Gene Munster is one of the world’s most recognized and respected Apple financial analysts with a long track record of successful focus on Apple and its products.
Apple Car Fans had the exclusive chance to sit down with Gene and get his latest insights on the Apple car.
Munster pointed out a previous white paper he and his company Piper Jaffray released about the Apple car last October. The analysis was positive, but since then we learned of possible members leaving the Apple Titan team.
Fortunately Munster does not think this is significant, though he noted the report is a little “dated”. “Substance is unchanged,” he said. Of the Apple Car he said “we’re still in the camp that this is real.”
“Our take is there is still a sizable team,” he says about the Apple Titan car team.
Munster believes Apple wants to build a car because “Apple’s biggest concern is growth”, and the automotive market offers a potentially generous amount of it.
He does suspect it will take Apple a considerable time to bring the car to market, and may reach that point with a break from its usual marketing approach.
“There will be a car that you can see and order in 2019-2020”, said Munster. “We don’t think it will probably be delivered until after that…maybe 2021.” He added “an advantage of showing it early” will be “to hold up the market in anticipation.”
Munster feels confident Apple will not build the car itself, instead relying on the approach it uses for other products such as the iPhone. “High probability of about 80% they outsource it,” he said.
“They can still design the car themselves, the phone they don’t build, they fund their supply chain,” Munster said. He does not believe this approach will affect the typically superb quality of Apple products. “From our perspective it would be a similar model that in they are involved in the quality of the product.”
Fortunately for us here at Apple Car Fans, Munster believes it will be hard for Apple to hide something so big and complex as automotive production.
“I think there is going to be a long steady flow of information,” he said. “Hard to keep that under wraps.”
“First thing we’ll see is hiring,” he predicted. “Second phase (will be) tooling and early (part) orders. Third thing will be the plan.”
Despite the publicized reports of division chief Steve Zadesky leaving the company since his last report, Munster still holds to a greater than 50% chance Apple will build a car, a position he considers very optimistic.
“We still hold to a greater than fifty percent likelihood the project is alive and funded and a greater than 50 percent chance it is unchanged,” said Munster. “The reason why our number isn’t higher is that we were wrong on the (Apple) television and I learned some lessons about things we hear internally and how that resulted in a lack of a project.”
“The idea they’re working on a car doesn’t mean it’s necessarily going to make it to market,“ he added. “Fifty to sixty percent is still pretty optimistic.” Further he noted this is “a big step forwards and sideways (for the company).”
Munster is also confident Apple will release a single product with an iconic name. “For the most part they’ve been pretty religious at keeping their product lines narrow,” he said. “In the car line they’d have several years of a single car.”
“Apple thinks about how they are going to be in business the next 200 years,” he added. “We think they will call it the Apple car.”
In terms of the most likely go to market price, Munster also has a strong opinion.
“If you look at the overall automotive industry Apple historically plays toward the high-end.” The price when Apple starts selling it in 2020 or 2021 will be “around $75,000.”