With summer comes swimming and splashing in water. Eventually someone climbs up to the diving board and shouts, "Cannonball!". Everyone shrieks at the impending ripple effects and waves generated by that one single act. Tim Cook effectively did that when he confirmed that Apple was indeed exploring 'autonomous systems', specifically related to autonomous automobiles.
There is a lot of curiosity around how exactly Apple will enter the automobile industry. Will it be a Trojan Horse to sell more iPhones (which is the majority of Apple's revenues today)? Will it be a better version of a Tesla, with Apple's signature emphasis on connectivity, aesthetics and entertainment? Will they create an entirely new category of cars, in the same way that the minivan--a living room on wheels--was so disruptive to the auto market in 1983? Imagine, a home office or mancave on wheels.
What we can all be very certain about though is the ripple effect of new accessories an Apple auto entry will create. Imagine a The Fast and the Furious superconsumer had a baby with an Apple superconsumer. The U.S. accessory market for the automotive market today is well over $30 billion dollars growing at six to eight percent per year.
The question is what would need to be true for Apple's auto accessories to be a billion dollar market? If the average Apple car buyer spent the average amount a consumer who buys auto accessories spends--$1,500 per person--then you would need a little under 700,000 Apple auto consumers. Or four percent of the 17.5 million light vehicles sold last year. This is well below the average market share Apple has in smartphones globally of 10-20 percent per quarter, but comparable to the three to four percent market share of hybrid cars in recent years.
The point is that a billion dollar after market for Apple auto accessories is reasonable and would nearly double the current accessory market today for Apple products, which is about $1.3 billion dollars today.
1. Be Okay With Unknowns
So how can entrepreneurs plan for this upcoming cannonball of category creation? The key is to separate and plan for what we know versus worry about what we don't yet know. We do not know the when, how and how much of the Apple auto market. These are important, but largely unknowable until it happens, so let's not focus on that.
2. Focus On What You Can Know
However, we do know the who, where and why. There is enough data out there of who Apple superconsumers are and where they might be. Google insights, concentration of apple stores, or other syndicated exist to help us figure this out. Data about the who and where of electric cars and hybrids complement this nicely. While many businesses believe their categories to be national, the truth of the matter is most categories are hyper regional.
Anticipating the why is a little less certain, but Apple's distinctive signature in prior categories is very recognizable. It's not hard to imagine the Apple auto will likely be aesthetically pleasing. Accessories to protect and prolong its beauty will be popular. Similarly, fashion and self-expression accessories will likely be prominent as well, which is already true of the The Fast and the Furious accessory market today. Finally, it's all but guaranteed that the Apple auto will be highly integrated with everything else Apple has done. One imagines charging stations, holders, and connections for just about every iPhone, iPad, Macbook, Apple Watch and the ecosystem will be as prevalent as cup holders are now for minivans.
One final step is simply just investigating the auto accessory market today. Industry associations can tell you what the best-selling accessories are. Walk through an auto parts aftermarket store. Or even better, partner with one.
Figuring out the who, where and why should give any entrepreneur a head start in planning where to launch your business, how to find those Apple superconsumers and what suppliers to start partnering with. This way you can make a big splash versus being splashed on.