Gene Munster: Yes, it makes sense for Apple to make a car

Loup Managing Partner and longtime Apple analyst Gene Munster puts the odds at 50/50 that the “Apple Car” will be on the market by 2026. It makes sense for Apple to make vehicles, Munster says.

Gene Munster and Rebecca Mulberg for Loup:

It’s been a long and winding road for Project Titan. The initiative is entering into its ninth year of development which is substantial when compared to iPad, the iPhone and the iPod, which took 6 years, 3 years and 1.5 years, respectively. If you’re curious, we believe an actual Apple television was in development for 6 years before the project was ended in 2015. That means Project Titan holds the title for the longest investment period of any Apple product to date, longer than the company’s anticipated MR headset which has been in development for about 6 years.
Does it make sense for Apple to make a car? The simple answer: Yes. The concept of the car is fundamentally changing. The car is no longer an engine on wheels but a computer on wheels. Tesla has proven the power of vertically-integrating software, hardware and services in auto—a playbook that Apple wrote for devices.
Another reason why Apple should make a car is that it will singlehandedly solve their growth challenge. In 2023, the company will hit $400B for revenue and, given the law of large numbers, it’ll be difficult to grow if the company pursues products geared toward mid-sized addressable markets. The auto market is massive enough to move up Apple’s growth rate. As a point of reference: Each year, there are about 75m cars sold globally. Applying a $32k average selling price suggests that the addressable market is about $2.5T. If Apple were to capture 2% of vehicle sales (1.5m cars) at an average price of $100k per car, that would add $150B a year in revenue. Assuming Apple’s core business grows at 5% over the next 7 years, and Apple sells 1.5m cars in 2030, Project Titan would account for 25% of Apple’s overall business in 2030.

MacDailyNews Take: It’s coming. The only question is when.
Apple is working on actual vehicles, not just some “vehicleOS” they’d license out to others (which was always a stupid proposition, as anyone who’s studied how Apple works for more than 3 minutes knows implicitly). — MacDailyNews, August 28, 2018
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