In a note to clients Monday, Morgan Stanley’s Katy Huberty reports that electronic parts suppliers in Asia have seen the future and it’s not 3D virtual reality headgear—at least not for now.
“As component suppliers look for the next growth engine,” she writes, “they’re shifting focus to autos, engaging both existing brands and potential new entrants. Suppliers see many opportunities to leverage smartphone expertise such as in cameras, sensors, batteries, and displays. Given the changing supply chain as the industry transitions to electric from transmission powered vehicles and eventually to autonomous, we see the opportunity for technology vendors, including Google GOOGL 0.36% and Apple AAPL -0.06% , to dominate. Component suppliers see new wearables categories like head mounted displays, as further away than the auto opportunity.”