As rumors of an Apple car start to gain speed, Piper Jaffray analyst Gene Munster has run the figures to find out what kind of business proposition automobiles could be for a company that tends to steer clear of small or low-margin markets.
His verdict? If Apple cars were even a “moderate success,” Tim Cook and pals could be looking at an extra $50 billion per year in revenues. To put that figure in context, it would be an increase of 23 percent on top of the already impressive cash-generating machine that was Apple in 2015.
Remind us to remortgage our homes to buy AAPL stock!
Munster’s figure is based on an estimate that the U.S. car market is worth $500 billion in sales each year, and an assumption that Apple could conceivably grab 10 percent of that.
Quite correctly, he also notes that even though the Apple Watch isn’t out yet, Wall Street types are going to be looking to the next great Apple innovation to continue moving the needle. “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,” Munster writes. “We believe this hope should be positive for the multiple on shares of AAPL and help support the stock over the next six months.”
For now, the Apple car is still very much a rumor — although there’s more and more to suggest it could be more than that. Apple design guru Jony Ive talked about cars in his New Yorker profile, much as Tim Cook hinted that Cupertino was interested in wearables before the Apple Watch was announced. The Wall Street Journal, meanwhile, claims Cook approved a secret car project more than a year ago, and that Apple is now building a 1,000-person team to take on Tesla Motors.
In the meantime, here are the qualities we’d love to see if Apple does, in fact, create its own car. Will we be proven correct? Watch this space.
Via: Apple Insider
Luke Dormehl is a U.K.-based journalist and author, with a background working in documentary film for Channel 4 and the BBC. He is the author of The Apple Revolution and The Formula: How Algorithms Solve All Our Problems … and Create More, both published by Penguin/Random House. His tech writing has also appeared in Wired, Fast Company, Techmeme and other publications.
9 responses to “Apple car could add a cool $50 billion onto Apple’s revenues”
I think they will build a public transport system with self driving minivans that could provide door to door transport. Something better than Uber :-)
I love to drive. I wouldn’t use a self-driving anything.
I think your “analyst” has more spare time than common sense.
The title of this article is MISSTATED, it should correctly say ” add a cool $50bn onto Apple’s REVENUE ” not of Apple’s “EARNINGS ! ” Apple would need at least another 300 Billion in sales REVENUE to add anything close to 50 Billion in earnings.
Good point. Thanks. Have updated the article.
It’s ridiculous to be throwing around such ridiculous numbers for a product that probably doesn’t even exist. Spreading FUD about advance revenue for AppleWatch is bad enough but some vaguely rumored autonomous vehicle is much worse. Apple is already the highest valued company on the planet by a huge amount and yet Wall Street isn’t close to being satisfied. The pundits’ greed is infinite. Focus on the products and not the resultant sales numbers. That Munster is truly a nut job. I’ll bet he doesn’t even own Apple stock.
An Apple Car should not look like a dorky washing machine on wheels.
The photo should AT LEAST give accurate credit for what it’s content is. That’s the prototype Elio, from Elio Motors. Will sell for about base price of $6800 and get 84/49 MPG highway/city.
Of course this vehicle is all about add-on’s and an average package will probably be around $9k. Still. Sweet ride if they make it to market.
Clearly it’s going to be a mini van drone quad copter (iMVDQC). Man it’s going to be so cool. Apple will make at least 100 billion a year on it. Foxconn is in negotiations to buy a mothballed Russian nuclear aircraft carrier to turn into an assembly plant. Their gong to cover the flight deck with solar cells to power the whole plant. The assembled iMVDQC will just be flown straight to your house from the offshore assembly plant which won’t have to pay any taxes because it’s in international waters.