Neil Hughes
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.
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."
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.
AppleInsider Staff
Malcolm Owen
Oliver Haslam
Andrew O'Hara
Wesley Hilliard
William Gallagher
Christine McKee
105 Comments
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...
"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 . . .
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 ;-)
"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!
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.