Published on 26/05/2016 by Punchmedia

Apple Bites Into Ride Sharing Popularity

Not only is the creator of the iPhone spending more now than it did when it launched its most successful product, it's also investing more money than the top 14 car makers combined, making it an industry deep in transformation.

Morgan Stanley analysts, led by Katy Huberty and Adam Jonas, recently took a look at Apple's spending on incremental research and development and discovered some interesting findings.

While Apple has spent $US5 billion on additional research and development from 2013 to 2015, the big players looking to electrify the fossil fuel world spent only $US192 million eg: Tesla Motors, though not one of the 14 has spent around $US444 million over that same time frame.

Huberty believes shared mobility has been the main driver of Apple's increased spending.

According to Huberty, Apple's recent investment in Chinese ride hailing start up Didi Chuxing (of approx $US 1 Billion) signals an interest in shared rather than owned vehicles creating a recurring revenue stream at maturity.

"With Apple outspending the major auto [makers] on this opportunity, we believe Apple could gain at least 16 per cent of the shared mobility market - similar to the company's share in smartphones today,'' Huberty wrote.

However, Morgan Stanley can't confirm that this exact amount has been dedicated to the car industry.

Given the massive size of the shared mobility market, which is $US2.6 trillion by their estimates, the revenue potential for Apple is huge.

Morgan Stanley expect $US400 billion of revenue and $US16 of earnings per share for Apple in 2030, which is more than other parts that Apple generate today.

The iPhone, which makes up more than 60 per cent of Apple's current revenues, generates just over $US150 billion in revenue per year.

* With The Age/Bloomberg

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Curtis is a leading expert in the business-for-sale industry, serving as a senior content creator at anybusiness.com.au.

With a career spanning over fifteen years, Curtis has accumulated extensive knowledge in the domain of business sales, acquisitions, and valuations. His deep understanding of market dynamics and his ability to translate complex industry jargon into accessible insights make him a trusted resource for entrepreneurs and business owners looking to buy or sell businesses.

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