Deepwater Asset Management’s Gene Munster thinks that, after pulling the plug on its Apple Car, “The Titanic Disaster,” Apple needs to make a big move, such as acquiring electric vehicle maker Rivian.
William Gallagher for AppleInsider:
Asked by CNBC host Brian Sullivan whether Apple might instead buy an existing EV manufacturer, Munster said that buying Rivian is “doable.”
“And I think it does line up, Apple could do this, and I think that that would get them into that bigger market,” he said. “I’m disappointed that this turn in events, and so I don’t want to be predicting that they’re going to ultimately do something like this.”
“But I do think Apple needs to break into some new market,” he continued, “they need to do something big, and potentially Rivian would be just the answer to that.”
MacDailyNews Take: Rivian’s market cap is currently $11.11 billion which seems to be well out of caretaker Tim Cook’s comfort zone, seeing as Apple’s largest-ever acquisition was Beats Electronics for $3 billion (ironically, Cook did blow in the neighborhood of $11.11 billion on his Project Titanic debacle).
Forget about electric vehicles. The writing has been on the wall for electric vehicles for some time now.
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Gene Munster is that goofy analyst that also once insisted – for years! – that Apple was building a literal Apple TV set. An investor – or businessman – would be wise not to listen to Munster’s forecasts or ideas of what Apple “should” do.
Apple buying Rivian makes no sense – Apple already determined it couldn’t solve the one thing that would differentiate them from most other car makers: how to make a self-driving vehicle. So what does buying Rivian accomplish? Apple wouldn’t be adding any value (well, other than letting Rivians do CarPlay) to a co-branded Rivian vehicle.
I would actually find it extremely hard to believe that Apple did NOT build a TV set (yes, we all know that Apple never actually released a TV set to market and that its high def monitor was a failure).
Let’s see. $11 billion down the drain on Project Titanic and now Munster wants AAPL to flush another $11 billion plus on Rivian?
The crazy is strong in this one.
Ridiculous!! Stick to your core competence, Apple.
In a facebook group I am in, someone suggested that car companies profit about 6% and that Apple has a history of much greater profit margins. So cars don’t make sense for them. Makes sense to me.
What’s the profit margins for the mobile phone industry? What’s the profit margins for PCs? What’s the profit margins for the wristwatch industry? What’s the profit margins for headphones?
$11 billion on Titan is nothing. It’s 10 weeks of profit.
For that, Apple has a killer AI team ready-made in house they can apply to other products, they will dominate in-car electronics for a generation (far beyond entertainment systems), and they have a foundation to build from the moment truly autonomous vehicles become possible due to enhanced AI efforts across the tech sector.
Total speculation and coping. Nothing suggests the Titan Project’s achievements will suddenly spill over to the rest of Apple’s products. Why? Because we’ve seen no such improvements to Siri or other products along the way. The entire recent AI push was motivated by ChatGPT and the fire it lit under ever major tech companies lazy butts.
The idea that Apple would be able to launch a Tesla rival out of the gate without hundreds of millions of user driven miles worth of data was nuts. The problem isn’t that this project never achieved its goal its that it was allowed to drag on for years past its expiration date.
Siri hasn’t improved in yeeears. There are so many “simple” AI incorporations that are NOT even intimated in current Apple apps/tech (deduced b/c little has changed in app performance). Wouldn’t one think that AI tech could “read” what is being written and suggest words and spelling that are fitting to the context? Little appearance of such, if so. Suggestions of words are basic and spelling is amazingly adrift.
As I think about a company venturing (once upon a time) into a driverless mass capable of great destruction and injury, but day-to-day and, relatively simple, injections showing AI “prescience” are hardly tangible, is simply befuddling. I’m thinking simple S…not rocket, or car science. Bottom line, if Siri is ANY indicator, things are messed and they’ve been messed for yrs.
Apple seems to be advancing well as a creative production co, tho. Maybe that’s the best path? Margins will surely smother those associated with EVs…at least per AAPL’s expectations. Just make sure the guns aren’t loaded on the set and the Nuevo Disney may appear.
There is no profit model in the EV industry right now except for mining operations and making battery components. The charging networks are big money losers.
It took Tesla 17 years to generate a profit and without the sale of carbon credits to other automakers, they would barely be breaking even, if at all.
If Apple could solve charging speed to make it almost as convenient as filling the tank with gas along with selling the vehicle at ICE price levels, then you have a compelling product that would encourage mass market adoption.
Price is the crucial factor and Apple definitely wasn’t going to undercut anything Tesla offers.
What is often left unsaid though is that this wasn’t just another product to launch and distribute. The “Apple Car” would have to be produced, distributed, marketed and serviced by “Apple Motors”, essentially its own company worth tens of billions, not to mention for the need to either adapt to the crappy charging infrastructure out there or work with Tesla to use their chargers.
Tesla is a smaller company than Apple but as a car company it’s leagues ahead of the vertical integration, infrastructure and R&D that Apple had or would have in this space.
Would have been a better spend than the 10b cook flushed down the toilet with nothing to show for it. 10b for divination isn’t a bad deal. Then again, not sure why Apple needs to make cars.
Sadly the best deal on the table was Tesla. Better than the business itself, Elon would have been the true acquisition gold and replacing loser cook with musk would have been amazing.
Too bad they passed on 40b for Tesla. In retrospect it would have been a bargain.
The real problem with buying rival is Apple is a bozo company full of losers. They need to fire 90% of its loser bozo employees. A true bozo culling like Steve Jobs would do from time to time..
Why is that a problem? Because the bozos thwart and ruin everything they touch. Look at AOL and yahoo. They would buy up companies, borg them and destroy them. It’s where great tech would go to die. Apple is now that same thing because it’s overrun by bozos defending their loser fiefdoms, and are easily threatened because almost anything and anyone is better than the losers there. So they want to kill every good new acquisition, and they do.
And that’s the real reason why buying rivian isn’t a great idea for Apple. If they do, they’ll destroy rivian. And rivian has some nice products, and if they stick to it, can become a decent albeit smaller competitor to Tesla. But Apple is just a bottomless pit of bozo loserdome where tech goes to die now, so there’s no point.
It is highly recommended for Apple to purchase Lucid!
The writing is on the wall for electric vehicles to take over sooner that you think.
https://www.bbc.com/news/business-57253947
Putting an article from June of 2021 up as proof isn’t good ‘writing on the wall’ when in recent weeks Mercedes, Volvo announce their EV goals were unattainable and on top of that Toyota has never been on board with EVs.
I think they know more than the BBC “journalist”.