Apple (AAPL) Car: 'Is Tesla Going to be the BlackBerry of Mobility? I Think That's Going to Come Down to Apple' - Morgan Stanley's Jonas

December 1, 2021 12:53 PM EST
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Two of the most prominent analysts at Morgan Stanley, Adam Jonas (autos) and Katy Huberty (tech), have discussed the Apple (NASDAQ: AAPL) Car - how it may look, when it will come out and what it would mean for the market.

The Apple car is in the spotlight again after Bloomberg recently wrote about a fully autonomous electric car being launched as early as 2025.

Jonas and Huberty agree that the Apple Car is likely to be without the steering wheel but disagree on when this may happen. Jonas argues that the car may be launched without the steering wheel given the pace of advancement by Tesla and others in the automated driving space. Huberty believes Apple may take the steering wheel out of the car later.

“If you have a steering wheel and pedals, they are there to be used! It conveys a legal obligation for the occupant to use that and I suspect a liability as well to use it even if the car is capable of some level of automation. So I always felt if Apple was going to enter this market, they're going to take it to a totally different dimension. Absolutely remove that steering wheel and pedals... and never ever convey that obligation for you to drive... to fulfill that desire of turning your car into a 'mobile Apple Store' instead of just what we know today as an automobile,” Jonas said.

Jonas also weighs in on the debate “Is Tesla (NASDAQ: TSLA) going to be the Blackberry of mobility?”

“I think that's going to come down to Apple. One of the things that we think drives Elon Musk and the Tesla's mission isn't 'can we make a better EV than Volkswagen' or something, it's... can we use our manufacturing, our miles accumulation and our neural network training advantage of having now approaching 2 million vehicles on the road versus Apples' near zero vehicles on the road.”

The analyst believes that the fear of Apple is “potentially turning Tesla into a BlackBerry is one of the things that we think is motivating Tesla and their mission.”

Huberty also discussed the financial aspect of the Apple Car story and the opportunity that lies ahead.

“If you take Adam's forecast for the shared mobility space, measured on miles driven is a $10 trillion market. Apple only needs to take 4% market share of that opportunity to double revenues and arguably double valuation. If you look at every other market Apple plays in they have, just rough numbers, 15-20% unit share but also 30-50% revenue share. So it's not that hard to imagine a world where yes, this could double Apple revenue and maybe much more than that,” Huberty explained.

About when we could see the Apple Car on roads, Huberty’s guess is 2027 while Jonas has opted for a year later.

“You got to make room for Apple. I think Apple car may be the ultimate bear case for my sector,” Jonas concluded.



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