Apple, Inc. (AAPL) Car rumors resurfaced this week after Digitimes reported that the company was in Asia, holding discussions with potential partners and suppliers regarding its self-driving car project.

Apple Car Project Likely to be a Success

Apple is one of a few companies that consistently deliver excellent hardware + software + services, Loup Funds' Andrew Murphy said in a note. "This rare competency has driven success with iPhone and will likely do the same with Apple Car," the analyst said.

Highlighting three case studies, the analyst said that Incumbents are replaced when new market entrants get the combination of hardware + software + services right. Apple, with its iPhone, combined all the three – a great software, dedicated hardware, and exceptional services with the launch of the App store a year after the introduction of the iPhone, the analyst noted.

Murphy also highlighted the success of Peloton Interactive, Inc. (PTON). The fitness equipment maker could have delivered just a good product with nothing more than an app, the analyst said. Peloton, instead, aimed to deliver a superior software experience so it built its own hardware, he added.

"And while subscriptions only represent about 20% of Peloton's revenue, the software and content is what differentiates the hardware offering and drives the entire value proposition," Murphy said. Tesla, Inc. (TSLA) fundamentally reinvented the car as a combination of hardware + software + services to displace legacy automakers, the analyst noted.

An Opportunity For Apple

Transportation is an obvious area of opportunity for Apple, Murphy said. Tesla has proven that the user experience in a car benefits from the tight integration of hardware + software + services, he added. This, according to the analyst, is increasingly important as the market transitions to electric, autonomous vehicles, and offers more opportunities for automakers to provide related services.

Secondly, the market is huge and the nature of the product leaves room for several big players to succeed, the analyst said. Thirdly, Apple's track record of executing complex combinations of hardware + software + services suggests that the company can deliver something better in the car market, Murphy said.