A recent report had claimed that Apple Car will launch by 2024, however, analyst Ming-Chi Kuo has shared reported today that he does not expect it to be ready before 2025 – 2027.
Kuo’s new note to investors says that if Apple Car development starts this year, as per plan, it is unlikely to launch before 2025 – 2027. This means that any potential delays in starting development this year, considering that it is already over, could mean that Apple Car launch could be pushed to 2028 or beyond.
Apple Car could launch 2025 or later
Here is Kuo’s note, as shared by MacRumors:
We predicted in a previous report that Apple will launch Apple Car in 2023–2025 […] However, our latest survey indicates that the current development schedule of Apple Car is not clear, and if development starts this year and everything goes well, it will be launched in 2025–2027 at the earliest. Due to changes in the EV/self-driving market and Apple’s high-quality standards, we would not be surprised if Apple Car’s launch schedule is postponed to 2028 or later.
Kuo’s note also tried to calm down investors from keeping high expectations from Apple Car. Sever since Reuter’s Apple Car report came out, the market responded very positively. Apple’s market cap has grown by more than $100 billion since then. Kuo gave an example of Apple’s lack of success with smart speakers, as an indication that the company might not be successful with Car as well. However, his note fails to mention that Apple has released its HomePod and HomePod mini speakers in only a handful of markets, and not really put in a lot of effort to ensure that it sells well, compared to what it did with iPhone, Apple Watch, and AirPods.
The market has high expectations for Apple Car. Still, we remind investors that although Apple has a variety of competitive advantages, it is not always successful in new
business. For example, Apple failed to enter the smart speaker market. The demand for HomePod and HomePod mini were lower than expected, and the development of new smart speaker models had been temporarily suspended. The competition in the EV/self-driving car market is fiercer than that for smart speakers, so we think it’s perilous to jump to the conclusion that Apple Car will succeed.
If Apple Car wants to succeed in the future, the key success factor is big data/AI, not hardware. One of our biggest concerns about Apple Car is that when Apple Car is launched, the current self-driving car brands will have accumulated at least five years of big data and be conducive to deep learning/AI. How does Apple, a latecomer, overcome this lagging gap?
The major question that everyone has is whether Apple would be able to find profitability in the automotive industry which is popular for “low-margins”. Analysts believe that Apple will have to disrupt the industry through its hardware or software integration to find these profits. Goldman Sachs believes that Apple will take the same steps with its electronic vehicle that it took with the TV industry, by becoming a service provider.
If we read the tea leaves correctly, Apple Car has to be a combination of battery breakthroughs, ingenious hardware innovation, and software integration, for it to be popular amongst consumers. Until Apple officially announces anything, take all reports by analysts with a grain of salt.
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