Apple Car could double the company’s revenue and market value, says Morgan Stanley

A hypothetical Apple Inc.-designed car may be years away, but it may already be helping the company’s stock, according to one analyst.

“We see the prospect of Apple Car – representing the clearest path to doubling Apple’s revenue and market value – catalyzing a shift in investor narrative back to the platform’s attractiveness (1 billion loyal customers) and long-term sustainable growth,” wrote Morgan Stanley’s Katy Huberty in a Friday note to customers.

In short, “investors should pay attention to Apple Car,” Huberty wrote.

Her comments come after a Bloomberg News article on Thursday highlighted a number of developments surrounding the consumer electronics company’s plans for an electric vehicle. Apple has reportedly accelerated its launch goals as it now aims to introduce a car in four years. It also strives to deliver a model that boasts full self-driving features, according to Bloomberg.

Apple did not respond to MarketWatch’s request for comment Thursday on its electric car plans.

See more: Apple has reportedly launched plans for electric cars – ‘a question of when, not if’

Apple’s share AAPL,
+1.71%
rose 1.5% to record territory in afternoon trading Friday. The stock has risen 8.4% in the middle of a six-day winning streak.

Apple could drive dynamics in the world of autonomous vehicles (AVs) similar to what it did in other markets, in Huberty’s view. The company was not the first to launch a smartphone, but its focus on building an attractive software ecosystem helped the company skate past established players.

“Evidence shows that as Apple enters new markets, it serves as a catalyst to expand the addressable market beyond what was previously envisioned,” Huberty wrote, meaning she believes “Apple is likely to accelerate. the adoption of AVs. ”

Huberty admits that Apple “will have to add new partners, acquire new components and invest in new technologies internally” if they want to enter the automotive development industry, but she sounded optimistic about the company’s ability to manage this shift while utilizing its existing capabilities.

“[M]of the brain and power of a self-driving car – including processors, sensors, [and] batteries – are already designed by Apple today, “she wrote, making the company” well-positioned to solve complex technology, safety, performance and manufacturing challenges for a self-driving car and to scale production faster than others that fix towards the same market. ”

Read: How Apple’s buyback party could continue for 15 more years

An Apple Car could also bring a twist on the traditional idea of ​​car ownership and mobility, according to Huberty, who believes the company could sell the car “as a service.”

Her colleague Adam Jonas, who covers Tesla Inc. TSLA,
+2.91%,
seemed to expand further in a note discussing the potential automotive industry implications of a possible Apple entry into the automotive market.

“To be clear, we do not believe that consumers will own the ownership of a fully autonomous car … but will engage in the service as a subscription or a means of transportation,” Jonas wrote.

Bloomberg reported that Apple envisions putting a car out without a pedal or steering wheel. Such a vehicle “should be a ‘shared service’ and not a ‘owned car'” in Jonas’ view.

Apple’s stock has risen 20.8% year to date, while the Dow Jones Industrial Average DJIA,
-0.74%
has risen 16.5 per cent.

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