It’s the question that hangs over every Apple keynote, every shareholder meeting, and every hushed conversation in Silicon Valley: What comes after the iPhone?

For nearly two decades, Apple has been the iPhone company. Sure, there are Macs, iPads, and the new Vision Pro. But the iPhone is the engine. It’s the sun around which Apple’s entire $3 trillion solar system orbits. Finding the “next big thing” to replace that kind of gravity is arguably the biggest challenge in modern business.

According to a new research report from Morgan Stanley, the answer might not be a device you put in your pocket. It might be one that greets you at the door.

The investment bank is making a massive bet that Apple’s next frontier is humanoid robotics. And they’ve put a staggering number on it: a potential $133 billion per year in revenue by 2040.

The $133 billion bet

In a note to clients, Morgan Stanley analysts, including veteran Apple watcher Erik Woodring, laid out what they call their “median case.“

“Leveraging Apple’s market share across a number of leading consumer products today, as well as considering the opportunity to monetize both products and services, we conservatively estimate Apple’s Robotics revenue can reach $130 billion by 2040… which assumes 9% market share …15 years from now,” Woodring wrote.

To put that in perspective, $133 billion is more than Apple’s entire Mac, iPad, and Wearables divisions combined (in 2023). The analysts aren’t just predicting a new product category; they’re predicting a new iPhone-level event.

The logic is that Apple wouldn’t just sell the robot; it would sell the platform. Think of a “Robot App Store” or a “RobotOS” subscription, leveraging the company’s massive $130 billion cash hoard and its existing ecosystem of 2.3 billion active devices to become the default operating system for the home.

Why now? The sci-fi dream becomes a business plan

Humanoid robots have been a staple of science fiction for 75 years, but they’ve always been just that—fiction. So why the sudden confidence from Wall Street?

In a word: AI.

The recent explosion in generative AI and large language models (LLMs) has solved a massive piece of the robotics puzzle: the brain. In the past, engineers had to meticulously program a robot for every conceivable task. Now, thanks to AI, a robot can learn, adapt, and understand natural language commands.

This new “physical AI,” as NVIDIA CEO Jensen Huang calls it, is the missing link. Huang, a major proponent of the space, believes robots represent a “multitrillion-dollar opportunity.” His company is already building the foundation, marketing its Isaac Gr00t (a foundation model for robots) and the Jetson AGX Thor, a powerful computer designed to be the brain for autonomous machines.

The race is already on

Apple is famously never the first to market. It wasn’t the first to make an MP3 player, a smartphone, or a smartwatch. It just waited until the technology was ready and then made the best one.

And the robotics market is already getting crowded.

• In manufacturing: Foxconn, one of Apple’s largest partners, plans to deploy humanoid robots based on NVIDIA’s technology at its AI server plant in Houston.
• In logistics: Amazon announced this summer that it rolled out its one-millionth robot. While most of these are Roomba-like “drive units” for moving shelves, the company is also an investor in Agility Robotics and is actively testing its bipedal “Digit” robot in its warehouses.
• In your driveway: Elon Musk’s Tesla is all-in on its “Optimus” robot. In a characteristically bold claim, Musk posted on X that he sees 80% of Tesla’s long-term value being tied to these robots, which he envisions as a future universal worker.
• In your home (sort of): Amazon also offers the “Astro,” a $1,599 wheeled home sentry, but it’s an invite-only “Day 1 Editions” product—more of a public experiment than a mass-market device.

Apple’s undead car project

If Apple decides to enter this race, it won’t be starting from scratch.

For years, the company poured billions into its secretive, and now-defunct, self-driving car effort, known as Project Titan. While the car itself is dead, the R&D isn’t. That project forced Apple to become a world-class expert in exactly the technologies a robot needs: autonomous navigation, advanced sensor fusion, and on-device AI for real-world decision-making.

In essence, Apple may have accidentally built the perfect robot brain while trying to build a car.

According to reporting from Bloomberg‘s Mark Gurman, Apple is already dipping its toes in the water. The company is reportedly experimenting with a tabletop robotic arm attached to an iPad-like display that can track and follow a user during a video call. It’s a small step, but it’s a start.

The $30,000 reality check

Before you start saving up, let’s pump the brakes. Morgan Stanley’s own report comes with some serious hurdles.

First, the price. The analysts estimate an average selling price (ASP) of around $30,000 per robot by 2040. Even with that price declining over time, that’s the cost of a new car. It’s hard to imagine consumers lining up to buy a mechanical helper for the same price as a Honda Civic, especially when they need to take out a loan to do it.

Second, the technology just isn’t there yet. As a society, we’re still struggling to perfect computer vision for cars, which just have to stay on a road. A home robot needs to navigate a far more chaotic environment: stray piles of laundry, sleeping pets, and fragile glassware.

The demos we see from companies like Tesla and Agility are impressive, but the bots are often painfully slow. They can fold laundry or load a dishwasher, but not in a way that’s actually helpful if you’re in a hurry.

Morgan Stanley’s projection is a 15-year plan. They estimate that even by 2040, penetration will only be about 1.65% of US households.

For now, the humanoid robot revolution is happening in the one place they make sense: warehouses and factories, where the environment is controlled and the $30,000 price tag is a sound investment.