Morgan Stanley: Robotics is Apple’s next $130b revenue opportunity

Apple has what could be a $130b revenue opportunity opening up in robotics, argues Morgan Stanley analyst Erik Woodring in his latest note to clients. He thinks the first Apple robots could march out as soon as 2027.

Apple’s secret opportunity knocks

“Apple is uniquely positioned to help lead the next wave of intelligent machines, which we believe few fully appreciate today,” he says, in a client note that also extends to arguing Apple may make human embodied robots.

The logic seems solid. Apple has its existing ecosystem, manufacturing expertise and everything else, coupled with all the research and technologies it already invested in on its currently dormant ‘Project Titan’ quest to build a self-driving car.

That project may have been put aside for a while, but the research, technologies, and industrial processes it developed still exist and are already being used by the company’s dedicated Apple Robotics unit. And do you really think the billion dollars Apple invested through Softbank nearly a decade ago went to waste?

I don’t, either.

Apple in the enterprise

This doesn’t need to be confined to consumer, devices, either – Apple is well aware of the needs of industrial robotics, and only today we learned is using smart factory equipment from LG Electronics to help make iPhones.

Myself? I think it should make a vacuum cleaner as a low cost start, but it is undeniable that the same set of advantages which are driving enterprise adoption could be bought to bear to create highly secure, highly sophisticated industrial machines. We know there’s money in manufacturing technology. ASML stock currently trades at around $1,000 a share.

Apple’s expertise in vertically integrating hardware, software, services and semiconductors, its learnings from manufacturing at scale for several decades, and its ability to collect and harness vast amounts of differentiated visual data across 2.3bn devices and over 1.4bn iPhones serves as the basis for its Robotics efforts, the analyst said.

There is some expectation Apple may in 2027 introduce a kind of desktop robot, ostensibly an iPad on an intelligent arm, which I think inspired Woodring to explore a little further.

What to watch out for

Signals that Apple intends going for gold in this market, may include:

• A successful Apple Intelligence re-launch, including tech partnerships.
• Increased hiring of AI, machine learning, and robotic engineers
• Accelerating patent filings,
• Enhanced visual data collection efforts, such as more cameras in more products.
• Partnerships and acquisitions of robotics companies

The analyst estimates that robotics represents a $130bn revenue opportunity by 2040, or 30% of Apple’s revenue base today. It could go higher – if it does, Woodring says Apple could generate $300bn of revenue by 2040 on the scheme.

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