Morgan Stanley has published a new note to investors in which the analyst Katy Huberty discusses his thoughts on Apple, Tesla and the future of both companies in the automotive sector.
Huberty explains, first, that there are parallels that can be drawn between Apple’s Steve Jobs and Tesla Elon Musk.
There are parallels to draw between AAPL under Steve Jobs, and Tesla under Elon Musk. The question for Tesla is whether it also needs an operational leader, as Tim Cook has been for Apple, with the aim of becoming a company by a thousand billion dollars. In addition to maintaining the culture of innovation, design and customer experience in the style of Steve Jobs and his Apple, the current leadership has gone through an intense period of downsizing revenue, social issues such as privacy of data, more attention to the returns of the shareholders and intensified geopolitical risks that contributed to the growth of the evaluations.
Huberty also notes that analysts consider to be Tesla-like as they have seen Apple 20 years ago, which means that Tesla is an innovator in a category that needs innovation.
And the strategy of the Apple for cars and transport? Huberty explains that while the company has not announced or disclosed any detail, Apple sees the automotive industry as a great opportunity. Huberty and other analysts at Morgan Stanley estimate that Apple will spend $ 19 billion on research and development this year.
The ultimate goal for Apple, writes Huberty, it can’t just be a “more advanced version of CarPlay“. Instead, the company must control everything on the platform that creates:
The company has not revealed many details, but we believe that Apple will see the car, along with other markets such as health and payments, as a large market in which can help provide a better solution. We expect Apple to spend almost $ 19 billion in research and development this year, an increase of more than 10 billion compared to just five years ago.
If this figure compares with the 80-100 billion dollars of annual expenditure total in research and development for the entire automotive industry, the impact of Apple could be disruptive. Historically, Apple has been more successful when it incorporates the entire vertically, and we see no reason why their approach to the automotive sector should be different. In other words, they have more control than they have today. The final game can not only be a more advanced version of CarPlay in collaboration with other manufacturers of cars. Must check the design, the viscera, and the experiences and services on the platform.
In short, in the long term Tesla and Apple may be competitors.