Apple’s latest quarterly results were disappointing. Earnings and iPhone sales both fell short of analysts’ expectations, and the company issued a weak outlook for the current quarter. However, its 10-Q filing with the Securities and Exchange Commission (SEC) may have offered clues about the much-rumored Apple car. UBS analyst Steven Milunovich, who noticed the hints, has a Buy rating on the stock with $120 price target.

Apple Inc. 10-Q Filing Hints At Apple Car Project

Apple’s other off-balance sheet obligations surge 75%

Milunovich believes the iPhone maker is making huge investments in the Apple car project. The Cupertino company said in its 10-Q filing that its “other off-balance sheet obligations” rose 75% year-over-year to a record high of nearly $12 billion. Milunovich surmises that the big bump in spending is largely for the automobile development. The rise in other off-balance sheet obligations could also be partially related to Apple’s new campus in Cupertino as well as the expansion of data centers.

Milunovich pointed out that Apple has been purchasing and leasing real estate properties in Silicon Valley that have dedicated spaces for repair garage, wheel balancer, lube stations, tire changer and wheel sensor. The car is being developed under the Project Titan, and all the buildings related to automobile work have been named after the Greek mythological characters.

Apple car development in full swing

In the last few years, Apple has hired more than a thousand engineers, battery technology experts, and robotics scientists reportedly for its car project. Earlier this month, the company hired former Tesla VP of Vehicle Engineering Chris Porritt to work on the Project Titan. It has also established a secret lab in the German capital Berlin where 15-20 top-class employees are working on innovative automobile technologies.

The tech giant was in talks with Daimler and BMW for a potential manufacturing collaboration as Apple itself has little experience in the automobile industry. However, negotiations with both companies have fallen apart. According to Bloomberg, Magna Styer could be the contract manufacturer for Apple car. Fiat Chrysler has also said in the past that it was keen to collaborate with Apple on its car project.

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