016, Bloomberg News reported that the company was slashing its ambitions significantly, laying off hundreds of gearboxes it had hired for the project. Instead of trying to build its own vehicle, an “iCar” as some have dubbed it, Apple would focus on delivering the software to others who need to create a connected “smart” car. This would leave the design and production of the vehicle to the partners.
It was reported that Project Titan had been plagued by internal strife and management disagreements over what type of car to make and how far the company should push towards autonomous driving. Others said Apple had struggled master the long and complex supply chains required to produce a car. Luca Maestri, Apple’s chief financial officer, was also reportedly lukewarm about the project. Maestri was a long time General Motors executive and has always said he had no desire to return to the auto industry, which is much more capital intensive and much less profitable than Apple’s lucrative hardware and software business model.
Rumors and misdirection
For the past four years, there has been a constant low hum rumors about the status of Apple’s automotive ambitions, with a major partnership announcement still supposed to be a few months or weeks away. But so far, no deal has come to light.
Expectations started to build again in December after Reuters reported, citing anonymous sources “familiar with the matter” that Apple planned to have its own autonomous electric car in production by 2024, with its own “breakthrough battery technology.” Some even started to suggest that Apple posed a serious threat to Tesla’s galloping share price.
But no sooner did this story emerge than knowledgeable Bloomberg News Apple reporter Mark Gurman appeared to pour cold water on iCar’s new speech, writing earlier this month that anonymous sources at within the company had told him the project, overseen by a small team, was still in its infancy and that any Apple autonomous vehicle was “at least half a decade” after its launch.
This may be a deliberate mistake on Apple’s part. But if history is any guide, investors might be smart to take profits on Hyundai shares while they still have a chance.
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