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Entrepreneur
Kurra Bewarse
Username: Entrepreneur

Post Number: 2937
Registered: 05-2011

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Posted on Tuesday, December 22, 2020 - 5:53 pm:   

Apple Analysts Pros/cons:

1. Evercore analyst Amit Daryanani also doubts Apple would enter the low-margin, capital-intensive car business. But he suggested that if the company had successfully invented a breakthrough in battery or self-driving technology, it could make the project worthwhile.

2. Morgan Stanley analysts said that companies like Apple want to break into the automotive industry not just for the money that can be made selling cars and parts, but also because people riding in automobiles are a captive audience whose time could be monetized. The team led by Adam Jonas and Katy Huberty cited an estimate that there are over 600 billion hours of time spent in cars per year.

Morgan Stanley analysts suggested that Apple could sell some kind of transportation subscription, not by competing with traditional automotive companies that sell cars.

“It’s not that we believe Apple wants to get into the auto industry as conceived by today’s auto companies,” the Morgan Stanley analysts wrote. Instead, they think that Apple may be aiming to build a better car experience using its design and software chops, and could monetize it through its current matrix of subscription and services products.

3. Baird analyst William Power wrote in a Tuesday note that cars are a multi-trillion dollar market, a “massive long-term global opportunity,” and cited the firm’s forecast that Tesla’s revenue could grow 40% this year to $42.2 billion, suggesting a possible outcome for an Apple-branded car. (Apple reported revenue of $274.51 billion in its fiscal 2020, with gross margins around 38%.)

4. Longtime Apple analyst and Loup Ventures founder Gene Munster wrote on Monday that Apple’s car business has two possible paths: Building an Apple-branded car, or building licensable software for other automakers, but he notes that that option would allow vehicle look-and-feel to be in the hands of other companies.

“This is Apple’s wheelhouse: find a big market that a competitor has already made progress in, enter the market a few years later, and revolutionize it,” Munster wrote.

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