[manmal]

Only if you know how. Burning cash in a bonfire won't do Apple good. Shareholders and the market in general would not approve of money-losing follies.

But I think if they really get serious about building cars, they can make good use of some of that money in order to quickly scale up. Where Tesla has to raise billion after billion to ensure they are not running dry, Apple could just use up reserves.

[del82]

One question I have about Apple is: why should they want to build cars? Or anything else, really, except phones and computers and possibly other personal electronics? Why shouldn't they stick with what they're good at, invest their cash in that business when they can, and when they can't then either return it to shareholders or hire a portfolio manager or ten to invest it elsewhere?

People often criticize Twitter for trying to be Facebook instead of just being Twitter. Why shouldn't Apple just be Apple?

[mikhailt]

They already are, you have to understand, they're practically printing money with the iPhones. They are capturing more than 90% of the market's profits for high end smartphones.

They are not sitting around doing nothing. They cannot just print new innovation every year, it doesn't work like that.

The problem will be when the market is fully saturated and people start upgrading every 5-10 years instead of the current 2 years.

[valuearb]

I don't think saturation is a problem. You can't get silk from a souse ear, or something like that. Apple's growth rate will continue to slow, but as long as it maintains it's competitive position it will still be very profitable and a good investment.

The Buffett investment (actually his sub-managers did the investment I'd bet) is an example of Apple gradually becoming a more attractive investment to value investors as it gradually becomes a worse investment to growth investors.

[ghaff]

Furthermore, I have no doubt that Apple has people doing work in all sorts of adjacent markets like AR, VR, more wearables etc. But the consensus seems to be that it's going to take a lot of things coming together for true mainstream products in AR for example. And for better or worse releasing effectively a version 0.6-type product to test the waters just isn't Apple's style (at least deliberately).It's not just a matter of no company has invested enough money yet.

[dasil003]

Because Apple's secret sauce is great UX by vertical integration of hardware/software. Although a car is a much bigger challenge, it is one of the few markets that can move the needle for them. Apple has always placed strategic bets on the future, and now that they are currently the most valuable company in the world by a significant margin there's no better time.

The Twitter case is quite different; it's not as if Apple is going to turn the iPhone or Mac into a car. The problem with Twitter was that the original product vision was never coalesced and realized properly. Twitter in some ways is a beautiful thing that Apple, Microsoft or Facebook could never produce, but for whatever reason that was not good enough for stakeholders and they reached beyond their grasp.

[jorvi]

Because they need another golden geese. The iPhone alone accounts for 70%+ of their earnings, and the smartphone market is pretty much saturated and almost completely matured. What do you think investors will start to do once iPhone sales start slumping, and Apple has no 'next big thing' lined up for a growing market?

[srtjstjsj]

I still can't buy an iPhone 3 quality phone (+ camera!) for $200. Until I can, the smartphone market isn't saturated and Apple will keep printing money on new iterations of their devices, which tend to phy sically break down in <4 years.

[valuearb]

Who cares what investors will do?

I guarantee if iPhone sales plateau every shareholder who dumps their share will be replaced by a new shareholder. Value investors love nothing more than predictable cash generating businesses with low capital requirements.

No tree can grow to heaven and the growth potential for the most profitable business on earth is equally limited. There are investors for zero profit growth "stories" and investors for proven businesses with tremendous moats.

[pg314]

Warren Buffet seems to agree: Berkshire Hathaway built a $18B position in Apple recently. And I'm pretty sure that he would love nothing more than for Apple's stock price to go down in the short run, so that buybacks increase his percentage of the company even more.

[mars4rp]

Or they could just buy Tesla, but it is so overpriced.

[throwaway55523]

Expensive for the business, yes, but it would be worth it for Apple to acquire a new visionary CEO.

Of course it won't and can't happen, but one can dream.

[valuearb]

You can't acquire Elon Musk. First, he's not going to be happy losing his independence. Second, to buy Tesla you can't just pay todays absurdly high price, you have to pay so much higher to convince virtually all of the non-Musk shareholders to vote for your offer.

And if you "win" that auction, Elon will probably just devote even more of his time and energy to SpaceX.

[srtjstjsj]

Apple "acquired" Jobs from NEXT. they can do it again with Musk

[valuearb]

Apple never "acquired" Jobs.

Jobs asked Apple to buy NeXT. When they did, he explicitly refused to return as an employee. He only changed his mind laster because they were such a mess and he had an emotional commitment to Apples success, because he founded them. And at the time, he only had one other major interest, Pixar, and it was mostly run by the Pixar folks, Jobs wasn't writing or directing movies or developing animation technology for them.

Purchasing Tesla is almost certainly a hostile takeover at an insane price tag. Elon Musk has no need of money or to sell the business, his highest priority is to be able to run it without being told what to do by anyone else. Elon Musk has no emotional connection to Apple, but has a huge one to SpaceX, which he is super actively involved in all strategic planning.

Tesla would be a terrible acquisition and there isn't enough money in the world to convince Elon to let Tim Cook be his boss, and to spend his time designing phones and computers instead of rockets and electric cars.

If Apple won the takeover bid, Elon would cash out his shares and pour the money into SpaceX and new businesses, and tell Apple to kiss his ass.

[zepto]

Wrong - Jobs reacquired Apple with NeXT.