Apple surpassed the trillion dollar valuation only a few days ago. Its massive success so far was driven by the iPhone, iPad, and services business. Wall Street analysts have been wondering how Apple will get to the next trillion dollars. The most respected Apple analyst Ming-Chi Kuo of TF International Securities has told clients that the Apple Car launch and augmented reality would push the tech giant towards its next trillion dollar valuation.
Apple Car launch expected between 2023 and 2025
Of course, the rapidly growing services business will continue to fuel Apple’s growth in the coming years. Apple recorded $9.5 billion revenue from its services business in the latest quarter. But it’s the Apple Car launch that will drive Apple to $2 trillion valuation.
Ming-Chi Kuo predicts Apple will launch its own self-driving car between 2023 and 2025. The analyst didn’t reveal much about the vehicle besides the expected release date. The automobile market will experience a tectonic shift in the coming years, and Apple will be fully prepared to take advantage of the opportunity.
Kuo told clients that there will be “potentially huge” replacement demands in the automobile sector due to the introduction of novel technologies including autonomous driving. The iPhone maker has distinct “technology advantages” such as augmented reality that would “redefine cars and differentiate Apple Car from peers’ products.”
A few days ago, the Cupertino company acknowledged that it had rehired Doug Field, without disclosing what project he would work on. According to Daring Fireball, Doug Field will be working on Apple’s autonomous driving initiative Project Titan.
Field worked at Tesla for five years before coming back to Apple. Before Tesla stint, he led the hardware team for the redesigned iMac, MacBook Pro, and MacBook Air.
Apple Car could feature an AR windshield
Apple is exploring ways to use augmented reality (AR) in the Apple Car. Earlier this month, European regulators published a patent application filed by Apple. The patent filing describes an AR windshield that will allow passengers to conduct FaceTime video calls with others, including passengers sitting in a separate vehicle.
The AR windshield will also include sensors to monitor stress in passengers. They will monitor your posture, eye motion, body temperature, gestures, eye blinking, breathing rate, heart rate, and other aspects. If the system detects that you are in stress, it will automatically adjust the AR windshield display to reduce stress and calm you down.
The patent filing also describes external sensors to detect the autonomous vehicle’s speed as well as the posted speed limits. You as a passenger will be able to see all the information on the AR windshield screen.
Besides using AR in the Apple Car, the iPhone maker could launch many other AR products in the near future. Ming-Chi Kuo predicts Apple will launch its own AR glasses in 2020. The tech giant has been consistently trying to improve the AR experiences through ARKit. It’s only a matter of time before the company launches its own AR hardware. AR will also help boost Apple’s revenues in the coming years, believes Kuo.
Apple’s AR glasses are said to feature a built-in processor, a dedicated display, and a new operating system based on iOS. Another Apple analyst Gene Munster has said that Apple would launch its first AR wearables in 2021.
Apple has been working on the so-called Project Titan for years. At one point, it had thousands of engineers dedicated to the project. But after several flip-flops, it laid off hundreds of employees and refocused its efforts on developing the autonomous driving systems first. Tim Cook last year described autonomous driving technology as the “mother of all AI projects.”
Apple could focus on designing its own cars after developing the self-driving technology. It’s not in Apple’s DNA to license its core technologies to other vendors. One of the reasons the Apple Car launch is still several years away is that Apple lacks expertise in building cars. Self-driving cars are outside its core competencies of iPhones, iPads, and Macs.
The tech giant is currently testing its autonomous driving systems on public roads in California using as many as 66 Lexus RX 450h SUVs. It has also teamed up with Volkswagen to build self-driving electric vans to shuttle its employees from one campus to another.
According to Guggenheim Securities analyst Robert Cihra, Apple has a premium brand appeal around the world, which should help the company sell luxury autonomous cars in the future. Just like Kuo, Cihra believes the Apple Car launch will be a significant growth driver considering the total addressable market (TAM) is about $2 trillion. Even if Apple focuses on luxury vehicles, the global luxury car market is worth $460 billion a year.