Apple Inc. (ticker: AAPL) CEO Tim Cook recently confirmed Apple’s top-secret Project Titan driverless automobile project, calling it the “mother of all AI projects.” But while Apple investors now know the company is making a move into the auto industry they have no idea exactly what Apple is working on and how big of an impact it could have on the stock.
Apple has a reputation for being extremely secretive about its projects, and Project Titan will likely be no exception. However, that secrecy hasn’t kept investors and analysts from speculating about how Apple will choose to attack the auto industry.
Loup Ventures analyst Gene Munster says Apple has three possible approaches to take with its driverless vehicle technology.
The first approach would be to partner with existing manufacturers, such as Ford Motor Co. (F) or General Motors Co. (GM), and have them produce Apple cars. This approach would be similar to the way Apple currently has Foxconn produce its iPhones rather than Apple producing them in-house.
The second approach that Apple could take to the auto market would be to produce a large fleet of its own vehicles and become a driverless ride-hailing service. This approach would have Apple competing with the traditional taxi industry, as well as ridesharing companies Uber and Lyft.
Finally, the third way is by developing autonomous vehicle software and then licensing that software to manufacturers. Munster says Apple could create a driverless vehicle operating system, similar to its iOS for iPhones. He says the software licensing strategy is Apple’s most likely play.
“In order for wisespread adoption of fully autonomous vehicles, cars would need to have hardware and software integrated into their design that would not only operate the vehicle, but also communicate with surrounding vehicles at all time,” Muster wrote this week. “In this scenario, Apple would expand its presence in the automotive market significantly and further expand the halo effect of their product lineup in autos.”
At this point, Munster says…
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