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Apple’s Next Big Thing: Analyst Report On CES 2023

One of Apple’s best-known expert has shared his takeaways from CES 2023. Here’s how the Cupertino company could benefit from the big innovation themes playing out in the tech space.
  • Wedbush’s Dan Ives and his team have recently reported on their key takeaways from the 2023 Las Vegas CES conference.
  • The big themes of the moment are mostly autonomous and/or electric vehicles and artificial intelligence, with the two at times overlapping.
  • Within these spaces, Apple can find opportunities to develop the company’s “next big thing”, which could serve as a boost to Apple stock  (AAPL) - Get Free Report in the long term.
Figure 1: Apple’s Next Big Thing: Analyst Report On CES 2023

Figure 1: Apple’s Next Big Thing: Analyst Report On CES 2023

(Read more from the Apple Maven: Apple: How These 3 Financial Trends Tell A Compelling Story)

It’s All About EV And AI

Analyst Dan Ives of Wedbush has recently published a report on his key takeaways from CES – the most recent edition of the famed Las Vegas-based tech conference. In a nutshell, the participants were largely focused on the following main areas of innovation:

  1. Autonomous or electric vehicles: Wedbush singled out companies like Mercedes as some of the big players making a splash in autonomous and electric cars. They have been working on initiatives that range from driver-assist safety features to robo-taxis and more. The German maker, in fact, is cited as planning to develop a Tesla-like network of chargers that can give Mercedes an advantage in the EV market.
  2. Artificial intelligence: The other big theme at CES was AI. Here, the focus is not on the technology itself, but on the applications. Dan Ives mentions “digital cockpits in EVs, text-to-speech technology”, and one particular case that impacts Apple directly: the development of third-party chips that can better compete with the M2 that currently equips some of the Cupertino company’s devices.

Autonomous Vehicles: How Apple Can Benefit

Apple has been heavily reliant on the iPhone, more than any other product or service, to drive the company’s financial results over the past decade and a half. Autonomous vehicles and AI can help to change this dynamic a bit.

For many years now, the Cupertino company has been rumored to be working on its EV and driverless car solutions. Some originally thought that an Apple Car, developed and made by Apple, would be the outcome of this huge project.

Today, it seems more of a consensus that Apple will likely partner with an automaker. The tech company could, for example, provide the intelligence behind the driverless technology, while the car manufacturer would handle most of the hardware and assembly.

Regardless of how exactly this initiative plays out, Apple’s financial statements can look very different in the future. The EV market is expected to develop into a $1 trillion-plus industry by 2030, at an astonishing CAGR (annual growth) of over 20%.

Clearly, investors care about Apple’s foray into the EV space. In 2020, Apple stock skyrocketed at the speculation that an Apple Car could be launched in 2024. Then, in 2021, AAPL reached all-time highs around another piece of news regarding autonomous driving.

See the two moments above depicted on a graph, and notice how AAPL rallied to peaks in both cases.

Figure 2: Apple stock skyrocketed at the speculation that an Apple Car could be launched in 2024.

Figure 2: Apple stock skyrocketed at the speculation that an Apple Car could be launched in 2024.

Artificial Intelligence: Improving The Product Portfolio

When it comes to artificial intelligence, Apple probably wouldn’t benefit directly through the launch of AI-specific products or services. However, the technology could help to make the company’s product and service portfolio better.

Autonomous vehicle is one of the most obvious applications of AI. If Apple is heavily involved in providing the driverless technology to automakers, weaving in artificial intelligence to help improve the autonomous systems would be crucial.

Regarding existing offerings, Apple has already been putting AI and machine learning to use. The iPhone’s facial recognition feature and Siri are two examples. The applications are only likely to expand substantially, making Apple’s products even more appealing to consumers.

(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting the Apple Maven)