Apple Inc. is making a car even though the firm has not as much as said a word to confirm the news. It is obvious that the firm wants to build the brains of a self-driving car first before it starts working on the design. However, Jim Cramer thinks that Apple CarPlay, the firm’s in-car iOS platform does not have what it takes to disrupt the automobile market the same way Apple disrupted the smartphone market with the iPhone.
In an indirect response to Jim Cramer, the Wall Street Journal reports that Apple has what it takes to build a car, but the car will be disruptive in more ways than you can imagine. The Wall Street Journal notes that “the mounting evidence seems undeniable that Apple is forging ahead to build a car. A number of events have given an insight into Apple’s strategy for entering the auto space.
An Apple Car is a long-term vision
The WSJ notes that you shouldn’t expect to see an Apple car launch in the next couple of quarters because the firm is “playing a long game, one that could easily span decades.” Apple’s long-term focus for getting its car on the road is in line with the views about when self-driving cars will go mainstream.
Some analysts are projecting that humans won’t need to be behind the wheels in five years – at least, that’s what the head of self-driving technology at Google thinks. Others think that somewhere beyond 2040 is a more probable timeframe.
Analysts bullish on Apple’s car plan
Analysts are bullish about the prospects of Apple without much though for its strategy for entering the automobile space and its timing for entering that market. Leading the recent bullish charge for Apple are analysts at Robert W. Baird. On Saturday, analysts at the firm initiated new coverage on Apple as they set a “Buy” rating on the stock.
Last Thursday, Gene Munster, an analyst at Piper Jaffray noted that Apple’s September 9 event will provide an insight into the firm’s plan going forward. He expects Apple to give hints about its plans and he notes that such hints will drive the share price up. Munster gives Apple an “Overweight” rating and he has a $172 price target on his stock. The new price target computes at least 50% upside potential for the stock.
Maynard Um of Wells Fargo is another high-profile analyst with bullish views on Apple. In a research note that he released to clients, he gave Apple an “Outperform” rating. He also notes that the recent decline in the share price is an overreaction. He is also confident in the firm’s ability to take on its car project because of a huge cash balance.