Morgan Stanley: Apple Car, if true, ‘one of the most important moments in transportation’

“Weighing in today on The Journal’s story yesterday that Apple’s (AAPL) going to ship its own car in 2019 are Morgan Stanley analysts Adam Jonas, who follows Tesla Motors (TSLA), and is one of the biggest bulls on its stock (he recently set a $465 price target, as my colleague Ben Levisohn noted), and Katy Huberty, the Morgan analyst who regularly follows Apple, and who is a bull on its stock,” Tiernan Ray reports for Barron’s. “The assessment of the authors, and their co-author colleagues: This is big.”

We believe the opportunity for tech firms to disrupt the auto industry is large enough to fundamentally and permanently change how investors view transportation… setting off a wholesale reassessment of end market sizing, growth, competitive dynamic, margin potential and valuation […] The addressable market for mobility is on the order of $10 trillion (10 trillion vehicle miles x $1/mile), more than 13% of global GDP. This figure ignores the value of the time of the driver, infrastructure, social and environmental costs… If the world’s most valuable company were to make a car, we strongly believe it will be an all- electric, battery-powered vehicle. Apple Car as per Richard ScarryHaving a company with Apple’s resources and technical expertise throw its weight behind EVs could accelerate development and consumer adoption.

Ray reports, “Interestingly, the authors make no mention of Tesla, nor of General Motors nor any other auto maker, but they opine, ‘a potential confirmation of Apple making a move into the car industry could represent one of the most important moments in the history of transportation.'”

Read more in the full article here.

MacDailyNews Take: As we wrote back in March: When Apple enters markets, it’s because they can bring something(s) so unique to the table that significant disruption is inevitable.

Apple does not enter markets simply to compete with the rest of the existing dreck. Apple only enters markets when they can disrupt them. See: Palm, BlackBerry, Nokia, etc. In other words, it’s never too soon to start praying for more government bailouts, GM et al.

When Apple looks at what categories to enter, we ask these kinds of questions: What are the primary technologies behind this? What do we bring? Can we make a significant contribution to society with this? If we can’t, and if we can’t own the key technologies, we don’t do it. That philosophy comes directly from [Steve Jobs] and it still very much permeates the place. I hope that it always will.Apple CEO Tim Cook, March 18, 2015

SEE ALSO:
Former GM Vice Chairman Bob Lutz: Apple Car ‘is going to be a gigantic money pit’ – September 22, 2015
Apple speeds up electric-car efforts, aims for 2019 ‘ship date’ – September 21, 2015
Apple meets California DMV officials to discuss ‘autonomous vehicle’ – September 18, 2015
Documents confirm Apple is building self-driving car, Project Titan further along than many suspect – August 14, 2015
Apple Car development proceeds apace – July 27, 2015
Apple hires veteran Fiat Chrysler auto industry executive – July 20, 2015
What’s up with Carl Icahn’s sudden obsession with the Apple Car? – May 18, 2015
Survey: 77% of hybrid or electric vehicle owners would likely buy an Apple Car – May 13, 2015
Apple’s ‘Project Titan’ could reshape the auto world – February 22, 2015
Apple Car: Forget ‘electric,’ think hydrogen fuel cells – February 20, 2015
Meet Steve Zadesky, the reported leader of Apple’s ‘Project Titan’ – February 17, 2015
Forget the rumor: Apple will never build cars – February 17, 2015
The real battle Apple is waging in autos – February 17, 2015
O’Leary: Yes, give me the Apple car – February 17, 2015
Will Apple become a car maker or a platform/content aggregator? – February 17, 2015
An Apple Car is exactly what investors want – February 17, 2015
Apple’s electric car dreams may bring auto industry nightmares – February 17, 2015
Jean-Louis Gassée: The fantastic Apple Car is a fantasy – February 16, 2015
Apple is already positioned to be a car company in many ways – February 16, 2015
Why Tim Cook would want to build an Apple Car – February 14, 2015
Apple working on self-driving electric car, source says – February 14, 2015
Apple’s project ‘Titan’ gears up to challenge Tesla in electric cars – February 13, 2015
Apple’s next big thing: The Apple Car? – February 13, 2015
Apple hiring auto engineers and designers – February 13, 2015
Apple working with Intelligent Energy on fuel cell technology for mobile devices, sources say – July 14, 2014
North Carolina regulators approve Apple’s 4.8-megawatt fuel cell facility at Maiden data center – May 23, 2012
New aerial images of Apple’s planned NC fuel cell, solar farms published – April 7, 2012
Apple’s massive fuel cell energy project to be largest in the U.S. – April 4, 2012
Apple patent application reveals next-gen fuel cell powered Macs and iOS devices – December 22, 2011
Apple patent app details highly-advanced hydrogen fuel cells to power portable devices – October 20, 2011

21 Comments

  1. Re-run of an old record ….

    Palm CEO, Ed Colligan’s response to the iPhone in 2007:

    We’ve learned and struggled for a few years here figuring out how to make a decent phone,” he said. “PC guys are not going to just figure this out. They’re not going to just walk in.’

    GM Vice Chairman Bob Lutz response to the Car in 2015:

    Apple Car ‘is going to be a gigantic money pit’

    Look familiar; its called Revolution striking at the heart of yet another industry, to upend the cosy status quo …. bring it on!!

  2. VW fiasco is a wake-up call that any car company that wishes to continue to exist and be relevant must move swiftly.

    And Apple again, will lead a new generation of auto industry innovation…

  3. The existing car makers do not have the “tools” to design, build, and sell the car of the future, which will not be based on an Internal Combustion Engine (ICE). They existing car makers are tied to the past and have huge overheads they need to cover by selling “bashed metal”; mostly non-descript vehicles.

    Apple is better suited than Tesla and Google to be a serious contender in the next generation of e-car. Apple actually makes stuff. And their design, software, manufacturing, and management teams are tops.

    Lastly, Apple cannot afford NOT to make a bid to envision, design, produce, and sell the car of the future. It is a huge market. Apple’s teams are keen to do this exciting work. And Apple has huge financial resources. If Apple wants to be a player in the market of “future cars”, I have every confidence they will do so.

    1. Correction: Apple actually contracts to have others make stuff they design, i.e., correct me, but I don’t know that they actually build anything any more themselves, except perhaps the final assembly of the Mac Pros. Not exactly a minor detail in the long run as many industries which increasingly outsourced more and more of their manufacturing to Asian and other countries have learned…..

      …tho’ I stand ready to be corrected on this score….

      1. While it’s true that Apple does not own the factories that make most of Apple’s products, it’s also true that most of the factories used to make Apple’s products were not suitable for the task until Apple invested in the sophisticated equipment needed.

        Remember when aluminium cases were introduced and Apple financed a thousand automatic milling machines? Remember when Apple wanted quartz screens and financed a company that claimed it could manufacture them, but couldn’t? Don’t forget just how much Apple has invested in the assembly factories in China, the display companies in Japan, or TMSC.

        Apple will probably require facilities that conventional car manufacturers do not currently possess as there is no large scale demand for that sort of technology. My guess is that much of the manufacturing of an Apple Car will be done in factories that currently do not exist.

        It doesn’t really matter who actually makes the products for Apple. The key thing is that Apple designs the products and also the processes by which they are made.

      2. You are splitting hairs, dude. Apple gets stuff made! They design stuff, produce great software, and get their products made. Really well.

        Owning your own factories and hiring contract manufacturers are substitutes. Apple’s approach is probably smarter than doing it yourself. But even with contract manufacturing, Apple has teams that manage this process Very Well.

  4. AppleCar? No, not really. Seen any Apple dealerships or Apple automobile factories. Of course not. Some well established auto manufacturing firm may partner with Apple, but the hood ornament will not be fruity.

  5. Would the government bailing out other players in the car industry constitute a hidden subsidy to Apple’s competitors.
    Let me rephrase “hidden” and suggest “BLATANT” instead.

  6. I’m still trying to identify just what in this industry is the cash cow to be “disrupted”. Sure, there’s bags of money, but just who is the one with fat fat profits to be the disruption target?

    Note that I’ve not even mentioned any technology stuff yet….

    On tech, I think that the answer is with fuel cells, not batteries. Sure, there will be battery tech onboard, but a fast battery charger doesn’t solve the range issues like a fuel source does. The interesting part IMO will be if it contains a solar-to-hydrogen storage system….panels on your own roof to fuel your car.
    But the first part is still the business case: how to make a profit. Don’t forget that for all the hype on Tesla, they’re still losing approx $4K per vehicle sold.

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