Last week, we passed along a report from Reuters that called for Apple’s self-driving car to start mass production in 2024. “Next-level” batteries using a technology called “monocells” would be employed to power the vehicle; by leaving more room inside the battery to hold active materials, the Apple Car will be able to travel greater distances between charges. While that sounds good, TF International analyst Ming-Chi Kuo, who has a great batting average with his Apple forecasts, told clients in a note disseminated today not to expect the Apple Car to be launched until 2025 at the earliest.
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Kuo’s research missive was obtained by MacRumors and in it, the analyst says, “We predicted in a previous report that Apple will launch Apple Car in 2023–2025 […] However, our latest survey indicates that the current development schedule of Apple Car is not clear, and if development starts this year and everything goes well, it will be launched in 2025–2027 at the earliest. Due to changes in the EV/self-driving market and Apple’s high-quality standards, we would not be surprised if Apple Car’s launch schedule is postponed to 2028 or later.”
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Kuo dampened the enthusiasm that many have shown for the so-called “Apple Car.” He said that it isn’t clear how successful Apple will be in the EV/self-driving car market because the tech giant lags behind others when it comes to AI and deep learning. He points out that the stock market is too bullish and that Apple has showed in the past that despite its technological advantages, it just is not successful in some businesses such as smart speakers. The analyst notes “The market has high expectations for Apple Car. Still, we remind investors that although Apple has a variety of competitive advantages, it is not always successful in new business. For example, Apple failed to enter the smart speaker market. The demand for HomePod and HomePod mini were lower than expected, and the development of new smart speaker models had been temporarily suspended. The competition in the EV/self-driving car market is fiercer than that for smart speakers, so we think it’s perilous to jump to the conclusion that Apple Car will succeed…If Apple Car wants to succeed in the future, the key success factor is big data/AI, not hardware. One of our biggest concerns about Apple Car is that when Apple Car is launched, the current self-driving car brands will have accumulated at least five years of big data and be conducive to deep learning/AI. How does Apple, a latecomer, overcome this lagging gap?”
Even the next level battery is in doubt. Tesla’s Elon Musk, responding to rumors about the Apple Car on Twitter, called the Monocell battery “electrochemically impossible.” Musk also discussed a time when things weren’t going so well “during the darkest days” of Model 3 production. He tried to arrange a meeting with Apple CEO Tim Cook hoping that the executive could see the wisdom of purchasing Tesla at a price that would be significantly lower than the current value of the company (which is $627 billion). The meeting never took place and now Apple is trying to become a competitor to Tesla in the automobile industry.
Kuo said that the stock market is overly-optimistic about how soon Apple will start production of the vehicle. As a result, the analyst is warning his clients to stay away from buying shares of Apple Car suppliers at this time. Kuo’s note does say that Apple has yet to finalize the specs. As a result, the analyst does say in his note that production of the car might not start until 2028. He does say that he believes Apple does have a chance to make a go of the Apple Car.
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