As mysterious minivan sightings proliferate, rumored 'Apple Car' seen as $50B US opportunity

Posted:
in AAPL Investors edited March 2015
With the total U.S. car market valued at over $500 billion per year, taking just a 10 percent share would represent a new $50 billion revenue opportunity for Apple, according to one analyst.


This sensor-laden van spotted by AppleInsider reader Bob Boscarelli looks similar to vehicles said to be owned by Apple.


Gene Munster of Piper Jaffray noted that Edmunds estimates 16.4 million new cars were sold in America in 2014, while TrueCar says the average selling price of a vehicle in the U.S. was just over $31,000 in the month of August. Using these numbers, he has estimated the U.S. car market currently reaches over $500 billion in sales per year.

If Apple could achieve just a "moderate success" of 10 percent in the U.S. car market, Munster said it could mean $50 billion in new revenue for the Cupertino, Calif., company. That would be a massive increase of 23 percent over his current estimates for fiscal year 2015.

Munster said early feedback from investors on the prospect of a so-called "Apple Car" has been positive. He believes many on Wall Street continue to wonder what new product categories could "move the needle" for a company the size of Apple.

"We believe the potential for a car gives investors something, along with the Watch and TV, to look at as the next big thing for Apple," he wrote. "We believe this hope should be positive for the multiple on shares of AAPL and help support the stock over the next six months."

Wall Street's reactions come in response to a series of reports that have claimed Apple has been working on developing a self-driving autonomous car. The company is said to have several-hundred workers designing a new electric car code-named "Titan."

One of Apple's sensor-laden vans, spotted in Hawaii by AppleInsider reader matthawaii.
One of Apple's sensor-laden vans, spotted in Hawaii by AppleInsider reader matthawaii.


Separately, a number of minivans said to be owned by Apple have been spotted in the wild, though it's unknown what their actual purpose may be. Given that the mysterious vehicles would require special permits if they were actually self-driving automobiles, it's more likely that Apple is using them to improve its Maps service.

As for why all of the car-related rumors are surfacing now, Munster believes that the information may be coming to light as a way for Apple to "provide investors with some insight... without making any public statements." Doing so might help investors confidently hold on to their stock in the company, with the belief that new and big things are in the works.

"We believe that floating the potential of a car now could be to help investors dream about the type of projects yet to come from Apple," he said.
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Comments

  • Reply 1 of 106
    10% of the car market? I think thats a bit of a stretch for a first time carmaker... I am an Apple fan but that is a ridiculous number.... Think of all the different models and car makers out there...
  • Reply 2 of 106
    fred1fred1 Posts: 345member
    "Separately, a number of minivans said to be owned by Apple have been spotted in the wild, though it's unknown what their actual purpose may be."

    And just how do they know that these minivans are owned by Apple?

    No one knows for sure if Apple is even developing a car and they're already predicting market share and earnings?
    Amazing.

    Now about that TV . . .
  • Reply 3 of 106
    Quote:

    Now about that TV . . .

     

    Typical analysts. Totally clueless. If Apple would go into the pizza business, they would still predict 10% market share. I seriously wonder what it takes to become business analyst... just kindergarten ? Same as this Kuo guy, lots of noise, but always completely wrong.

     

    On the other hand, it's no surprise Apple is looking at the car business. Cars become more and more connected, more software etc.

     

    Just wondering, how will it take before we will see Samsung car prototypes ? They are already in the dishwasher business, so shouldn't too hard for them ;-)

  • Reply 4 of 106
    Quote:

    Originally Posted by Fred1 View Post



    "Separately, a number of minivans said to be owned by Apple have been spotted in the wild, though it's unknown what their actual purpose may be."



    And just how do they know that these minivans are owned by Apple?



    No one knows for sure if Apple is even developing a car and they're already predicting market share and earnings?

    Amazing.



    Now about that TV . . .



    On Saturday, February 14, 2015, Gene Munster was quoted by Fortune as stating, "While we believe Apple can do both a TV and a car, it seems far more likely that we get a TV from Apple in the next five years than a car." Fortune then proceeds with, "Munster points out that the profit margins on cars are even thinner than on television, and that TVs fit more neatly into Apple's hardware/software/services framework than cars do.

     

    Now on Monday, February 16, 2015, Gene Munster decides to jump fully onboard with the car rumors and provides a possible $50 billion opportunity for Apple. Wow!

  • Reply 5 of 106
    Quote:

    Originally Posted by loekf View Post

     

     

    Typical analysts. Totally clueless. If Apple would go into the pizza business, they would still predict 10% market share. I seriously wonder what it takes to become business analyst... just kindergarten ? Same as this Kuo guy, lots of noise, but always completely wrong.

     

    On the other hand, it's no surprise Apple is looking at the car business. Cars become more and more connected, more software etc.

     

    Just wondering, how will it take before we will see Samsung car prototypes ? They are already in the dishwasher business, so shouldn't too hard for them ;-)




    People here know I do not usually bat for Samsung, but this time I have to mention Samsung is already in the car business. Samsung owns a minority stake in Renault Samsung Motors. 

  • Reply 6 of 106
    Quote:

    Originally Posted by dv8or View Post



    10% of the car market? I think thats a bit of a stretch for a first time carmaker... I am an Apple fan but that is a ridiculous number.... Think of all the different models and car makers out there...



    This exactly - Gene Munster has got pretty much everything wrong since 2011, so I wouldn't believe anything he said. If Huberty from Moran Stanley says something about this, I'd take it more seriously.

     

    On topic, if Apple come out with an electric car, they'd be competing with Tesla and maybe they'd get a good chunk of that market, which is less than 1% of the entire market. Of course they'd have all the same problems Telsa have. Setting up charging stations all across the country and ramping up a production line is not even the half of it; breaking into the franchise cartels across the east coast (google or Bing Tesla in New Jersey to see what I am talking about) will be impossible, because they're protected by ancient laws.

     

    If Apple go for the high end of the market, you're probably talking about cars north of $80,000 - Apple's traditional hard core fan base are affluent, but probably not THAT affluent on the whole.

     

    This is probably more to do with mapping, location awareness for iPhones or perhaps an in-car system of sorts. I'd be surprised if Apple actually starts making cars.

  • Reply 7 of 106
    As noted, I think the reason the press has grabbed a hold of this rumor is that when you think about product categories that Apple could get into, where there is significant room for product improvement (which is what Apple does best), while still offering them the ability to make big money, there are only a few options.

    The television set, btw, is not one of them. Although I'm sure Apple could sell more tv's than they could produce, they would need to either sell at such a high price so as not to negatively impact their computer pricing model or reduce their computer pricing model, which does not seem like something they would do.

    They're obviously going to give watches a shot, they've changed the phone market, they've done pretty well with laptops and desktop computers, made the tablet market. Cars? Why not? Tesla figured out how to get into a market that has been all but closed off from new companies (other than what is being produced in China).

    The thing I think they could, and are already, improve on is the energy sector. They're already paving the way to be a company run on renewable energy, so why not build that idea out further and help states, cities, other companies do the same thing. Or even go all the way down to the family home? Tesla is thinking this way, so I would not put it past Apple to have a similar thought.

    The only issue is it's not a sexy, design driven, category, much like they have stayed away from going into the telco business, because they "don't want to just be the pipeline".

    With all of Apple's money, they're going to need to figure out what's next beyond just the typical re-fresh of the existing lines. I'm not talking the next 2 to 5 years, but 10 years out or more, so cars might as well go on the list of potential Apple products.
  • Reply 8 of 106



    Where have I heard this before?  Oh yes, the iPhone.

     

     

    Quote:

    Originally Posted by dv8or View Post



    10% of the car market? I think thats a bit of a stretch for a first time carmaker... I am an Apple fan but that is a ridiculous number.... Think of all the different models and car makers out there...

     

    Hmmm... Where have I heard this before?  Oh yes, the iPhone.

    An Apple Car could reset the entire global automobile industry.

    Imagine the long waiting lists globally to buy this car and 10% looks rather conservative.

  • Reply 9 of 106
    "just a "moderate success" of 10 percent in the U.S. car market"

    Electric cars make up 1.5% of the U.S. Car market, 0.5% global. 10% would be an enormously successful effort (and even for Apple quite unattainable, unless they give them away. After all, Apple is known for doing that).
  • Reply 10 of 106
    Quote:

    Originally Posted by AppleSauce007 View Post

     



    Where have I heard this before?  Oh yes, the iPhone.

     

     

     

    Hmmm... Where have I heard this before?  Oh yes, the iPhone.

    An Apple Car could reset the entire global automobile industry.

    Imagine the long waiting lists globally to buy this car and 10% looks rather conservative.




    Slightly different from the iPhone in the sense that there really isn't one car to suit them all...therefore much less of a chance for one design of vehicle to attain those sort of numbers. 

  • Reply 11 of 106
    jungmarkjungmark Posts: 6,716member
    10%? Is this clown crazy? We know nothing about this alleged car but 10% Of the market?
  • Reply 12 of 106
    pmzpmz Posts: 3,433member

    Self-driving cars on the road are not in our lifetime.

     

    It is not a matter of technical hurdles...those will be solved eventually. Its a matter of demand, and public cooperation. No one has any interest in it. TO even the most tech savvy people, self driving cars as anything more than a vague concept, are an eyeroll.

     

    And then there's the Malcolm effect. Everyone that's behind this idea, so preoccupied with whether or they could that they didn't stop to think if they should. And anytime they are questions with "Why do this again?" they fire back with the meaningless accident/death statistics that result from driving.

     

    Driving is dangerous. LIFE is dangerous. Its all part of the experience. Driving is a huge gateway to freedom and responsibility for most people. Its a milestone in life. Its serves its purpose in the coming of age of youth.

     

    If any technology company is worried about making a dent in automobile injuries and deaths, perhaps they should be focusing their efforts on REAL things that have REAL ability to make a difference....like designing vehicles that are safer, or educating the public on safer driving, or building new road infrastructure that is preventative to the most deadly types of accidents. Instead of focusing on a stupid pipe dream that will not be widely accepted enough to replace the current norm.

     

    Like I said, maybe, MAYBE in 100 years when all of the current generation is gone, is their a chance at changing the societal norm of driving your own vehicle. But in that time, so many other improvements could be made to make driving safer, if only the companies with the ability would focus on that instead of a fantasy.

  • Reply 13 of 106
    jd_in_sbjd_in_sb Posts: 1,492member
    All these Applw Car rumors started with the photo of a van. I expect Samsung to launch a car in the fall.
  • Reply 14 of 106
    mobiusmobius Posts: 378member
    "We believe that the potential of a floating car now could be to help investors dream about the type of projects yet to come from Apple," he said.

    There...FTFY...well it is 2015 after all!
  • Reply 15 of 106
    MacProMacPro Posts: 18,373member
    dv8or wrote: »
    10% of the car market? I think thats a bit of a stretch for a first time carmaker... I am an Apple fan but that is a ridiculous number.... Think of all the different models and car makers out there...

    If, and I stress if, Apple were entering this market I would think 10% is a joke indeed but in the way you think. Within five to ten years they would have +20% at least, and 90% of the world wide profits in car sales.
  • Reply 16 of 106
    MacProMacPro Posts: 18,373member
    jd_in_sb wrote: »
    All these Applw Car rumors started with the photo of a van. I expect Samsung to launch a car in the fall.

    Well, the consumer electronics division might be asking for permission to go there at least. I bet all the divisions that make money and are unrelated to their crappy phones and tablets are worried they do though.
  • Reply 17 of 106
    MacProMacPro Posts: 18,373member
    jungmark wrote: »
    10%? Is this clown crazy? We know nothing about this alleged car but 10% Of the market?

    As I just said, this is Apple. If they do enter this market expect 90% of world wide market profits within 10 years, the actual sales are not relevant to that number but they will be far more than 10%.
  • Reply 18 of 106
    Agree with many other posts here. That whole 10% number is completely pulled out of the air.

    According to some quick research (which is apparently much more than a highly paid consultant/idiot quoted in this article can do), the best selling vehicle in the United States is the Ford F150. About 54,000 new ones were sold in January.

    Any guesses as to the percentage of total vehicle sales?

    About four percent. 3.996 by my math.

    So this idiot analyst thinks Apple can sell TWO AND A HALF TIMES more vehicles per year than the current reigning champion?

    Wow. That dude needs a serious head examination.
  • Reply 19 of 106

    Samsung is making cars since before Steve returned to Apple

    http://en.wikipedia.org/wiki/Renault_Samsung_Motors

  • Reply 20 of 106
    calicali Posts: 3,495member
    Oh no!!

    If Apple makes %23 percent of their money from cars they're doomed!!
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