CNBC Asia Interview: Enter The Apple Auto?
Updated: Apr 23, 2021
Larger Addressable End Market – Could Leverage Proprietary AAPL Skill set Profitably
AAPL Auto – Five Factors in Favor: The following five factors would support AAPL should the company wish to enter the automotive market:
1) $178bn in cash on hand – its financial strength derived from the profitability of its iPhone smartphone franchise provides AAPL with a wide range of strategic options,
2) Autos are the ultimate mobile device – given the electronics content of modern cars, it is not unreasonable to consider them potentially as nothing more than iPads on wheels,
3) Management team members drawn from the automotive sector – Eddy Cue, AAPL SVP Internet Software, is board member of Ferrari; Luca Maestri, AAPL CFO, was formerly with GM; Marc Newson, AAPL design team member, previously designed concept vehicles for Ford,
4) Company-owned retail distribution network – TSLA sells its electric vehicles through company-owned stores, thus skirting franchise laws globally; AAPL could take a similar approach, and
5) Expertise in managing global supply & distribution networks – with the excess capacity available in the global automotive sector, AAPL does not need to become directly involved in vehicle assembly, but can instead outsource the capital-intensive aspects of the supply chain while retaining control over the more proprietary & profitable elements of the final product’s conception and execution.