>>> Auto Sector : New player : I have been talking of that to some of you on the last few weeks, I think this report is quiete interesting and will give a bit more material to the call I was making, happy to discuss anytime.
I would rather play the auto component (FR, CON,...) names or the potential target (FCA & UG)
Laurent
(Bernstein) AAPL: 5 Reasons Why We Believe Apple May Indeed Be Looking to Build a Car
In recent months, press reports have suggested that Apple is looking to potentially produce an automobile. On March 26th, we (Toni Sacconaghi, US IT Hardware and Max Warburton, Global Autos) jointly held a conference call to discuss the issue and associated implications for the automotive industry.1 Today's note provides the five reasons why we believe that Apple may indeed be looking to build a car going forward.
Reason 1: The auto sector offers a uniquely large, addressable market for Apple, with over $1 Trillion in annual sales. Given that the vast majority of Apple's growth in recent years has been driven by the iPhone, and that the high-end of the smartphone market is projected to have a tepid growth outlook, the auto market provides a huge, incremental market opportunity that could move the needle for Apple going forward.
Reason 2: Apple is a product company and has historically been undaunted by entering established markets. Apple's focus has been on making premium, differentiated products and has taken on established competitors, many with deep R&D pockets.
Reason 3: Tesla has upended the auto industry on a relatively shoestring budget. Apple has nearly limitless financial resources
Reason 4: Although auto industry margins are middling, Apple's premium-priced products have historically enabled it to command a disproportionate share of industry profits.
Reason 5: Significant car manufacturing capacity is likely to develop in China over the next few years, which we believe Apple may be able to leverage to subcontract manufacturing/assembly of a car.
--> So are we convinced Apple is making a car? No, in part because Apple is typically very patient in bringing a product to market, and will ultimately only do so if it believes it has an offering that is truly distinctive. A lot needs to be occur for anyone (including Apple) to know whether that will indeed transpire, particularly since Apple's historical "feature absolutism" points to an Apple car that would very likely be all-electric and likely autonomous, both of which require significant technology and regulatory hurdles to be scaled.