The fabled electric Apple (NASDAQ:AAPL) Car may have just hit a bump in the road. The Wall Street Journal is reporting that Steve Zadesky, who has been at Apple for 16 years and was most recently in charge of the electric car project dubbed Project Titan, is calling it quits.
Zadesky had helped Apple grow its automotive engineering team by threefold, totaling approximately 600 employees as of last September, according to the report. Zadesky is reportedly leaving for primarily personal reasons unrelated to his performance, and it's unclear exactly when he will be leaving the Mac maker.
A speed bump at worst
This loss of talent is certainly a setback, but it should prove to be minor in the grand scheme of things. Elon Musk has called the Apple Car an "open secret" since Apple has hired over a thousand auto engineers to work on the project, by Musk's estimation.
Apple's auto team has grown significantly, so there's no shortage of auto expertise and knowledge within the company, and the iPhone maker should have no problem backfilling the role either internally or externally. Project Titan is already a "committed project" internally, which should give it priority when it comes to developmental resource allocation.
Interestingly, Daimler CEO Dieter Zetsche recently visited Silicon Valley and met with about 70 different unnamed companies to discuss future trends. The executive suggested that Apple and Alphabet's Google are making better progress on their respective auto projects that he would have guessed, according to Reuters.
Why Apple wants to expand its empire
As iPhone growth plateaus, the company continues to look beyond the smartphone market for its next big growth opportunity. The next immediately obvious opportunity is with Apple Watch and the burgeoning smartwatch market, but Apple is also looking into virtual reality, autonomous electric cars, deep learning, and other promising areas.
The main reason why Apple's valuation has been so cheap for so many years is because investors recognized that Apple was approaching a limit to its near-term growth. The law of large numbers is now taking hold, as Apple's trailing-12-month revenue base is currently nearly $234 billion.
If Apple can successfully expand its empire into new markets and tap into new incremental growth opportunities, it might be able to earn more respect from investors and enjoy some multiple expansion that could singlehandedly drive share gains even lacking meaningful revenue growth. That's especially true if you add in aggressive share repurchases that deliver significant earnings accretion along the way.