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Illustration: Eniola Odetunde/Axios

Apple's moves toward breaking into the market for self-driving cars have come in fits and starts, but it has big ambitions for the space and is moving forward both with its own efforts and with potential partnerships with automakers.

Why it matters: Apple has great businesses in phones and computers, but its long-term growth potential will depend on conquering an entirely new market. Improving health care and playing a role in autonomous vehicles appear to be its two biggest bets on that front.

What's happening:

  • Hyundai made a rare (and probably unwise) public confirmation two weeks ago that it is in talks to work with Apple in some form. Reports were that the Korean automaker would help with both manufacturing and battery technology, with production possible as early as 2024.
  • Apple has sought and received permission from California regulators to test self-driving vehicle technology on city streets. It has a few dozen vehicles outfitted with lidar, radar and other sensors, some of which have been spotted on the streets of Silicon Valley.
  • Apple has continued to hire and invest in the business, though it has also cut staff at times, changed leadership and revamped its strategy. The size of the team has varied over time, but has been on the order of 1,000 workers, according to sources.

Of note: Tesla CEO Elon Musk said that when his company was at a low point with the Model 3, he reached out to Apple about selling the company but that Tim Cook declined to meet with him. Apple has not commented on that.

Between the lines: Apple is very interested in the space and wants a chance to play a significant role, but that doesn't necessarily mean proprietary iCars will be rolling down the streets.

  • The company has considered several possibilities in addition to making its own cars, ranging from building software that others could use to focusing less on cars and more on the broader area of "autonomy."
  • "The only thing we do actually know with certainty is that they have been developing and testing automated driving systems," says Sam Abuelsamid, principal analyst at Guidehouse Insights.

Yes, but: Apple might well not want to make the whole car, but run an autonomous car service, for several reasons, Abuelsamid said.

  • Selling cars doesn't produce the 35%+ profit margins Apple typically likes, while a service might.
  • Apple could pick and choose where to offer the service, focusing on big cities that are well-suited to self-driving cars and have a large base of affluent customers. Think L.A., New York, San Francisco, Chicago, Miami and so on.
  • Apple has been making a big push on services.

Be smart: Apple usually likes to put a better interface on technology that's emerging but not brand new, rather than being the absolute first to market.

  • The iPod wasn't the first digital music player, the iPhone wasn't the first smartphone and the Apple Watch wasn't the first smartwatch. They typically enter a market when they see an opportunity to do something better.

Apple in the past has confirmed its general interest in the category but declined to comment for this story.

The bottom line: Whatever Apple is doing will take time. Given how much work still needs to be done on automated driving, Abuelsamid said that probably puts an Apple car, or even a service, "likely in the second half of the 2020s."

Go deeper

Ina Fried, author of Login
Updated Jan 27, 2021 - Technology

Apple's quarterly sales top $100 billion for first time

Credit: Apple

Spurred by strong sales of the latest iPhones, Apple reported it took in a record $111 billion in revenue for the three months ended Dec. 31, as the company crushed expectations.

Why it matters: The move showed even a pandemic didn't dull demand for Apple's latest smartphones.

FBI, Homeland Security warn of increasing threat to Capitol

Photo: Eric Baradat/AFP via Getty Images

The FBI and Department of Homeland Security predict violent domestic extremists attacks will increase in 2021, according to a report reviewed by Axios.

Driving the news: The joint report says an unidentified group of extremists discussed plans to take control of the Capitol and "remove Democratic lawmakers" on or about March 4. The House canceled its plans for Thursday votes as word of the possible threats spread.

24 mins ago - World

Pope Francis set to make first papal visit to Iraq amid possible turmoil

Data: Vatican News; Map: Danielle Alberti/Axios

Pope Francis is forging ahead with the first papal trip to Iraq despite new coronavirus outbreaks and fears of instability.

The big picture: The March 5–8 visit is intended to reassure Christians in Iraq who were violently persecuted under the Islamic State. Francis also hopes to further ties with Shiite Muslims, AP notes.