“Apple Inc. is rumored to be developing its first automobile, but the iPhone maker might be better off investing in a new streaming video service,” Louis Bedigian writes for Benzinga.
“Cody Willard, chairman of Scutify (a financial social network), told Benzinga about the benefits of disrupting pay-TV,” Bedigian writes. “‘[Apple is] set up to dominate the content subscription businesses of the future,’ said Willard. ‘If you take the market caps and/or revenue of the cable industry, that’s the potential market that Apple’s trying to disrupt — that Netflix is actually successfully starting to disrupt. There’s about a trillion-dollar value that Apple can capture in video. Potentially; they’re not going to get all of it. But if they can get 10 percent of it, it’s $100 billion of market cap valuation, which at this point is a rounding error for the stock.'”
Read more in the full article here.
Cody willard the national enquirerere type poster boy of mickey mouse finance
Gee, Apple is on a tear, building data facilities all around the world right now, as if they had bigger plans than just syncing people’s photos.
For effort expended versus profit realized, I reluctantly side with making an automobile. The video streaming idea has been around for fucking ever, beginning with Apple’s “hobby” of AppleTV. Time and again what Apple has run into (the same issue facing their online competitors) is contracts with holders of media (movie / TV studios). Because of the leveling power of the Internet, content holders can pit all the dogs against each other to bid up the value of their content. And it has to be renewed again and again.
The prospect of making a car, however, has no deal-breaking / ball breaking dependency – it truly deals with atoms not bits. There are the two primary bottlenecks of correctly assessing customer need and demand, and compliance with federal regulations for safety and energy efficiency.
I vote for “yes”, that Apple will make a car rather than enter the shadowy world of shifting alliances in the entertainment business.
dan
Is there any reason why Apple cannot do more than one thing at a time ? Apple might be planning to disrupt the television industry as well as the car industry and the luxury watch industry.
I feel the exact opposite way.
A better version of Netflix? Who cares, whatever. Watching videos is mostly something people do just to pass the time, when they can’t think of anything better to do.
Better cars, on the other hand, would be huge. It’s a gigantic part of how people use technology to see and interact with the rest of the world.
Both could be very profitable for Apple, sure, but cars have a drastically bigger impact in the intersection of technology and humanities. It’s clearly more worthy of Apple’s unique set of skills and attention. Netflix is good enough the way it is, cars need to be better.
In America people spend more time watching TV and consuming entertainment & news than driving/riding in cars. In 2010, it was on average 30 mins driving to 3.5 hours watching TV/entertainment/news. So your assumption is off, way off. The incoming prime “Demo” doesn’t watch actual television (broadcast and cable) like prior generations. Thus there is a ripe market to capture that share. That is the point the author is making.
I never said people spend more time driving than watching TV.
My view is that most time spent watching video is wasteful, idle, or unimportant time. The time Americans spend using transportation is is way more important and consequential in ways Apple cares about.
It’s weird that you’re counting minutes and hours, as if that’s important here. The average American probably spends way more time sleeping than driving and watching video combined – so if that actually mattered to Apple, they would make pajamas and mattresses.
The only reason we NEED cars is to get some place to do something we can’t do where we are. We often WANT cars to get away from our troubles, relax, test our abilities to drive, feel in control, etc.
If we built our cities and towns so that we could live, work, shop and entertain ourselves within walking distance, we would not NEED cars. The more cars, the more roads, the more spread out our cities, the more we want more roads and the more we will need cars. A vicious circle.
We NEED better planned communities that are more like villages that are built around a few industries. We NEED simpler lives and more meaningful interactions with each other.
A agree that better planned communities designed for less local traffic would be great. However, I don’t think that would actually diminish the value of travel and transportation technology. Experiencing new places, seeing new people, and new ways of living is always invaluable. Having better planned communities, if anything, would add value to travel, as there would be better places to experience.
I also have some initial doubts about Apple’s qualification for community planning. They’re a private company that excels at vertical integration, while communities tend to be public enterprises of horizontal integration. A good test for Apple in this field will be their redesigned campus and surrounding infrastructure: if that works well, I could see them start designing larger communities.
I think this one is already in the bag. The Auto industry is next.
Ditto!
Very good amazin blog! Do you have any plans pertaining to wanting article author? I’m and an authority in this area as a result I can realize your power.