An Apple Car is exactly what investors want

“Apple’s entry into the automobile market may finally silence the company’s critics, analysts told CNBC, amid rumors that the Cupertino giant is creating an electric car,” Nyshka Chandran reports for CNBC. “‘When one looks at Apple’s stock, people criticize the company for having a phenomenally successful franchise of the iPhone. The question for investors has always been if Apple can give us a larger addressable end market going forward,’ said David Garrity, principal at GVA Research, on Monday. The global automotive sector is exactly the kind of bigger market investors are looking for, he added, since it provides ‘multiples in terms of revenues and possible profit potential.'”

“Several media outlets including The Wall Street Journal and the Financial Times reported last week Apple was working to create an electric car that may be driverless although the tech giant has yet to confirm the reports,” Chandran reports. “An entry into the car market fits in perfectly with Apple’s long-term strategy and underpins share price gains, argued Ray Wong, principal analyst and founder of Constellation Research. ‘This [a car] is the next phase in Apple’s move towards building out the rest of its digital lifestyle. One of the things Apple is focused on is continuity of the experience. Rumors of the car business are Apple at its core: finding new markets for its operating systems. They’ve done it with music, phones, home and healthcare and now, possibly cars.'”

Full article here.

Related articles:
Apple’s electric car dreams may bring auto industry nightmares – February 17, 2015
Jean-Louis Gassée: The fantastic Apple Car is a fantasy – February 16, 2015
Apple is already positioned to be a car company in many ways – February 16, 2015
Why Tim Cook would want to build an Apple Car – February 14, 2015
Apple working on self-driving electric car, source says – February 14, 2015
Apple’s project ‘Titan’ gears up to challenge Tesla in electric cars – February 13, 2015
Apple’s next big thing: The Apple Car? – February 13, 2015
Apple hiring auto engineers and designers – February 13, 2015

26 Comments

    1. Between the recent automotive hires, the secret (planted rumor leak) and yesterday’s Times article where Jony Ive stated his passion for cars and his desire to build one. IDK, there might be something to this.

      1. Do you have a unnamed source for the “planted rumor leak.”
        What I would like is for Apple to invent a new compact battery that can be put in every vehicle in the world. A battery that will not leak acid and will not lose one-half of its strength at -10 degrees Fahrenheit. That would make Apple a two-trillion dollar company faster than a electric van.

        1. Apple isn’t a battery company, they are a computer company in the form of a Mac, an iPad, an iPhone and now a watch.. Modern cars are basically moving computers that Apple could certainly re-invent, it actually makes sense

          1. Apple is battery company since the middle of 2000s. They design their own batteries and use contractor manufacturers to actually make them.

            It is similar to way Apple does Retina displays. Apple invents it (with lots of thick patents on that), but uses multiple third-party manufacturers to make it. Same with systems on crystal (SoC).

            All those manufacturers to Apple are the same as Foxconn, except for it is component-level thing.

            1. No, Apple is not a battery company.

              Yes, they design batteries to power their various computer products (MacBook, iPhone, iPad, Watch, etc) but the end products are not batteries.

            2. Do they? I wouldn’t doubt it, because as I said they design batteries to power their products.

              However, i’m not full of crap. Look at the Apple Store. Apple’s products are computers and mobile electronic devices, not batteries..

      2. Minus automotive hires as those people are for in-car interfaces and such.

        Another thing is that automotive market is different from cellular and smartphone market.

        For example, before Apple, the cellular industry was profitable, but in not in big margins. After Apple, only Samsung could get profits, and this is only because they stole Apple’s IP to begin with.

        Automotive industry in middle-to-high-end segment, where Apple could theoretically go, is quite profitable. The likes of Daimler-Benz earn billions per quarter. And, unlike smartphone industry before Apple, Mercedes are generally amazing as cars, there is no automotive equivalent of ugly clunky UI that smartphones had.

        Since having high margins is an absolute must for Apple to enter any market, it means that what Apple can do is just become manufacturer of very good high class alternative to Mercedes, BMW and the likes.

        It definitely could be profitable business for Apple, but I am not sure that there is way to come up with something revolutionary in this field. Drive assistance/self-driving is already a thing partially on the roads and in testing, and electric cars are also already there for those who want it.

        Unless Apple came up with absolutely breakthrough battery — way beyond what Tesla has — entering this industry will be no different than Apple entering, say, classy yachts manufacturing, or beautiful ergonomic and high-technology furniture, or any other market.

        Apple can go basically to any market and make great products of any type. For now there is nothing that indicate that exactly automotive industry is different than others in this regard.

    2. Please!! Somebody make these idiotic rumors stop!!!!

      This is exactly why I don’t watch CNBC. It’s proof that criminally insane people walk among us. What’s terrifying is that they give these wing nuts TV time.

      MDN: Please iCal this one.

  1. The skeptic in me says the willful Car leak was released to balance the Watch reality, which will fall short of people’s admittedly breathless and insane expectations.

    1. Okay one-star-voters, you explain why Apple decides now to release info on their skunkworks project to reporters in multiple news outlets. You don’t actually think it’s a live leak do you? –There’s no such thing out of Apple HQ; certainly not for a project like this.

      1. there is no doubt it’s a planted leak. Times to coincide with Jony Ive’s Times profile, and the exec automotive hires, but just because it’s a planted leak does not mean that it has no validity. Apple has a history of entering markets where their technology can transform an industry. They could certainly do that in the auto industry.

  2. I am an investor. I don’t want Apple to get into the “green car” market which is a market for suckers. It only exists to satisfy the odd desires of liberals with more money than brains. Sadly, that market is growing. But, since these cars run on energy from coal plants. The coal plants are not the problem. It is the buyers who buy cars not knowing where the power comes from that tells me this is a customer base of ignoramuses. Not a good place to invest.

    1. You sound like a right wing radical. People know where there power comes from. So a hundred million ICE cars running around belching exhaust are somehow less impactful than a coal fired power plant? And of course it is possible in many locations to run your electric car off your own roof supplied solar power if you own a single dwelling home, thereby bypassing the coal plant entirely.

      You sound like one of those guys who refused to give up their buggy whip stock.

    2. ” only exists to satisfy the odd desires of liberals with more money than brains. Sadly, that market is growing”

      By definition, that means the free market is working. You aren’t against capitalism and free market forces, are you?

      /s

  3. I am an Apple investor and I think this car stuff is garbage.
    As an investor, what I really want is these hack journalists to stop spreading these ridiculous rumors around as if they were legitimate, factual news stories.
    There is NO Apple car in our future. Just stop it.

  4. “They’ve done it with music, phones, home and healthcare and now, possibly cars.”

    I agree with music and phones. The home and healthcare is just starting and there is little actual traction yet.
    As for cars – the amount of investment in both R&D and production capabilities are huge. It does not feel like Apple’s area of expertise.
    Still if this is what it takes to pump the stock up who am I to complain. Apple stock barely shifts after posting biggest profit ever in the world, but jumps 10 points on an iCar rumor. Precious.

  5. “Doing what investors want” is why companies fail. Apple has been successful because they do not take engineering advice from the peanut gallery. Any idiot can build a car – but there are probably 3 companies that build control platforms; Siemans, Bosch… remember QNX? They all suck – now imagine your engine management, telematics, and other features controlled by your phone… running IOS even. That’s a game changer.

  6. The NEWTON trademark is still active and being held by Apple. The Newton.com domain is active and is being used by Apple. There IS a reason. The MESSAGEPAD trademark is dead. Smith Electric owns patent for Apple preventing Apple from using the name NEWTON for and “electric” car. This opens up the likleyhood that Apple will in fact produce a Vehicle called Newton, a Hydrogen powered vehicle. This was likley Steve Jobs plan all along . If that is in fact the case then Steve Jobs forethought would represent a shocking realization to Jony Ive’s dream

  7. The question is: Who gives a crap what investors want?! Apple investors should be grateful that they have the opportunity to invest in such a profitable company, not deluding themselves that they know what Apple should do next.

  8. Apple entering car production? Probably not.
    Apple is researching in making intelligent car integration systems way better. More likely.

    I could guess that Apple is a bit disappointed at the slow integration of CarPlay in modern cars. I guess Apple is stepping up and beyond CarPlay in a smarter concept and might show off a highly rethinked integrated concept car, at most, with a user experience everybody wants, of course.

    If any.

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