Apple will have a hand in every detail of the 'Apple Car,' analysts say

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Apple's car strategy will likely focus on vertical integration, with the company having a hand in virtually every aspect of the "Apple Car," Morgan Stanley analysts said.

In a note to investors seen by AppleInsider, Morgan Stanley analysts Adam Jonas and Katy Huberty discussed rumors of Apple's automotive ambitions, how the company could implement its strategy into such a vehicle, and the legacy of Apple CEO Tim Cook.

On the potential for Apple to release some type of vehicle product or production car, Huberty notes that Apple has been focused on autonomous vehicle technology for years. Unlike other companies, Apple takes its time on new products so that it gets it right, the analyst added.

"The strategy is about doing fewer things, but doing them really well, and increasing the chances of success. And so, as you said, it was years ago that we first started picking up data points that Apple would enter the auto market, and we felt it was real," Huberty said.

She also likened the current automotive market to other markets that Apple has done well in — including PCs.

"When you think about what will differentiate the car of the future, it's certainly being creative around new supply chains. It's about vertical integration of different components, hardware design, software, and ultimately, the services that can be delivered in that automobile," Huberty said. "It's about consumer trust and credibility, and certainly brand when it comes to a consumer product. And all of those categories are ones where Apple is a leader."

Vertical integration will likely be a vital component of the "Apple Car." Huberty says that Apple's strategy will likely see the company having a hand in details such as the vehicle's design, software and hardware communications, and even the car's internal components and technologies.

Going forward, it's likely that Apple will focus on bringing services to the "Apple Car" and creating a new user base. However, Huberty cautions against putting "the cart before the horse."

Yes, there will be an important element around what services will become available in an automobile once the driver's focus and attention is freed up, but first they have to get the car right. You and I have debated this before. I wouldn't be surprised if Apple comes to market with an EV, right? A car that looks similar to automobiles that are on the market today with a steering wheel. They did this with the iPhone where in the first iPhone, there was no app store. It was first about getting the hardware right.

At another point during the conversation, Jonas asked Huberty about how Steve Jobs would view Apple today. In response, Huberty said that she believes Tim Cook has "done a pretty phenomenal job allowing for Steve's legacy to carry on."

The analyst says that Cook has led Apple with design and innovation in mind — two things that Jobs was famous for. However, Cook has also "layered in" other aspects like executive, scaling, and skills related to his time as Apple's supply chain chief.

"So, I think if Steve was looking down, he would be very proud of the way that Tim has built his own legacy while protecting the culture and the differentiation around design and innovation that Steve started," Huberty said.