Apple Car: 2% of the market would be enough to generate income similar to the iPhone
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In recent days, rumors speculating on an upcoming Apple car have been brought to the fore. According to the Morgan Stanley investment fund, Apple has everything to gain by following its historic strategy.
Last month, we reported that Apple's auto focus was starting to take shape. According to Reuters, the Cupertino company would start production of its cars in 2024.
A juicy market for Apple
According to Apple Insider, in an interview with investors, analyst Katy Huberty spoke about rumors of an Apple-branded self-driving car or a car navigation system developed by the company. According to her, the overall size of the auto market largely explains the company's ambitions.
In the smartphone sector, the total available market offers revenue opportunities amounting to $ 500 billion. On the other hand, with regard to mobility, the size is much larger: 10,000 billion dollars.
Katy Huberty adds: “ Apple would therefore only need 2% of this market to be the size of their iPhone business. "
Moreover, in the smartphone sector, it is indeed profitable with high-end terminals that Apple is looking for, and not to invade the market like some Android manufacturers.
End-to-end control of the project
By applying the strategies already chosen by the company, Katy Huberty raises other points that could potentially give some keys to the next Apple Car.
So, she says, “ Apple only really succeeds when everything is integrated vertically. This involves the design of the components and all parts of the product, the way it is presented and what it gives to the consumer, the software and the ecosystem that surrounds these products. "
Unlike Windows or Android, macOS and iOS are designed strictly for the Mac and the company's mobile devices. For this reason, the analyst is skeptical about a partnership with an existing automaker. She further points out that Apple is investing in key industries such as operating systems, processors, batteries, photography and displays.
However, many investors have pointed out in recent years that car manufacturers' margins are relatively low, well below the 20% typically charged by Apple. Faced with this argument, the analyst recalls that when Apple entered the PC, headphones and connected watch market, the margins of competitors were also very low.
Through an integration strategy, and with a limited number of models, again according to Katy Huberty, “ Apple has demonstrated its ability to enter unprofitable industries while gaining large margins. I don't see how the auto industry would be any different ” .
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