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AAPL sells off today; TSLA up over 5%; up over $36/share; trending toward $775 share price; about $731 billion market cap;
iPhone: link here.
- all new iPhone 12 models accounted for 76% of all iPhone sales in the US in October and November (wells before the big holiday sales)
- the standard iPhone 12 was the best selling model, accounting for 27% of those sales
- iPhone 12 mini: just six percent of the total iPhone 12 sales (great news for Apple: larger phones; larger margins)
- iPhone 12 Pro and Pro Max sales numbers closer to the iPhone 12
- but look at this: last year's iPhone 11 models -- accounted for 69% of sales in the period after their launch, so the iPhone 12 models did better overall
Apple App Store:
- $1.8 billion over the holidays. No comparisons provided. Lousy story.
- supplier expects spike in 5G phone demand;
- Apple's new patents: wireless-charged iPhones;
The Apple car: A Washington Post link, a Bloomberg story. Archived.
A red-hot trend in the car industry is for new entrants such as Fisker Inc. to hand over the complicated and capital-intensive work of engineering and building vehicles to a contract manufacturer. Increasingly, cars are judged on their software and electronics so why bother wasting time and money on metal bashing?
If Apple Inc. is indeed seriously considering launching its own vehicle, as press reports suggest, then it will almost certainly decide to outsource, as it does with the iPhone. Apple designs the phone and its operating system but employs Foxconn to assemble components into a handset.
There’s at least one big contract manufacturer ready to take advantage of these seismic industry changes: Canada’s Magna International Inc. “If Apple is serious about building a car … Magna Steyr should build it,” says Evercore ISI analyst Chris McNally. Even if Apple doesn’t come knocking, the manufacturer is already advising tech groups and start-ups looking to enter the automotive business, and investors have taken notice. Magna’s share price has almost trebled since March, giving it a $21 billion market value.
Magna is one of the world’s biggest car-parts suppliers ....
The contract-manufacturing subsidiary, Magna Steyr, is the really interesting piece. It builds niche premium vehicles at a factory in Graz, Austria, including the Mercedes G-Class 4x4, the electric Jaguar I-Pace and the BMW Z4 sportscar. Typically those companies choose to outsource the work, rather than retool or build a new production line, because the sales volumes are relatively small.
In 2019 Magna assembled almost 160,000 vehicles – more than many carmakers produce — and generated $6.7 billion of revenue from these activities. Together with joint venture partner Beijing Automotive Group Co. (BAIC) it recently added another facility in China, which is capable of producing 180,000 vehicles yearly. A north American plant might be next.
The Austrian Magna subsidiary is reportedly in talks about producing vehicles for Canoo Inc., another SPAC-backed car start-up, while in China it’s started producing the Arcfox for BAIC’s electric vehicle offshoot. Other projects include helping Alphabet Inc.’s Waymo subsidiary integrate self-driving technology into vehicles and working with Sony Corp. to produce the futuristic Vision S prototype car.
You can see why new entrants may chose to work with a neutral party like Magna rather than partnering and sharing plans with an existing carmaker that might be a potential rival. As well as providing production capacity, Magna says it can handle the entire vehicle development process. The company was hired to turn chemicals billionaire Jim Ratcliffe’s Grenadier 4x4 into reality.
Still, Magna’s shares look less dauntingly overvalued than many companies with one foot in the electric-vehicle future. Even after its blistering recent run, the stock is priced at less than 12 times forward earnings.
Pop quiz: what do you think Apple and Magna Steyr are up to? I will provide my opinions at a later date, if I remember, but the article above holds a huge clue, especially if you like connecting dots like I do.
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