Why Apple might acquire BMW

“Google has multiple points of entry into the auto industry including maps, self-driving algorithms, operating system software and applications. Apple has distinguished itself mainly as a hardware and design company while redefining mobile device interfaces,” Roger Lanctot wonders for Strategy Analytics. “Apple could make a car or Apple could hire an ODM (like Magna Steyr) to make a car. Or Apple could buy BMW. Seriously.”

“BMW is not a random example of a car company, any car company, as a suitable acquisition target for Apple. An acquisition of a car company will enable Apple to have an immediate impact, and BMW is the most appropriate acquisition target given the extraordinary alignment between BMW and iPhone ownership,” Lanctot writes. “Additionally, the automotive industry globally is plagued by over-capacity or misaligned capacity. Apple’s CEO, Tim Cook, is most likely disinterested in adding yet more excess capacity with all of the associated negative environmental impacts. Tapping an ODM such as Magna Steyr as a manufacturing partner, though a relatively rapid and reliable point of market entry, is limited by Magna Steyr’s existing capacity and commitments. In contrast, BMW is expected to see compound annual production growth of 4.2% through 2022, based on estimates from LMC Automotive.”

“This growth – which puts BMW on a path to produce nearly 3M cars in 2022 – is an appealing prospect for Apple as is BMW’s philosophy of vehicle connectivity. BMW has one of the most advanced visions of vehicle connectivity for data acquisition and integration into the car owning experience and for the purposes of enhancing vehicle contextual awareness, safety and efficiency,” Lanctot writes. “Even if Apple has downshifted in its plans to build a car it could still target regional markets outside the U.S. where enthusiasm for cars is still on the rise – places like China, India, and Brazil.”

Read more in the full article here.

MacDailyNews Take: That would be some massive acquisition. BMW currently has a market value of $48.9 billion.

Hey, Wall Street seems to love “moonshots,” right? 😉

Regardless, as we wrote back in March:”When Apple enters markets, it’s because they can bring something(s) so unique to the table that significant disruption is inevitable.”

It goes without saying that Apple would create a premium vehicle, premium-priced for premium customers as usual, not a some low-end crate.MacDailyNews, September 21, 2015

SEE ALSO:
Apple Car: Jony Ive unhappy with ‘Project Titan’ progress, Apple implements hiring freeze, source says – January 25, 2016
Apple car: Will it be more like BMW or General Motors? – November 23, 2015
Apple’s visit to BMW factory fuels further rumours of possible partnership – August 3, 2015
Apple, BMW flirting with an eye on car collaboration – July 31, 2015
Apple said to be in talks to use BMW i3 carbon fiber body as basis for its own electric car – July 27, 2015
BMW: Our talks with Apple don’t involve developing or building a car – March 5, 2015

41 Comments

    1. I thought the exact same thing when I read this!!

      Why would Apple buy a car company who primarily burns dead dinosaurs as it’s fuel source??

      Apple buying Tesla would make sense – a 21st Century Auto maker coupled with a 21st Century Tech giant – now that’s BRILLIANT!

      1. Yes, a company that powers its cars by electricity created by burning dead dinosaurs in other states so liberals can call themselves green. Throw in an illegal government subsidy and your all set.

      2. Sorry, but oil is not made out of dead dinosaurs, but rather dead plants and trees, which also become “fossils.”

        TESLA has no USA-wide dealer network, made necessary by laws in many states, laws from which TESLA is now feeling the sting, that prevent direct sales from manufacturer to final customer.

        Apple Stores are manufacurer owned, and thus out, and are too few and too small to sell cars.

        BMW has a highly organized such network in the USA.

        Thus the plot for “smokey and the bandit,” however sad it is that this still is the case in the USA.

    2. I agree. Apple isn’t going after the BMW market with the Apple Car, just like they weren’t going after the Rolex market with the Watch. They’re going for the people that bought the black Watch Sport, that is to say, a lot of people, not a few insufferable twits. BMW doesn’t bring anything to the table except an arrogant attitude concerning their specialness.

    1. Elon has a vision for Govt. subsidies. His company couldn’t stand on its own because of the high cost to build a Tesla. The people who can afford one are getting a tax credit for doing so. Why do they need a credit? Isn’t it about “saving the planet?”/s
      If Elon’s cars made sense then he wouldn’t need the money from U.S. Tax payers for his vanity project. Tesla is subsidized up the ass just like Obama’s, now bankrupt, solar energy buddies and will never make enough to ever pay it back. The money is long gone.

      1. The govrrnment’s investment in Tesla today is more like the investment in NASA in the 60’s. This is disruptive, new technology and research — one a responsible government should be making. All sorts of knowledge and new capabilities will rise from it.

        But Apple is not going to buy a 20th century transportation company that is the current equivalent of a 19th century horse and buggy manufacturer to get the old technology on the way at the door. All it needs is the expertise, not the infrastructure and those old world business costs. A purchase of Tesla would be more likely.

        1. True, it is fairly *similar* … but Tesla is a private corporation, not a Government Agency.

          As such, subsidies are potentially yet another corporate handout of US Citizens’ tax dollars .. or another Solyndra (the solar cell company) scandal.

      2. Actually, Tesla has fully repaid it’s government loans. As for the tax credit, these are used in many different areas of the economy to incentivize consumer and market behavior in order to achieve particular social or economic objectives.

        You can disagree that the objective of clean energy usage is not desirable (an opinion I find stupid but you are entitled to it), but you have absolutely no right to criticize the concept of subsidies if you have ever taken advantage of other “taxpayer subsidized” activities like deducting mortgage interest, having a child (dependents lower your tax bill), collect social security, are a veteran that receives any benefits, drive on public roadways in your personal vehicle or take any kind of mass transit (both are subsidized), etc. etc. etc. The list of “subsidized” activities in our economy would go on for pages.

        1. It’s not cleaner, as the pollution is simply exported to places where there are fewer attorneys and less money to pay for them and for campaigns to elect agreeable politicians into key positions.

          Very nice cars, however, and I’d like to have one. They look cool and are very speedy.

          Thev are not, however, “clean air” vehicles.

    2. How about just get rid of Tim? A set top box is supposedly the future of TV?

      “It’s all about apps,” Mr. Cook?

      When has it ever NOT been about APPlicationS?

      At least with an Apple II, one coukld write an APPlication program out of the box. The early macs came with MacWrite and MacDraw. iMacs came with a suite of Application and Utility programs.

      And PC owners were stupified, after installing DOS from several disks, that they still had to go buy some software APPlicationS at a computer shop open after 9 or on Christmas day.

  1. This actually makes some sense–perhaps not as an outright buy, but I can see Apple taking a large position in BMW.

    It’s a common theme on this board that Apple’s strengths in industrial design and software will magically give them all the knowledge they need to build a car. The jump from computers to phones is miniscule compared to the jump into cars.

    Of course Apple could build great navigation software and a great in-car experience. But you still have to know how to make something that will operate safely for 150,000 miles or more. It will have to pass crash tests, meet environmental regulations, performance metrics. This doesn’t grow on trees. This is something that major car builders have learned through a century of experience. Apple needs a partner.

  2. This is why the dividend must be higher, to keep money from being wasted.
    how crazy is it for apple to build a car?
    very crazy!
    bmw does not make as much money as apple does now. all the car companies together don’t.
    what sense does it make to enter a market where there is no possible way to equal the profits of the computer company?
    this is why apple’s ceo must go. if he is actively pursuing this idea, it’s another bad decision.
    you can look to tesla to see the problems and money lost being in the car business.

    apple should build wire, wireless, cellular network. 600, 700, 800, 1000 dollars is justifiable for a phone if the service comes with it. Not as flashy as a new car, but re-occurring dollars.

  3. Why the hell would apple buy kraut motors – this is MURICA. Apple didn’t buy Motorola to invent the smartphone and it sure don’t need a german car company to invent the smartcar.

  4. Ford Motor Company actively pursued BMW at one time and could never come to a deal. The problem was not the price quoted by Ford, but the tax liability of the Quandt family if they were to sell the company. The family controls almost 50% of BMW.

    Apple could certainly afford it, but the price would be exceptionally high.

    Next, a significant portion of the production assets are in Germany with it’s exceptionally high labor costs. Apple tried to and has maintained roughly 30% profit margins on it’s products. I am not sure how you do that with the costs of acquisition and high labor costs.

    Of course, Apple could do an inversion and become a German company on paper.

      1. Do not know about that but VW has partial ownership by the Lander of Lower Saxony (equivalent to a state) owns almost 13% of the stock and holds voting rights equal to 20% of the total.
        BMW, to my understanding is publicly owned with no state ownership. Same for Daimler.
        The public ownership of VW goes back to the fact the company was started during the Nazi era with people buying stamp books to pre-purchase their cars. When the ownership was sorted out- the state of Lower Saxony was granted it’s shares. The German government sold it’s shares on the open public market.

        I own ADRs (American Depository Receipts) in VW AG (VLKAY). I also own shares in Tesla (TSLA) and Ford Motor (F).

    1. Thank you, DavGreg, for reviewing the facts regarding BMW’s ownership that any moron – but apparently not the writer of this article – could easily discover in a couple minutes of research. Short of writing a check for something like $50B, the Quandt family is not selling their stake in BMW, and that doesn’t address the other half of the automaker they don’t own.

      Moreover, the writer doesn’t appear to understand who Magna Steyr is, its current relationship to BMW, and the fact that, when it comes to whole cars, it is NOT an ODM. However, its experience building cars is considerable and Magna Steyr would be one of just a couple companies in the world that could be Apple’s manufacturer. That said, I think it is more likely that Apple would go to Asia for its production.

      1. Magna Steyr would be the front runner to handle the manufacturing of an Apple Car if it is built like conventional cars. On the other hand, if Jony Ive comes up with a design that is not based on pressed metal and uses a different material, conventional car manufacturers wouldn’t really have much to offer Apple.

        My hunch is that Apple will not be using pressed metal as the basis for it’s car and therefore Apple will need to either invest to expand specialist fabrication factories or build dedicated factories from the ground up.

        I think that with Jony Ive starting with a clean sheet of paper and with his track record for re-thinking things afresh in the light of what is technologically possible right now, it’s highly probable that an Apple Car will be quite unlike conventional cars and will need to be built in an entirely different way. However with Ive’s interest in the manufacturing process, he will have designed not only the car, but the process by which it’s manufactured. Therefore I see no BMW for Apple and no Magna Steyr involvement.

          1. It’s not quite that simple, it depends on what you call Rolls Royce. BMW only have a licence for the name and logo, while the more tangible things like the car designs, production facilities and grille trademarks belong to VW.

            From Wiki …
            In 1998, Vickers sold it to Volkswagen AG. The sale included the vehicle designs, model nameplates, production and administrative facilities, the Spirit of Ecstasy and Rolls-Royce grille shape trademarks, but not the rights to the Rolls-Royce name or logo which are owned by Rolls-Royce Holdings plc and were licensed to BMW AG.

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