In the latest episode of the Apollo Effect podcast series, Morgan Stanley analyst Katy Huberty discussed the potential of a so-called “Apple Car” to disrupt the automotive industry through vertical hardware integration, software and services. Huberty also praised Apple CEO Tim Cook, noting that the late Steve Jobs would have been proud.
/article-new/2021/08/tim-cook-apple-car.jpeg?resize=560%2C315&ssl=1)
Vertical integration of Apple Car
While some reports over the years have indicated that Apple’s automotive ambitions could be limited to programs and services, Huberty said Apple is more successful when there is vertical integration, as evidenced by the iPhone. Huberty said Apple would like to help in vehicle design, in the way the software communicates with the hardware, and in choosing the right components and technologies to use.
“When you think about what will differentiate the car from the future, it’s certainly creative around new supply chains,” Huberty said. “It’s a vertical integration of different components, hardware design, software and, ultimately, the services that can be offered in this car. It’s about consumer confidence and credibility and, of course, branding when it comes to “It’s a consumer product. And all of those categories Apple is a leader in.”
Huberty said that once Apple manages to “hit the car,” the company will be able to introduce services at the top. While he didn’t provide any examples, one could imagine an “Apple Car” ranging from full Apple Music integration like the Porsche Taycan to built-in screens so that rear passengers could watch Apple TV + shows or to Play Apple Arcade Games |
In a December 2020 research note, Apple analyst Ming-Chi Kuo said an “Apple Car” is unlikely to hit the market until at least 2025–2027.
The legacy of Tim Cook
Last week marked the 10th anniversary of the appointment of Cook as Apple’s CEO after Steve Jobs left office due to deteriorating health. Huberty reflected on Cook’s era in the podcast interview, noting that Jobs would be proud.
“I really think Tim Cook has done a pretty phenomenal job of allowing Steve’s legacy to continue, protecting that legacy while building his own very separate legacy,” Huberty said. “Steve was very involved with design and innovation and with herbs in these two areas. Tim has allowed the company culture to continue on that front, but at the same time he has included some softer aspects that are more difficult. to measure, ”he added, noting that Cook has successfully scaled operations while placing a greater focus on areas such as employee benefits, charitable giving and environmental responsibility.
“I think if Steve looked down, I would be very proud of the way Tim has built his own legacy by protecting the culture and differentiation around design and innovation that Steve started,” he concluded.