Since its inception, Apple has primarily focused on consumer technology, be it smartphones, tablets, laptops, or operating systems. Automobiles is a completely different ball game for the Cupertino-based company.
Earlier in June, Tech Times reported that Apple’s CEO Tim Cook revealed that the company was working on a car project for years.
Cook revealed that Apple — rather than building an entire autonomous car — was focusing solely on the technology aspect. The company was trying to figure out the software, which would make the vehicle run autonomously. However, Apple is facing some trouble gathering data, which is the foundation of creating such technology.
In a new note to clients on Wednesday, June 14, Morgan Stanley analyst Adam Jonas elaborated on several points, which may help Apple overcome this challenge.
Apple-Tesla Partnership For Autonomous Cars
Apple’s venture into the automobile industry is relatively late compared to other companies. Thus, its competitors such as Waymo, Uber, and Tesla have already collected a significant amount of data on how people drive.
In case Apple wants to succeed in developing technology that would make a car run autonomously, it would need this automobile data. Jonas’ note to clients points out several methods Apple can resort to, to make up for the lost opportunities and time.
Jonas suggests a merger, acquisition, or partnership — whatever is feasible for Apple — with Elon Musk-owned Tesla. The electric car manufacturing company has been curating automobile data since it started operations in 2003.
Morgan Stanley even questioned Musk regarding a possible collaboration with Apple in May during Tesla’s first quarter earnings call. However, Musk was vague and showed little interest in such a partnership.
“I don’t think they want to have that conversation – there’s not been any indication that they do,” Musk told Morgan Stanley at the time.
He noted that as an Apple consumer himself, he is quite satisfied with the products (his phone and the laptop) he uses. However, he has no idea what the Cupertino-based company will be doing in the automobile sector.
Other Possible Ways For Apple To Gather Data
Other than partnering with a firm established in the automobile sector, Jonas suggested that Apple can start collecting its own data. However, this route would be more costly, especially if Apple decided to take things into its own hands.
Jonas shared that according to his calculations, in the next four years, Apple will have to spend approximately $16 billion toward research and development in the automobile sector. This hefty amount is largely due to Apple’s late entry to space. This amount is four times of what Tesla is likely to spend in the same period.
However, if Apple succeeds in curating the massive amount of data required to develop self-driving algorithms and AI capable of driving a car autonomously, then it would undoubtedly bring the company huge revenue.