Source: Apple
What you need to know
- Morgan Stanley believes the Apple Car could shatter the norms in auto earnings.
- Analyst Katy Huberty points to Apple's ability to vertically integrate its business.
As reported by AppleInsider, Morgan Stanley believes that Apple may be able to disrupt the automotive industries normally razor-thin margins with its own self-driving electric car. Analyst Katy Huberty pointed out that commanding just 2% of the auto market would match the size of the iPhone business.
Speaking about Apple's vehicle opportunities, Huberty said that it makes sense for Apple to enter the car market because of the total size of the industry. Smartphones, Huberty points out, are a $500 billion total addressable market (TAM). Apple has about one-third of this market. But the mobility market is "$10 trillion."
Huberty believes that Apple will approach its electric car the same way that it does the rest of its business, with vertical integration from the components to the financing.
"Apple really only succeeds when it's vertically integrated. This means designing the components and designing every part of the product how it looks and feels to the consumer, the software and the ecosystem that surrounds those products ... Financing and leasing and trade-in programs are incredibly important to a successful auto strategy," she writes."
The analyst pointed to other markets where margins were tight before Apple broke the mold as an indication it could do the same with the auto market.
"With respect to margins, investors frequently say that the current auto industry margins are highly unattractive compared with Apple's current mid-20% EBIT margins today. But I would remind everybody that when Apple entered the PC, handset and wearables market, the margins of competitors were razor thin."
A report from earlier tonight confirmed that Hyundai is one of the automakers that Apple is in talks with to potentially build its self-driving vehicle.
iOS gaming recap: PlayStation makes big moves into iOS, Streets of Rage 4
Besides some new games, a huge game maker discussed its plans to move into the mobile space, although it's unclear when. Here's what else you missed this week.
GRAMMY-winning music producer lauds his Mac Studio but still wants Mac Pro
GRAMMY-winning music producer Mike Dean, who has worked with the likes of Kanye, Selena Gomez, and Madonna has taken to Instagram to wax lyrical about his M1 Ultra Mac Studio while still lamenting the fact that he can't buy an Apple silicon Mac Pro.
Review: You really ought to check out Catalyst Black for iOS
Catalyst Black is an online multiplayer game that has teams compete against each other to score points and take down opponents. It has both sci-fi and fantasy elements since players can turn into large beasts to do additional damage.
All the games coming to Nintendo Switch in June 2022!
If you're in the market for new Nintendo Switch games, here are the ones being released in June. Highlights include Mario Strikers: Battle League, Fire Emblem Warriors: Three Hopes, and Rabbids: Party of Legends.
