The Apple iCar

By Wayne Mulligan, on Thursday, April 16, 2015

A few years ago, Apple changed its name from “Apple Computer” to “Apple, Inc.”

At the time, many assumed this was a sign that Apple would start producing a wider array of consumer electronics.

And they were right: gradually, Apple moved from computers into music players and phones – and now, it’s making watches.

But recently, rumors have been swirling that Apple is moving even further from its computer roots...

Some say that it’s aiming to enter the Automobile market.

Many industry insiders are calling this stealth project “The Apple iCar” — and they predict Apple will build a luxury car brand that rivals Tesla or Porsche.

But we’ve got a different perspective:

We agree that Apple is making a play in the automotive market –

But we think it will attack it in a way that’s unique – and far more profitable.

The “iCar” Isn’t What Investors Think

The hubbub on this topic began in February 2015.

That’s when The Wall Street Journal revealed a stealth project called “Project Titan” taking place at Apple’s headquarters.

The Journal discovered that Project Titan employed more than 100 people – many of them former senior engineers at Tesla.

Since then, a number of other clues have pointed to Apple entering the car market: for example, it’s recruited employees from other car manufacturers, and it’s applied for patents that would enable the iPhone to unlock and start a car remotely.

But we don’t believe Apple has any intention to manufacture a car.

Automobiles are incredibly costly to produce, and their margins are low – Toyota, for example, has gross margins of just 20%.

Apple, meanwhile, enjoys margins as high as 45% – and the stock market applauds that fact by granting Apple a market cap that’s larger than the four biggest car manufacturers COMBINED.

That being said, we do believe Apple has its sights set on the car market:

It’s just that it’s aiming for a part of it that could be much more valuable...

The “Dashboard Wars”

You see, there’s a war brewing today in the automotive market.

The battlefield?

Your car’s dashboard.

In a surprising development, consumers are deciding which car to buy based on whether it connects to their mobile phone.

According to J.D. Power’s 2014 “Initial Quality Study,” the most dissatisfying aspect of a user’s new car wasn’t poor acceleration or lousy gas mileage...

It was “bad voice recognition” from the car’s software.

Which explains why Apple is investing so heavily in its new software system, “CarPlay.”

CarPlay will automatically connect your phone with your car...

And then it’ll enable you to fire up your favorite music, have driving directions automatically displayed based on your next calendar appointment, and make hands-free calls – all from your car’s center console.

Billions in Market Value Up for Grabs

With about 16 million new cars sold in the U.S. each year, the stakes are high...

They’re high for the car makers, who need to satisfy new buyers...

And they’re high for Apple and its major competitor, Google, who recently created a dashboard offering of its own called “Android Auto.”

Whichever company can build the winning dashboard product could potentially sell another 16 million units a year –

That could be worth billions of dollars in market value.

What This Means for Early-Stage Investors

Who’ll be the ultimate victor? Google or Apple?

That’s a tough one to predict – and you probably can’t go wrong buying stock in either of them.

But that’s not where we’re placing our bets...

We believe the biggest gains will come from investing in a new set of start-ups – the start-ups set to benefit from the blossoming “digital dashboard” industry regardless of who wins the war.

Here’s what we mean:

When the iPhone launched, several new industries sprang up to take advantage of it — from application makers to game developers.

These industries spawned companies like, Zynga and WhatsApp – companies that were once tiny start-ups.

But by building a business on the back of the iPhone (and then Google’s Android platform), they became mature enterprises worth billions of dollars.

To put this in perspective, if you had invested in Apple when it first launched the iPhone you would have done very well – you would have made about 1,000% over ten years...

But if you had backed mobile gaming developer, Zynga, instead, you would have made more than 293x your money — that’s 29,300%.

And that is why we’re focusing the majority of our efforts on finding early-stage companies that stand to profit from the “Dashboard Wars.”

If you’re interested in hearing about these opportunities as they arise, keep an eye on your emails from Crowdability.

Happy investing.

Best Regards,
Wayne Mulligan
Wayne Mulligan


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