Mark Gurman & Alex Webb:

The initiative is now prioritizing the development of an autonomous driving system, though it’s not abandoning efforts to design its own vehicle. That leaves options open should the company eventually decide to partner with or acquire an established car maker, rather than build a car itself. An Apple spokesman declined to comment.

Apple has hundreds of engineers working on car design and has been targeting a release as soon as 2020. That goal has been affected by multiple departures, technical delays and confusion regarding the direction of the project, according to people with knowledge of the efforts.

Tapering demand for the iPhone, which accounts for more than half of Apple’s sales, has emphasized the importance of new sources of revenue. Research and development spending jumped by more than a quarter to $2.6 billion in the three months through June compared with a year earlier.