A Reuters report yesterday gave details of a new move on Apple’s ever-changing plans to build electric cars. In a new investment note seen by 9to5Mac, analysts at Morgan Stanley expect that technologists like Apple present “much stronger competition to Tesla” than established OMS.
Morgan Stanley explained that Apple’s interest in entering the electric car industry was probably due to its desire to “enhance the driving experience with vertical integration of hardware, software and services.” At the same time, the company could also enter a “large, fast-growing industry” where it can “dramatically improve the user experience”.
Analysts also believe that the auto business itself may outperform the additional services provided by the car industry:
For Apple to be successful in the auto industry in the future, Apple believes we have the key elements: access to capital, the ability to attract and retain top talent, proven hardware design (from HMI to battery) and a rich ecosystem / service for recurring subscriptions. Earnings. We believe that the value of service opportunities (MAU x ARPU) embedded in the Internet-of-Business (IOC) can automatically dwarf the business (Unit X Price).
Tesla stocks fell sharply yesterday after news of Apple’s revived car effort, and Morgan Stanley expects Apple to represent significant competition for the current top EV maker. Analysts have explained that tech players like Apple “represent more fierce competition” with Tesla than traditional themed automakers.
Apple is also uniquely positioned to “bring new innovations in autonomy and renewable technologies” rather than legacy automakers, the report said.
Finally, Morgan Stanley said in a proposed timeline from yesterday’s Reuters report that Apple has already invested heavily in key technologies that could help develop a car:
Importantly, Apple has recently invested in bringing home five key technologies that can help develop their vehicles – processors, batteries, cameras, sensors and displays. They believe that there are more growth drivers like AR, Payments and Health which will probably appear realistic on the 4% year time horizon soon.
Reuters expects Apple car production to begin in 2024, but the epidemic-related delay could “exceed production start in 2025 or more.” Read the full coverage of our report here.
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