A research note unveiled to investors recently by Morgan Stanley has Apple allegedly becoming a major player if it decides to become involved in the upcoming field of autonomous vehicles.
Morgan Stanley analyst Katy Huberty, on the sidelines of the numerous reports that Apple was secretly developing an electric car, said “this may not be a near-term event but we would not be dismissive of Apple’s automotive ambitions. The world’s richest, most valuable company is taking on the world’s most disruptable business.” She added that actually the auto industry might need a change agent such as Apple, “after over 100 years of status quo”. Morgan Stanley notes that associated technology with autonomous cars might be the key selling point for Apple to enter the automotive field. They also noted that Appe’s usual strategy – design the products in-house and outsource the entire production and assembly process – could easily be used in cars.
They also pointed out to several key points in favor of Apple – worth around $745 billion today and with cash of $178 billion at hand – entering the auto industry. For example, the automotive TAM (total addressable market) is worth today $10 trillion, with revenues of around $1.6 trillion – far above smartphones $400 billion (annually) and PCs ($266 billion). US driver for example spend around 25% of their free time in the car, with Apple aiming to capture the audience here – especially if cars become autonomous and the driver would be obsolete. The researchers did note they believe Apple should start slow – from the inside – meaning an active implication in the infotainment systems and later in the HMI – human machine interface.