Recently there have been a lot of rumors about Apple looking to get into the auto industry with an Apple Car. According to Wall Street analysts, Apple Car is in the works but it will not be the unique stand-alone car that Apple fans may be expecting from the company.
As per Reuters, Apple’s Project Titan has the goal of producing a stand-alone vehicle by 2024 with next-gen battery technology. Analysts do not believe that CEO Tim Cook will simply start from scratch in a whole new market.
Tim Cook might have a different approach to entering the auto industry with Apple Car
In an investor note written by Wedbush Securities analyst Dan Ives, Ives says that Apple’s chances of releasing their own vehicle by 2024 are quite slim. Due to safety and regulatory issues, an autonomous vehicle would take even longer.
The chances of Apple releasing its own vehicle by 2024 are just 35% to 40%, “given the Herculean-like auto-production capabilities, battery technology ramp, financial model implications, and regulatory hurdles involved in such a game-changing initiative,” wrote Dan Ives
However, there are different ways that are short of an auto-assembly line that Tim Cook could use to gain entry into the new market.
Ives sees Tim Cook developing an imperative partnership with an established auto industry players like Tesla or Volkswagen. CEO of Tesla, Elon Musk, once approached Apple in regards to buying the company when it was witnessing its darkest days.
Not everyone feels the same way, as analysts at Goldman Sachs believe that Apple will go down the same path of being a services provider like it did with the television market, despite the company’s advantage in integration abilities.
Rod Hall of Goldman Sachs wrote:
Tech comapnies want to be in the auto business due to the large amount of time future consumers are likely to spend in self-driving vehicles using information services as they make their way from point A to point B
The profit margins of the auto industry are lower than technology, even though the electric vehicle market could grow to $1 trillion over the next decade providing massive opportunity. This might be one of the reasons why Tim Cook would want to take the services provider route.
Lastly, Ives tried to warn both Apple fans and investors by saying, ”many strategic/product ideas that happen in the labs ultimately never leave the confines of Apple Park.” There have been numerous reports and rumors regarding the possibility of an Apple Car, but it is all hearsay unless or until the tech giant says its peace.
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