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Apple's autonomous car technology project, nicknamed "Project Titan," has long been one of the most mysterious and talked about efforts in the industry.
After briefly contemplating building its own self-driving, electric car, the company refined its autonomous car ambitions in late 2016 around building a technology stack that gives cars autonomous capabilities.
This technology stack currently includes software and sensor hardware, but it could eventually grow to include other hardware like cameras and computing systems. Apple has been awarded a handful of patents for self-driving technologies, and has registered 30 Lexus SUVs to test its technologies on public roads in California.
But the tech titan will likely be a late entrant into the self-driving tech market as numerous competitors like Waymo, Uber and Baidu have a multi-year head start.
Apple's best chance at catching up to other players could be through an acquisition, though that comes with its own challenges.
- Apple has enough cash on hand to purchase an automaker outright. Apple was exploring acquisitions in the media, video game, and automotive industries, according to a Citi analyst's note from last December. Under the new Tax Cuts and Jobs Act of 2017, companies can repatriate cash held overseas for a one-time reduced tax rate. That would allow Apple to use some of the $252 billion in cash and cash equivalents that it holds outside the US to buy an automaker. Although the Citi analysts pegged Tesla as Apple's most likely target, concerns over its ability to mass produce cars have caused Ford to become more valuable than Tesla, meaning that a company like Ford or GM could be a smarter purchase for the tech titan. It's still unclear, however, if any automaker would even want to be bought by Apple.
- It's more likely that Apple will opt to purchase a self-driving startup. Most of these young companies, like startups in many sectors, are focused on one particular niche that they've been iterating on and developing for since their early funding rounds. Many legacy automakers and suppliers have acquired these self-driving startups — Aptiv acquired nuTonomy last fall for $450 million, GM notably bought Cruise Automation in early 2016 for $1 billion and purchased Strobe late last year for an undisclosed sum, and Ford bought Princeton Lightware, a LiDAR unit designer, last October. This type of acquisition might be preferable for Apple since it could take the startup's offering and rapidly develop it into a product by throwing its developers and engineers behind it. It would also be cheaper for Apple than buying an automaker, giving it enough leftover cash to pursue merger and acquisition (M&A) opportunities in other sectors if it wanted to.
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