While investors are unsure about new growth of Apple’s future projects, some current products and services are beginning to show a resurgence. Analysts say that none have the “potential to move the needle for Apple the way the Apple Car does”.
Since Tim Cook took the reins, Apple has grown revenue by almost quadruple and profits have more than doubled to $53 billion. Market cap has increased a shocking 60%, to $570 billion. Regardless of all of this, many investors are concerned about the company’s future, due to two quarters of revenue drops.
The iPhone has shown marked drops in sales and comprises 60% of Apple’s current revenue. However, the iPad has started seeing growth again after 10 declining quarters, and the company’s “services” segment is growing by double digits.
It has been repeatedly reported that Apple needs an innovation or a shift, pivoting the company to new bounds. The company tends to have many secrets and may certainly be in the process of making this happen. All other potential projects aside, the Apple Car may be the answer. While some investors see it as another of Apple’s possible secret projects, it is surely the company’s best kept “open” secret. Apple’s refusal to talk about it, along with continued attempts to silence it, causes mounting skepticism.
The fact is, Apple has too many ducks in a row to not be building a car. The company has already jumped head first into the transportation industry and the energy industry. Analysts use BMW as an example of what an Apple Car may be able to achieve. Looking at 2015 BMW sales, estimates show that Apple could net $142.5 billion on an Apple Car in a successful product year. This surpasses yearly iPhone sales.
The larger opportunity that is coming to the forefront for Apple is the growing segment of “ride-sharing”. Morgan Stanley estimates it to become a $2.6 trillion industry by 2030. Even if Apple only achieved a 10% market share in the segment, the company would be looking at $260 billion in revenues. Apple currently has a 16% market share in smartphones globally. This amounts to $400 billion in estimates for the shared mobility market.
With numbers like this, Apple would be absurd to not move forward on Project Titan, no matter how long it takes and regardless of cost and resources. The future returns should far exceed the initial losses.