Categories Analysis, Markets, Technology

An Apple-Tesla merger could be the shortest route to an iCar

For long, the concept of an Apple car, or iCar, have remained mostly under the covers. But a recent prediction by an analyst has brought the limelight back to the much-awaited product. Ming-Chi Kuo of TF International Securities has said the iCar would reach the markets between 2023 and 2025.

He has also added that Apple’s (AAPL) foray into the automobile industry and augmented reality would help it attain a market cap of $2 trillion. Many market watchers believe that Apple acquiring Tesla (TSLA) could be the shortest route to achieving these targets.

Tesla earnings conference call Q3

In its outrageous predictions for 2019, Saxo Bank said Apple may acquire Tesla next year at $520 a share, which is roughly $200 above the current trading price. The Danish investment bank predicts Tesla would be valued at $90 billion at the time of the deal.

The merger makes sense and it offers a win-win situation for both the companies. While Apple can offer the financial assistance that Tesla badly needs to improve productivity and efficiency, the Elon Musk-led firm could give the iPhone maker a leeway into the automobile industry.

Apple’s interest in the auto industry is no secret in the tech circles as the company holds more permits to operate autonomous cars in California than any other company, including Uber.

Since the launch of iPhone in 2007, Apple is yet to come up with a pathbreaking product. Though it has launched numerous innovative products since then, nothing has gained the cult status enjoyed by the iPhone. An Apple car, meanwhile, offers all the ingredients for the next breakthrough product.

But why should Apple acquire a financially-crippled Tesla and not another global automaker?

‘Model 3 killers’ coming from all sides, yet the Tesla EV may emerge unscathed

The simple answer is – because Tesla is the leader in the electric vehicle market. None of the other automakers offer the kind of digitally advanced vehicles that Tesla does. Add to that its wide network of charging stations and market-leading energy storage capabilities.

Tesla is also miles ahead of other automakers in artificial intelligence, which is bound to have widespread applications in the auto industry with the introduction of  5G next year.

It’s a match made in heaven.


We’re on Flipboard! Follow us to receive the latest stock market, earnings and financial news at your fingertips

Most Popular

Does Unity Software (U) stock has more room to run?

Last month, the IPO market was in a full swing. IPOs of Snowflake (NYSE: SNOW) and JFROG (NASDAQ: FROG) had an impressive opening day in September, the former creating a

PepsiCo (PEP): Steady snacking habits amid pandemic drive strong quarter for beverage giant

PepsiCo Inc. (NASDAQ: PEP) beat market expectations on both revenue and earnings for the third quarter of 2020. The company saw the momentum continue in its snacks business while the

Does the virus-driven boom make Electronic Arts (EA) a good investment?

With more and more people turning to virtual entertainment sources, amid the virus-related movement restrictions, video game publishers like Electronic Arts (NASDAQ: EA) are witnessing unusually high demand. Not surprisingly,

Leave a Reply

Your email address will not be published. Required fields are marked *

Add Comment

Viewing Highlight