In 2014 rumors began circling that Apple was building its own automobile, and had allocated or hired over 1,000 people dedicated to the project. At the time, Apple was perhaps at the height of its swagger, with iPhone sales exceeding expectations and the company becoming more valuable than industrial giant ExxonMobil. An automobile looked like the perfect product for a disruptive, cash-rich company like Apple, and the press was awash in speculation that the technology company would run circles around the stodgy automakers in Detroit and Japan, and have an affordable, well-designed, electric and even self-driving vehicle in a few short years. The project, supposedly dubbed "Project Titan," sucked up the best brains in the auto industry, even becoming what Elon Musk dubbed a "graveyard" for former employees of Technology/Automotive darling Tesla.
Fast forward to the present, and Apple has replaced the leadership of Project Titan and dramatically scaled back expectations, replacing the goal of a full-fledged Apple Car with a deadline to produce some sort of software product that could be sold to other automakers by 2017.
The year 2016 may well be the year that some of the magic of Silicon Valley-based technology faded. Once rumors began circulating that Apple was attempting to build a car, it seemed almost a foregone conclusion that the physical engineering and production requirements of a mass-market vehicle could be readily duplicated by Apple, and that software would easily differentiate what was assumed to be an otherwise easily replicated commodity product. This was also the year that Tesla released its highly anticipated Model X SUV, only to experience significant challenges with several features, including the industry first "falcon doors," prompting CEO Elon Musk to confess that the vehicle might have been over-designed.
The obvious takeaway for IT leaders is that software and innovation are not magical talismans that can overcome any obstacle and mitigate flaws in physical products or complex processes. Apple cited the complexities of the automotive supply chain as a key driver in scaling back Project Titan, a fact that should have been relatively obvious. While Apple has created a world-class supply chain for its products, a smartphone-like device would be one of tens of thousands of complex subassemblies that must be designed, purchased, integrated, and managed to assemble a modern car.
Even before Project Titan became the worst-kept secret in the automotive industry, Apple was attempting to integrate itself more deeply into vehicles with its CarPlay project. Essentially, CarPlay allowed iPhone users to have an "iPhone experience" on that vehicle's dashboard screen, providing consumers with a familiar and standardized experience, but also putting Apple in charge of the in-vehicle experience rather than the automaker. This has created a bit of a strained relationship between Apple and the automakers, as consumers demand familiar, high quality software in the vehicles, but automakers hesitate to cede full control of the experience and data to a third party, creating a "battle for the dashboard" of sorts. Automakers are loathe to let Apple or Google "own" the emerging digital services and entertainment options and essentially be relegated to the role of the "dumb screen" while Apple and Google reap the data, and financial benefit, of providing digital services to drivers.
While consumer demand is pulling carmakers into the Apple and Google fold, Project Titan presumably further strained relations with a significant potential market for Apple, making automakers that could potentially be massive customers or partners of Apple even more suspicious of the company's ultimate motives.
The promises of digital technologies can make it tempting to thumb your nose at longstanding partners, vendors, and customer segments that you assume you'll no longer need once your innovation dreams come to fruition. However, despite shifting relationships, these entities may become tomorrow's customers should your project change direction. Presumably Apple will continue to pitch CarPlay, and may soon be approaching the automakers it vowed to "disrupt" with additional software products resulting from Project Titan.
As you consider where to invest your digital dollars, it can be tempting to buy into all the near-magical promises of technology allowing for rapid innovation, and accelerated product development and rollout. However, all the technology in the world won't necessarily simplify highly complex physical products, sprawling supply chains, or regulatory and political burdens. Think of digital as gasoline that accelerates an already-burning fire. Just as the gas will do little without air, heat, and spark, so too will digital accomplish little if the prerequisite elements are not in place.
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Patrick Gray works for a global Fortune 500 consulting and IT services company and is the author of Breakthrough IT: Supercharging Organizational Value through Technology as well as the companion e-book The Breakthrough CIO's Companion. He has spent over a decade providing strategy consulting services to Fortune 500 and 1000 companies. Patrick can be reached at firstname.lastname@example.org, and you can follow his blog at www.itbswatch.com. All opinions are his and may not represent those of his employer.