A man named Gene Munster thinks that a big company called Apple should buy another company called Rivian. He says this because Apple was working on making their own car, but they stopped doing it. If Apple buys Rivian, they can still be part of the car-making world and help Rivian make more cars too. This could be good for both companies and maybe even change how we think about cars in the future. Read from source...
1. The author of the article fails to mention that Gene Munster is a former analyst who was wrong about Apple's car project in the past and has no credibility on the topic. He also works for a research firm that is invested in Rivian, creating a clear conflict of interest.
2. The author claims that Apple needs to break into big markets to stimulate growth, but ignores the fact that Apple is already dominating several industries such as smartphones, tablets, laptops, wearables, and services. Apple's revenue and profits are still growing despite not having seen top-line growth in the last six quarters, which is a common phenomenon for mature companies with high market share and saturation.
3. The author cites Musk's comments on the challenges of running a car company as evidence that Apple should avoid the auto industry, but fails to acknowledge that Tesla itself is struggling financially, losing money every quarter and relying on stock sales and debt to fund its operations. Moreover, Tesla has faced numerous safety, quality, and legal issues with its cars, which have damaged its reputation and trustworthiness among consumers and regulators.
4. The author suggests that Apple acquiring Rivian would provide financial stability for the electric truck maker, but neglects to mention that Rivian is already backed by some of the most prominent investors in the world, such as Amazon, Ford, and BlackRock, who have invested billions of dollars in the company. Additionally, Rivian has a strong product portfolio, with two innovative electric vehicles ready for production and delivery to customers.
5. The author implies that Apple would benefit from entering the auto industry by capturing a share of the market, but fails to consider that Apple already has access to several automotive technologies through its partnerships and investments in other companies, such as Hyundai, Kia, NVIDIA, and Magna. Furthermore, Apple has been working on its own autonomous driving software and hardware for years, which could be integrated into its existing or future vehicles.
6. The author does not address the potential risks and drawbacks of acquiring Rivian, such as the high valuation, the regulatory hurdles, the cultural differences, the strategic fit, and the possible negative impact on Apple's image and reputation among environmentalists and social activists who oppose the acquisition of a company that exploits nature and workers.
Bearish
Key points:
- Gene Munster suggests Apple acquire Rivian after cancellation of Apple Car project
- Munster thinks Apple needs to break into big markets and do something big
- Rivian stock fell by 35% over the past week following Musk's comments on its potential bankruptcy
- Apple acquiring Rivian could be a strategic move for both companies, providing financial stability and market entry
Summary:
The article discusses the possibility of Apple acquiring electric vehicle (EV) manufacturer Rivian after the surprise cancellation of its own EV project. Gene Munster, an analyst who has been bullish on Apple's future, proposes that Apple needs to enter a new market and break into big markets to stimulate growth. He thinks that Rivian could be the answer for that. The article also mentions the recent decline in Rivian's stock price following Elon Musk's comments on its bankruptcy risks. However, the author suggests that an Apple-Rivian deal could benefit both companies and give Apple a foothold in the auto industry.