So this analyst saw an Apple owned car, ergo apple will be entering the automotive market.
I think he is thinking too small. Apple is building a huge new campus and several Apple stores, clearly they are going to enter the general construction market! If they capture only 10%, that's a $60B business! Plus, rumor has it that their new campus will have _several_ cafeterias. Apple Restaurants can't be too far behind! Another $10B+ business! And every rendering of their new campus has _trees and plants all over the place_: Apple Farms are just around the corner!
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...
It's 10% of the US market, not global. The global market is about 70m units. The largest manufacturers have production runs of around 9m units, Tesla has about 55k. If Apple targeted 1m units at $50k retail price then that satisfies the $50b revenue with under 1.5% of the worldwide market. It's unrealistic for a first-year model because they have to assess demand and get past all kinds of regulations but they can top Tesla's volume no problem. VW is probably the best target reference as they make the most revenue.
Typical analysts. Totally clueless. If Apple would go into the pizza business, they would still predict 10% market share.
It always reminds me of the Carlsberg ads:
If Apple made pizzas, they'd probably be the best pizzas in the world. We know it's not true in all cases. They didn't make the best server hardware, cloud software, displays, mice, printers etc, possibly smartwatches.
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.
I can see quite a high demand for it. Parents having automated cars to pick up kids from school. Taxis are a big thing and driverless is safer. The following site says Uber passes 80% of $10b revenue to drivers:
Cut the drivers and taxi fares go down massively. No more need to deal with public transport if taxis are dirt cheap and you can go wherever you want. Cities can enforce driverless cars everywhere and it means no more parking problems. They can just be small two seat pods that can be chained together if you have kids. If they had two wheels like a Segway, they wouldn't need steering, you just slow one wheel to turn. They'd change batteries or return to a depot to charge themselves. These would be low speed vehicles (below 20mph). People would park their own electric cars outside the city where they can be plugged in all day while people commute around the city in driverless pods that you'd call using a smartphone.
I can see quite a high demand for it. Parents having automated cars to pick up kids from school. Taxis are a big thing and driverless is safer.
One huge challenge for driverless cars is coping with the largely lawless unpredictable human drivers on the road. If all vehicles were driverless it would work pretty well, but since driverless cars would have to obey the law, they wouldn't even be able to get out of the driveway during rush hour.
Claiming that Apple could capture a 10% market share is hysterical. They're moving into a niche inside a niche with electric minivan. Even if they captured 100% of those sales, we're looking at well under 1% of the auto market.
When I was studying engineering, we had an adage that "Those who can, do. Those who can't, teach." I suggested that some of our teachers wouldn't be all that great with real-life projects.
There's a level beyond that, however, in that those who can neither do nor teach typically become technology pundits, making outlandish predictions that fall flat. Gene Munster of Piper Jaffray illustrates that to near perfection.
Will Apple grab a $50 billion share of the auto market? Not a chance. They have no more chance of whipping Mercedes with a luxury mini-van than Ford has of creating a world-shattering smartphone.
I just hope Apple doesn't lose so much money on this alleged move, that they must raise the prices on what they do know how to make.
Gene has been wrong about many things. But he hasn't been wrong about this:
APPLE IS A BUY. BUY THE STOCK.
Gene has been yelling that out for years. Even during the rough times in early 2013. When Apple's stock priced cratered and almost every single Wall Street Analysis was dropping their target prices Gene remained a steadfast bull of Apple. I will give him credit for that. He has gotten many of the details wrong about Apple but his overall thesis of the company was correct. Unlike 90% of Wall street that thought Samsung was going to kill Apple Gene said that was idiotic.
As someone who works on Wall St, I can tell you no one was saying Samsung would kill Apple. No one at all... just because Gizmodo says something, doesn't mean it's true.
Apple's stock underperform historically has had more to do with investment strategies on the institutional side of the market, not because Wall St is shunning it.
When I was studying engineering, we had an adage that "Those who can, do. Those who can't, teach." I suggested that some of our teachers wouldn't be all that great with real-life projects.
Primary education is one area that Apple should concentrate on. With all of the market segments they are rumored to be entering, they are going to need way more engineers. Might as well start raising them from scratch rather than searching for them through classified ads.
I could easily see Apple capturing 10% of the auto DOLLARS in the USA after 5-10 years of being on the market.
Notice Gene said 10% of DOLLARS not UNITS.
Good point however he also states that the average selling price is $31K which is Honda's sweet spot so in those terms Honda's market share and revenue are probably both around 10%. I also think one has to consider that Honda sells several different models where as Apple usually focuses on one or two models of their products. I doubt Apple would go for the luxury market segment. If they released a car I would expect it to be in the mid $30k - $40K range.
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.
Gene has been wrong about many things. But he hasn't been wrong about this:
APPLE IS A BUY. BUY THE STOCK.
Gene has been yelling that out for years. Even during the rough times in early 2013. When Apple's stock priced cratered and almost every single Wall Street Analysis was dropping their target prices Gene remained a steadfast bull of Apple. I will give him credit for that. He has gotten many of the details wrong about Apple but his overall thesis of the company was correct. Unlike 90% of Wall street that thought Samsung was going to kill Apple Gene said that was idiotic.
He was very wrong about it for a couple of years when Apple dropped 40% in 2012.
If you had shorted Apple from 2012 to 2013, you would have made a killing.
I can see quite a high demand for it. Parents having automated cars to pick up kids from school. Taxis are a big thing and driverless is safer.
One huge challenge for driverless cars is coping with the largely lawless unpredictable human drivers on the road. If all vehicles were driverless it would work pretty well, but since driverless cars would have to obey the law, they wouldn't even be able to get out of the driveway during rush hour.
Not to mention the largely lawless unpredictable pedestrians, cyclists, animals etc.
My film industry former studio CEO friend says Apple is probably being forced by Amazon's moves to go ahead and challenge Netflix directly. He says the powers that be in Hollywood are hoping Apple does this as they have always disliked Netflix.
One huge challenge for driverless cars is coping with the largely lawless unpredictable human drivers on the road. If all vehicles were driverless it would work pretty well, but since driverless cars would have to obey the law, they wouldn't even be able to get out of the driveway during rush hour.
I dunno. The Google self-driving cars here in Mountain View seem to work just fine. I spot them on the road quite frequently.
Heck, and I'd rather be behind one of those cars rather some thing being piloted by an addle-brained, attention deficit disorder, texting/Facebooking numbskull.
I dunno. The Google self-driving cars here in Mountain View seem to work just fine. I spot them on the road quite frequently.
When I moved to NYC shortly after graduating from college, one of my coworkers was showing me around. She also gave me some driving tips.
1) When the light turns green rev it up and floor it, even patch out in second gear for a dramatic effect, otherwise the pedestrians will not stop crossing the street on the other side of the intersection.
2) Never make eye contact with other drivers, because if they know you see them, they will not let you switch lanes. You have to pretend you don't see them in your blind spot. Just change lanes without signaling and make them hit the brakes. If they honk then turn on your signal as an apology. It is the pretend you are clueless technique.
I doubt Apple would go for the luxury market segment. If they released a car I would expect it to be in the mid $30k - $40K range.
How do you figure? Apple wants to get into the car business so it can start competing with the low-to-mid-range manufacturers? They don't do that now, why would they do that in cars? At that level the ONLY way to make the same kind of profits margins they do on their current products is by volume. 10% of the car business is not enough to make the kinds of profits Apple stock holders are used to. And what about the investment in infrastructure? Custom Apple Car dealerships and service centers, brand new manufacturing plants, distribution and delivery centers, a new class of custom trained mechanics. All of that costs money. Lot's of it, and will eat into those low profit margins fast. Apple is NOT the "Volkswagen" of anything, so why would they take that philosophical approach with cars? And really, it takes a certain type of person to drive a car called a Bug, or a Mini ... how big is the customer base going to be for an "Apple"?
I doubt Apple would go for the luxury market segment. If they released a car I would expect it to be in the mid $30k - $40K range.
How do you figure? Apple wants to get into the car business so it can start competing with the low-to-mid-range manufacturers? They don't do that now, why would they do that in cars?
I realize the iPhone and the MBP are priced at the top of their respective categories, however, the difference between the top and the bottom of those markets is only a few hundred dollars. People can still afford to buy the best. The auto industry is completely different. The difference between a Scion and a Mercedes can be tens of thousands of dollars. If Apple releases a car, at least one model needs to be affordable to the masses.
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%.
Doubtful. People would pay a couple hundred more for a phone. They won't pay thousands or tens of thousands more for a car.
Comments
This is the top 8 market share in the US from September 2014,
10% is bigger than Honda.
So this analyst saw an Apple owned car, ergo apple will be entering the automotive market.
I think he is thinking too small. Apple is building a huge new campus and several Apple stores, clearly they are going to enter the general construction market! If they capture only 10%, that's a $60B business! Plus, rumor has it that their new campus will have _several_ cafeterias. Apple Restaurants can't be too far behind! Another $10B+ business! And every rendering of their new campus has _trees and plants all over the place_: Apple Farms are just around the corner!
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.
And it will be machined from a solid block of aluminum.
It's 10% of the US market, not global. The global market is about 70m units. The largest manufacturers have production runs of around 9m units, Tesla has about 55k. If Apple targeted 1m units at $50k retail price then that satisfies the $50b revenue with under 1.5% of the worldwide market. It's unrealistic for a first-year model because they have to assess demand and get past all kinds of regulations but they can top Tesla's volume no problem. VW is probably the best target reference as they make the most revenue.
It always reminds me of the Carlsberg ads:
If Apple made pizzas, they'd probably be the best pizzas in the world. We know it's not true in all cases. They didn't make the best server hardware, cloud software, displays, mice, printers etc, possibly smartwatches.
I can see quite a high demand for it. Parents having automated cars to pick up kids from school. Taxis are a big thing and driverless is safer. The following site says Uber passes 80% of $10b revenue to drivers:
http://www.businessinsider.com/ubers-revenue-2014-11
Cut the drivers and taxi fares go down massively. No more need to deal with public transport if taxis are dirt cheap and you can go wherever you want. Cities can enforce driverless cars everywhere and it means no more parking problems. They can just be small two seat pods that can be chained together if you have kids. If they had two wheels like a Segway, they wouldn't need steering, you just slow one wheel to turn. They'd change batteries or return to a depot to charge themselves. These would be low speed vehicles (below 20mph). People would park their own electric cars outside the city where they can be plugged in all day while people commute around the city in driverless pods that you'd call using a smartphone.
One huge challenge for driverless cars is coping with the largely lawless unpredictable human drivers on the road. If all vehicles were driverless it would work pretty well, but since driverless cars would have to obey the law, they wouldn't even be able to get out of the driveway during rush hour.
When I was studying engineering, we had an adage that "Those who can, do. Those who can't, teach." I suggested that some of our teachers wouldn't be all that great with real-life projects.
There's a level beyond that, however, in that those who can neither do nor teach typically become technology pundits, making outlandish predictions that fall flat. Gene Munster of Piper Jaffray illustrates that to near perfection.
Will Apple grab a $50 billion share of the auto market? Not a chance. They have no more chance of whipping Mercedes with a luxury mini-van than Ford has of creating a world-shattering smartphone.
I just hope Apple doesn't lose so much money on this alleged move, that they must raise the prices on what they do know how to make.
Gene has been wrong about many things. But he hasn't been wrong about this:
APPLE IS A BUY. BUY THE STOCK.
Gene has been yelling that out for years. Even during the rough times in early 2013. When Apple's stock priced cratered and almost every single Wall Street Analysis was dropping their target prices Gene remained a steadfast bull of Apple. I will give him credit for that. He has gotten many of the details wrong about Apple but his overall thesis of the company was correct. Unlike 90% of Wall street that thought Samsung was going to kill Apple Gene said that was idiotic.
As someone who works on Wall St, I can tell you no one was saying Samsung would kill Apple. No one at all... just because Gizmodo says something, doesn't mean it's true.
Apple's stock underperform historically has had more to do with investment strategies on the institutional side of the market, not because Wall St is shunning it.
When I was studying engineering, we had an adage that "Those who can, do. Those who can't, teach." I suggested that some of our teachers wouldn't be all that great with real-life projects.
Primary education is one area that Apple should concentrate on. With all of the market segments they are rumored to be entering, they are going to need way more engineers. Might as well start raising them from scratch rather than searching for them through classified ads.
Notice Gene said 10% of DOLLARS not UNITS.
Good point however he also states that the average selling price is $31K which is Honda's sweet spot so in those terms Honda's market share and revenue are probably both around 10%. I also think one has to consider that Honda sells several different models where as Apple usually focuses on one or two models of their products. I doubt Apple would go for the luxury market segment. If they released a car I would expect it to be in the mid $30k - $40K range.
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.
Gene has been wrong about many things. But he hasn't been wrong about this:
APPLE IS A BUY. BUY THE STOCK.
Gene has been yelling that out for years. Even during the rough times in early 2013. When Apple's stock priced cratered and almost every single Wall Street Analysis was dropping their target prices Gene remained a steadfast bull of Apple. I will give him credit for that. He has gotten many of the details wrong about Apple but his overall thesis of the company was correct. Unlike 90% of Wall street that thought Samsung was going to kill Apple Gene said that was idiotic.
He was very wrong about it for a couple of years when Apple dropped 40% in 2012.
If you had shorted Apple from 2012 to 2013, you would have made a killing.
One huge challenge for driverless cars is coping with the largely lawless unpredictable human drivers on the road. If all vehicles were driverless it would work pretty well, but since driverless cars would have to obey the law, they wouldn't even be able to get out of the driveway during rush hour.
Not to mention the largely lawless unpredictable pedestrians, cyclists, animals etc.
One huge challenge for driverless cars is coping with the largely lawless unpredictable human drivers on the road. If all vehicles were driverless it would work pretty well, but since driverless cars would have to obey the law, they wouldn't even be able to get out of the driveway during rush hour.
I dunno. The Google self-driving cars here in Mountain View seem to work just fine. I spot them on the road quite frequently.
Heck, and I'd rather be behind one of those cars rather some thing being piloted by an addle-brained, attention deficit disorder, texting/Facebooking numbskull.
But that's just me...
I dunno. The Google self-driving cars here in Mountain View seem to work just fine. I spot them on the road quite frequently.
When I moved to NYC shortly after graduating from college, one of my coworkers was showing me around. She also gave me some driving tips.
1) When the light turns green rev it up and floor it, even patch out in second gear for a dramatic effect, otherwise the pedestrians will not stop crossing the street on the other side of the intersection.
2) Never make eye contact with other drivers, because if they know you see them, they will not let you switch lanes. You have to pretend you don't see them in your blind spot. Just change lanes without signaling and make them hit the brakes. If they honk then turn on your signal as an apology. It is the pretend you are clueless technique.
I doubt Apple would go for the luxury market segment. If they released a car I would expect it to be in the mid $30k - $40K range.
How do you figure? Apple wants to get into the car business so it can start competing with the low-to-mid-range manufacturers? They don't do that now, why would they do that in cars? At that level the ONLY way to make the same kind of profits margins they do on their current products is by volume. 10% of the car business is not enough to make the kinds of profits Apple stock holders are used to. And what about the investment in infrastructure? Custom Apple Car dealerships and service centers, brand new manufacturing plants, distribution and delivery centers, a new class of custom trained mechanics. All of that costs money. Lot's of it, and will eat into those low profit margins fast. Apple is NOT the "Volkswagen" of anything, so why would they take that philosophical approach with cars? And really, it takes a certain type of person to drive a car called a Bug, or a Mini ... how big is the customer base going to be for an "Apple"?
I doubt Apple would go for the luxury market segment. If they released a car I would expect it to be in the mid $30k - $40K range.
How do you figure? Apple wants to get into the car business so it can start competing with the low-to-mid-range manufacturers? They don't do that now, why would they do that in cars?
I realize the iPhone and the MBP are priced at the top of their respective categories, however, the difference between the top and the bottom of those markets is only a few hundred dollars. People can still afford to buy the best. The auto industry is completely different. The difference between a Scion and a Mercedes can be tens of thousands of dollars. If Apple releases a car, at least one model needs to be affordable to the masses.
Doubtful. People would pay a couple hundred more for a phone. They won't pay thousands or tens of thousands more for a car.
Considering all these brands sell a lot more than one model, it's a fantasy to say Apple will get 10% of the market.