Apple Car Expectations Loom on the Horizon as R&D Spending Could Top $10 Billion This Year

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The Apple Car is far from official, but it is one of the most talked about upcoming products from the Cupertino-based company despite that fact.

While Apple is busy keeping its automotive plans (codenamed Project Titan) a secret, or at least constantly trying to, there are a countless number of eyes looking ahead towards the future where an Apple Car already exists and is cruising the roads. Expectations have the Apple Car arriving some time around 2019, at the earliest, and now a new report suggests Apple is ramping up its Research and Development spending in a major way ahead of that project’s debut in a few years.

Analyst Neil Cybart writing for Above Avalon has taken an in-depth look at expectations for Apple’s R&D spending over the next year, and expects the company will spend upwards of $10 billion in that department for products still being developed. To compare that to Apple’s past, the company was only spending $3 billion per year just four years ago. And the jump up to $10 billion is a 30 percent increase just from 2015.

The expectations here are that Apple is gearing up for something big, something massive, even, and the Apple Car is the product that most believe is that massive undertaking.

“Apple is not spending $10 billion on R&D just to come up with new Watch bands, larger iPads, or a video streaming service. Instead, Apple is planning on something much bigger: a pivot into the automobile industry.”

Cybart believes that Apple has been working on the Apple Car for several years already, and an uptick in R&D spending beginning in 2014 appears to be one indication of that. Apple’s R&D spending has spiked ahead of major product launches, from the iPhone, the iPad, and the Apple Watch. A massive spike such as this insinuates that another major product is being developed, and the groundwork for Apple’s Project Titan, including buying up large swaths of production/testing space, hiring sprees, and even the development of Apple’s CarPlay could all be combined to build an Apple Car.

“It was recently revealed that Apple has set up a web of Project Titan buildings and infrastructure spread across Santa Clara, Sunnyvale and San Jose. This means that it is incorrect to think of Project Titan as just being about one product or one feature. Instead, Apple is building an entire start-up focused on the electric car industry, giving me a high level of confidence that Apple’s efforts will lead to products. When diving deeper into Project Titan, this is where there is greater unknown as to whether a certain technology will ever ship, such as various autonomous driving features, different features for new internal passenger compartments, unique car materials, and the list goes on. Each one of those items should be thought of as an individual project that may not see the light of day.”

Cybart believes that the Apple Car is going to be another major pivot point for Apple, like the company’s desktop computers in the past, and like the iPhone back in 2007. The analyst believes that this is not just a simple undertaking that Appe is “tinkering” around with in its labs, but a major focal point for the company, and a new generation of product.

“There is one very simple reason for my high degree of confidence: Project Titan is a long-term pivot. I don’t consider Titan to be just another project that Apple has been tinkering around with in the lab for years like an Apple television set or Apple Pencil. Instead, Project Titan is much more about building a foundation for Apple that will literally represent the company’s future.”

Apple has been working on something for quite some time, and it’s certainly possible that it’s an Apple Car. The tea leaves appear to be lining up for an electric car, a computer on the streets like the iPhone is a computer in our pocket, and Apple’s R&D spending’s increase in the next year would suggest it could see the light of day in just three years time, but do you really want to see it come to light?

[via Above Avalon]

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