An Apple car has the potential to be “a transformative event” for the automobile and mobility industry in the coming decades, Morgan Stanley analysts wrote in a note to investors last week — much as the iPhone changed the game for mobile phones.
“There’s just so much going on in [electric and autonomous vehicles] and connected tech,” the analysts wrote. “It is perhaps a fitting time of the world’s most valuable company to play its hand in the $10 trillion global mobility market.”
Apple has kept mum about its car ambitions, and the company did not respond to a request for comment on the recent reports.
Although Apple is famous for its design and manufacturing firepower and is flush with cash, cars are a far different and lower-margin business. Still, coming from behind in a new market has been Apple’s M.O.: Apple didn’t invent the smartphone, for example, but it created an innovative, clean, user-friendly design that revolutionized the space and helped it dominate the market.
Here’s what we know about the possible Apple car.
Why would Apple make a car?
Analysts suspect that Apple, and other tech companies such as Google’s Waymo, want in on that opportunity — especially as infrastructure expands to support greater electric vehicle adoption.
“If they continue to wait, could Tesla run so far ahead of them that Apple could never play catch up?” DA Davidson analyst Tom Forte said.
Some experts think it’s more likely Apple will partner with one or multiple car makers to sell a car operating system, self-driving software or other related technology, rather than making the entire vehicle.
“Probably partnering makes the most sense,” said Mike Bailey, director of research at FBB Capital Partners. “The one issue that I’ve heard of is that cars can be less profitable relative to Apple’s other products, so that is a concern if Apple is going to be shifting gears into a less profitable business line.”
“If you look ahead, It’s hard to see the Apple car being the next big thing in the way that, say, cloud has been for Microsoft and Google. But then again, no one really saw cloud coming,” FBB’s Bailey said. “This could be really interesting for Apple, but it seems like a long shot.”
Wait, car-related patents?
Who is working on the project?
A LinkedIn search shows that over the past few years, Apple has hired experienced executives, engineers and supply chain managers from Tesla, Google’s Waymo, Fiat Chrysler, BMW, Ford, Uber and other auto industry leaders.
Project Titan has attracted talent like Doug Field, who developed vehicles at Tesla, Ford and Segway, and Julian Honig, a former Audi designer.
In short, the project’s exact size and makeup are not clear.
What’s next?
But the idea of an Apple car remains a tantalizing possibility.
“Do I think that Apple could be a significant competitor in electric, autonomous vehicles if desired?” asked DA Davidson’s Forte. “Absolutely.”
–CNN’s Matt McFarland and Sherisse Pham contributed to this report.
