Could Apple be a winner in the new market of self-driving electric vehicles?
Wall Street in the U.S. is tumultuous after reports that Apple will release self-driving electric vehicles in 2024. While there is an expectation that it will be an innovative product that will be responsible for the post-iPhone, the pessimism that it will be difficult to cross the high threshold of the automobile market is difficult.
In the meantime, investment bank Morgan Stanley and RBC Capital Markets evaluated that Apple has several advantages to be successful in the electric vehicle market, Business Insider reported on the 22nd (local time).
Making an electric car new is quite difficult. It is difficult to challenge easily due to some ambition.
However, in this aspect, Apple is said to have strengths over any company. It was rated by Morgan Stanley and RBC Capital Markets.
First of all, Apple is a company with a large pocket. He also has a wealth of experience in manufacturing luxury hardware such as iPod, iPhone, and iPad. Strong brand power and service-based ecosystem can also be a big force for Apple, who is seeking to enter the electric vehicle market.
RBC Capital Markets analyst Joseph Spak and Morgan Stanley and Adam Jonas predict that Apple will be able to secure the best talent in the industry with relative ease with its strong funding.
Apple has more than $191 billion in cash as of the end of September, the end of fiscal 2020. You can guess how much Apple’s power is compared to the fact that the amount of funds secured so far by the electric car startup Rivian, which was invested by Amazon, is $6 billion.
Apple’s strong brand power can also be a big force when it enters the automotive market, analyst Joseph Spock said. Morgan Stanley’s Adam Jonas explained that Apple is benefiting from “a rich ecosystem system that leverages ever-increasing subscription and service revenue,” and that Apple also has an advantage.
Apple’s service business sales, including Apple TV, Apple Music, App Store, and iCloud, are growing rapidly in recent years. In addition to car sales, industry experts point out that the importance of software is increasing in the automotive market because there is an opportunity to generate additional sales in the form of subscriptions through wireless software updates. Tesla is also planning to introduce a monthly subscription-type fully autonomous driving function early next year.
Analysts predict that the electric vehicle project is a different area than mobile phones and wearables, but it will benefit from vertical integration. “Importantly, Apple recently invested in developing five key technologies to help in its automotive development: the processor, battery, camera, sensor, and display,” Adam Jonas said in a memo.
Despite these advantages, analysts predict that Apple’s success in electric vehicles will depend on which automaker it works with. Reuters predicted that Apple would entrust automobile manufacturing to its partners.
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However, Morgan Stanley said Apple, who decided to work with a manufacturing partner, is in a better position to compete with Tesla than traditional automakers.
“From Tesla’s point of view, I think technology companies like Apple will compete much more strongly than traditional manufacturers or traditional OEMs,” said Morgan Stanley analyst. “We can be in a better position to bring new innovations in technology (ex, storage).”