Have you come across the term “share mobility” yet? If you haven’t already, you are about to. It refers to the new concept of electric, autonomous and shared vehicles – and it will be huge” So huge in fact that some analysts put the value of the market at $US2.6 trillion, by 2030.
The concept of electric, autonomous and shared vehicles is likely to have a major impact on the global transport industry – cars and the massive fuel industry – and in the way we run our lives. There may be no more individual ownership of vehicles, humans might even be banned from driving. And it is also presenting either massive headaches, or massive opportunities for the big corporates, and there are signs that they are investing heavily.
This graph from a Morgan Stanley report on software giant Apple is a case in point. It shows that Apple has spent more on R&D into car and related services in the past few years than it did on the Apple Watch, iPad and iPhone combined. And it still doesn’t have any products to show for its efforts.
Even more astonishingly, Apple is outspending the major car manufacturers at a rate of 20:1. The near $US5 billion it has spent in the last three years compares to the average spend of $US192 million at the top 14 auto makers. It even outranks Tesla by a factor of more than 10:1.
So what market is it addressing?
According to Morgan Stanley, it is a $2.6 trillion market that will emerge by 2030. It bases that calculation on 26 per cent of the 20 trillion miles driven in 2030 are through “shared vehicles” and that this will be worth around US50c/mile.
To give that market size some context, this compares to the roughly $800 billion market Apple addresses with its iPhone, iPad and associated products today.
Morgan Stanley notes that “shared mobility” is the intersection of three disruptive forces – electric, autonomous, and shared vehicles, the need for improved “digital experience in vehicles, and faster technology cycles, which now average 1-2 years, at most, compared to auto design cycles of 5-7 years.
“With Apple outspending the major auto (manufacturers) 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,” Morgan Stanley writes.
“This translates to over $400 billion of revenue and $16 earnings per share for Apple in 2030 – more than the rest of Apple generates today ($234 billion/$9.22 EPS in FY15). Which may explain why Apple is betting the house on new car technology.
