The release of Apple’s car will reduce the company’s profitability. Sale of additional services and services can help

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Last updated on December 8th, 2022 at 02:41 pm

The release of Apple’s car will reduce the company’s profitability. Sale of additional services and services can help

This week was marked by a new wave of rumours about Apple’s intention to release its own electric car by 2024. Shares of Apple itself were supported by these rumours, but the securities of a potential competitor in the person of Tesla began to fall in price. Some analysts believe that car manufacturing provides margins too low to interest Apple.

Apple  car
Apple car

The presence of an impressive cash reserve and huge budgets allocated for research allow industry experts, as noted by CNBC, to talk about Apple’s sufficient potential to enter a new market segment for itself. The development and production of vehicles require a large investment, but from an operational point of view, they provide a very modest profit margin, which Apple is not accustomed to due to its traditions.

At least, representatives of Citi and Evercore are sceptical about the idea of ​​releasing Apple’s electric car. The latter point out that the only reasonable condition for Apple to enter the automotive market could be a breakthrough either in traction battery technology or in automatic vehicle control technology.

Analysts at Morgan Stanley joined the optimists. They believe that Apple is seeking to enter the automotive market not so much for the sake of selling the cars themselves, as for the subsequent monetization of services offered to passengers who tend to spend “on wheels” for a long time. People together, as the authors of the analytical note predict, spend up to 600 million hours a year inside cars. Baird experts are inclined to think that Apple would prefer to cooperate with large suppliers of auto components, rather than produce cars in-house. She can also make money from licensing the software she has created for cars, as is now the case with operating systems. Again, trusting your software to third-party hardware vendors is not in the spirit of the company, since the model of vertical business integration is closer to it.

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