Apple & Rivian Reportedly in Partnership Talks

[jeeden]

As somebody who has been in corporate finance over 20 years I think Rivian's way forward will be interesting to watch. The corporate/stock structure essentially gives RJ complete control of Rivian. He owns 100 percent of a second class of stock. In order for the company to sell or change management a majority of all stock classes must approve. You can get a company off the ground that way, but you won't succeed (IMO) getting much needed capital infused keeping it that way. Probably why partnership is being discussed and not any sort of ownership. This is also why those expecting Amazon to come in and save the day will be wrong (unless changes are made). Nobody is going to put substantial money into a ship taking on water with no real way to hold management accountable. I love Rivian, but so far RJ has been better at firing CFOs and COOs than has been at looking in the mirror for the problem. WAY to much capital spending too soon. Supposedly first CFO told him that and got shown the door.

Well, I'm not sure I agree with that. Look at the Zuck and any number of other tech companies where they have dual class shareholders and therefore no accountability or leverage over them. Of course that is a different industry than auto.

Again, I think everyone is overlooking that Apple doesn't want to be in the car business and that is why they killed their program. On their scale of profit, there is no money in it. It is a capital intensive, manufacturing intensive, thankless, low profit, high drama, long lead time, slow, and just overall awful business. Everyone is acting like Apple is envious of the auto industry and they aren't. The auto industry is "small" at around $600B market cap. If they spun airpods off from Apple it would immediately be its own fortune 100 company at a market cap of $100B. The app store is about $150B market cap (for Apple) and the margins on these businesses are incredibly high. Apple worked on developing a car because they were bored and thought they would look into it and after years someone said this business sucks, even if we hit it out of the park it is going to be all the problems in the world for a couple of bucks of profit.

I stick by my call that it is a partnership on infotainment for Apple TV or something, but I do like the mention above about the AI/self driving or perhaps even carplay (although I'm an android person and I think google maps is superior than Apple maps).

Sponsored

 

[Supratachophobia]

Whoa whoa whoa, hear me out....

Rivian....

buys....



Apple!

 

[rbrak29]

Didn’t Apple show off a Car Play, system wide UI for the auto industry a few years ago? Just spitballing.

 

[electruck]

We have reasonably high confidence that Rivian has long been collaborating on something with Apple as Wassym has played the NDA card in response to questions at several public events now. This is most likely related to software and could include Apple Watch integration. But the "partnership" rumor seemed to originate from "suppliers" which suggests hardware of some sort. Perhaps Rivian will start to utilize Apple silicon as developed for the now shuttered project Titan? Rivian would gain premium, power efficient compute and Apple would recoup some of their development costs. That's my guess fwiw.

 

[gregtay]

Why would Apple take on the liability of Rivian (or any car company). Apple is in high profit businesses. with services being on the top of that list. They can already get this revenue from vehicles via Carplay and their other integrations. They are in the absolute best position... auto manufacturers drive the difficult low profit business, and Apple simply collects the subscription/app revenue that every car company dreamed of. Buying Rivian doesn't yield anything to Apple other than a huge liability.

 

[Freddie]

Apple is announcing new iPads. That's the event.
OLED screens M4 chips.

Bingo! https://finance.yahoo.com/news/appl...any-looks-to-turn-around-sales-144325652.html

 

[Redline]

 

[HeresRonnie]

The Apple buying Rivian thing has been thrown around for almost a couple years now. It intensified more recently in the past year but I don’t think this is it. It’s likely going to be Apple Music and Apple TV coming to rivian which I am stoked about because I love both. Apple Music is far superior to Spotify, this is a win. Wouldn’t be a bad thing is Apple Maps were used in the vehicles either…

Not to be a downer but I think the only way someone buys Rivian is for real cheap. I think if Rivian gets on life support like a Fisker situation it’s more attractive but why would a company pay more when they can get Rivian for less when they are down and out?

 

[virgnia_rivian]

Why would Apple take on the liability of Rivian (or any car company). Apple is in high profit businesses. with services being on the top of that list. They can already get this revenue from vehicles via Carplay and their other integrations. They are in the absolute best position... auto manufacturers drive the difficult low profit business, and Apple simply collects the subscription/app revenue that every car company dreamed of. Buying Rivian doesn't yield anything to Apple other than a huge liability.

Services are not at the top of Apple's revenue.
81% of Apple's revenue is generated by products. 19% services.
Combined margin of 46%, which is why Apple prints money.

Source: https://www.apple.com/newsroom/2024/02/apple-reports-first-quarter-results/

What Apple does do is partner with companies that it likes when there's a synergy to put their products/services to use. I could see some sort of partnership with Rivian.

 

[Cycliste]

wait a minute. Both company will hold a significant event today

@Supratachophobia has nailed it

That makes a lot of sense

 

[UnsungZero_OldTimeAdMan]

Good grief people. Talk about seeing what you wish to see instead of the most logical speculation that can be supported by actual evidence. This is more likely about audio and video streaming. Recall the change in recent replies on question regarding status of streaming: from "soon" to "exciting update for you all in the near future" and "we're in final steps of [video streaming] integration... it's coming later this year". It can also be about additional functionality Wassym spoke of, during San Jose event, relating to Apple Watch. https://www.rivianforums.com/forum/...a-with-head-of-software-wassym-bensaid.26718/

It's nonsense to speculate Apple's purchase of Rivian. Amazon owns a sizable stake in Rivian (reportedly over 20%). Amazon competes with Apple on many fronts. That level of involvement/ownership would be a conflict of sorts. Rivian's infotainment system is a media delivery platform; just like how your Amazon Fire TV can stream Hulu, HBO, Apple TV, Showtime, Paramount+, Amazon Prime Video, etc.. If Apple were to buy Rivian, you can bet your rear end that Amazon would be involved in those talks too. Yet, not at all mentioned in this rumor.

Apple's interest is no longer in cars. What did they pivot to? and what did the remaining Titan employees get shifted to? AI, the one thing everyone in tech is pivoting to. AI is a much bigger profit opportunity. It has potential of being in everything (shudder), beyond wheeled mobility.

 

[Rividiculous]

If Apple buys Rivian, Tesla shareholders should be worried. Rivian would suddenly have everything Tesla has—except for a bonkers CEO.

It only works if RJ and Tim are truly simpatico, but if they are, watch out.

 

[evguy]

I think it's far more likely to be about the 10 years Apple spent working on AI/self driving than anything to do with entertainment. Agree a partnership makes more sense then a purchase.

Agreed. Maybe Apple supplies cash to get GA plant up and running in exchange for long term software/AI partnership? Still seems unlikely, but a guy can dream...

 

[Tim-in-CA]

Whoa whoa whoa, hear me out....

Rivian....

buys....



Apple!

Whoa! Ease off the Bailey’s in your morning coffee!

 

[LetsgoRIVN]

Well the market says this rumour is not worth a buy. NEXT!

Sponsored