Gene Munster: Apple should buy Rivian after cancelling Apple Car

Posted:
in Future Apple Hardware edited February 29

Loop Ventures analyst Gene Munster says Apple has to make a big move after cancelling the Apple Car, and that buying Rivian would be the answer.

Rivian R1T
Rivian R1T



Following the apparent cancellation of its Apple Car project, Munster has told CNBC that he was surprised by the move. "Because Apple is working on something doesn't mean it will see the light of day," he said, but argued that Apple will now need something big to replace it, if the company is to continue to grow.

"Apple's a tech company, and tech companies by definition need to grow," he said, "and that's the $400 billion question that they have."

"That's their revenue this year, and to grow a top line, they haven't grown their top line for the last six quarters," he continued. "And to grow the business, you gotta get into some big markets."

"Vision Pro has some potential, but that was kind of the shiny opportunity related to the car," said Munster. "[If Apple made a car then] if they get 10% of the automotive market, that would grow their top line by 60%."

Asked by CNBC host Brian Sullivan whether Apple might instead buy an existing EV manufacturer, Munster said that buying Rivian is "doable."

"And I think it does line up, Apple could do this, and I think that that would get them into that bigger market," he said. "I'm disappointed that this turn in events, and so I don't want to be predicting that they're going to ultimately do something like this."

"But I do think Apple needs to break into some new market," he continued, "they need to do something big, and potentially Rivian would be just the answer to that."

Separately, an Apple executive who reportedly helped start the Apple Car project, DJ Novotney, moved to Rivian in January 2024.

Regarding the growth potential of Apple, Gene Munster and his Loop Ventures firm has repeatedly predicted that it will shortly hit a $3 trillion market capitalization -- in 2019, 2020, and 2021. Munster also predicted Apple Vision Pro, then believed to be called Apple Glasses, would launch in 2021.

In this CNBC interview, Munster also commented that he was "famously wrong for predicting Apple Television that got killed in 2017."



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Comments

  • Reply 1 of 27
    I think Fisker makes more sense as a candidate for Apple. And might be cheaper as well. Apple hardly ever buys fully matured companies. Fisker has a lot to win by it as their software is still weak (missing CarPlay for example ;-) 
    watto_cobra
  • Reply 2 of 27
    So called analysts thinking that Apple was building or should build a car is the dumbest thing ever! Totally outside their core competence, truly massive complexity and what is Apple going to bring the table that Tesla or others is not already, answer: nothing but a guaranteed expensive, unaffordable and unnecessary product. What they undoubtedly have been working on is some kind of CarOS and related technologies such as the next gen CarPlay. Munster is completely clueless.
    jimh2jeffharrisdewmewilliamhwilliamlondonlam92103ForumPostwatto_cobra
  • Reply 3 of 27
    williamhwilliamh Posts: 1,036member
    Flyer007b said:
    I think Fisker makes more sense as a candidate for Apple. And might be cheaper as well. Apple hardly ever buys fully matured companies. Fisker has a lot to win by it as their software is still weak (missing CarPlay for example ;-) 
    I agree about Fisker.  It's cheap and they have an excellent designer in Fisker who designed some beautiful cars for BMW and Aston Martin (and I think others.)  On the other hand, Apple has some association with Rivian through one of the early shows on Apple TV.  Rivian prototypes were used as the support vehicles for the travel show "Long Way Up."  It is a really nice show as are the earlier shows, Long Way Down and Long Way Round, also on Apple TV.  https://en.wikipedia.org/wiki/Long_Way_Up

    I don't think Apple needs to do a car at all and I don't think Apple thinks they need to do a car.  If Apple does sell a car, I don't think they have much chance of grabbing 10% of the market.  I'm sure I'd want one though.


    badmonkwatto_cobra
  • Reply 4 of 27
    Flyer007b said:
    I think Fisker makes more sense as a candidate for Apple. And might be cheaper as well. Apple hardly ever buys fully matured companies. Fisker has a lot to win by it as their software is still weak (missing CarPlay for example ;-) 
    Have to disagree with that.  Fisker has been getting some awful reviews of its car and its name recognition is close to nil.  I work right by one of their showrooms and there is almost no one inside most times.  Walk around the block to Tesla and it's always busy.  Walk down the corner and Rivian also has people always looking, same with Lucid a couple blocks away.

    Now I don't think Apple needs a car at all.  But Rivian has a built in base now of pick up owners, they have the contract with Amazon for their electric delivery vans which is a nice, built sales flow.   Rivian is also announcing a new vehicle this weekend.

    But beyond a car, Apple is right to make a huge push into AI (how about building a processor to challenge the Nvidia H100?) and they should also be looking into quantum computing.  
    williamlondonwatto_cobra
  • Reply 5 of 27
    jimh2jimh2 Posts: 638member
    Gene Munster is normally on target, but as for buying Rivian or Fisker he is straight up out of his mind. These companies both are bleeding massive amounts of money and have massive debt. Apple buying them would be an investor bailout and The near term EV market is not promising mainly due to cost and any car sold by Apple will be at the top tier. That and they will never be able to compete against Tesla once their entry level model car is available.

    One other note is that Apple getting into cars never made sense other than the CarPlay angle. Good businesses do not diversify into products that are outside of their primary focus. Apple makes phones, computers and related accessories. They also do streaming of music/videos/podcasts and create content. Manufacturing cars is does not even remotely fit into their business model.
    muthuk_vanalingamlam92103watto_cobra
  • Reply 6 of 27
    flydogflydog Posts: 1,129member
    jimh2 said:
     Good businesses do not diversify into products that are outside of their primary focus. Apple makes phones, computers and related accessories. They also do streaming of music/videos/podcasts and create content. Manufacturing cars is does not even remotely fit into their business model.
    Under your "primary focus" rule, Apple would never have branched out into music players, phones, watches, earphones, and portable speakers, which together make up over 90% of its current revenue from product compared to what as the "primary focus" prior to 2001 (computers).  Maybe you define "primary focus" broadly to include anything with a CPU in it, but that rules also fails because Apple derives 20% of all revenue from services that include producing their own TV shows and movies and selling ads. 




    edited February 28 williamlondonwatto_cobra
  • Reply 7 of 27
    omasouomasou Posts: 601member
    IMHO Apple never wanted to make a car. They wanted to develop the systems that run the car and/or use it as an AI development platform, e.g. computer vision, edge ai, etc.
    twolf2919dewmedanoxwilliamlondonwatto_cobra
  • Reply 8 of 27
    Flyer007b said:
    I think Fisker makes more sense as a candidate for Apple. And might be cheaper as well. Apple hardly ever buys fully matured companies. Fisker has a lot to win by it as their software is still weak (missing CarPlay for example ;-) 
    Literally everything you wrote in support of Fisker also holds for Rivian.  Although I think it very unlikely that Apple will buy any car company, Rivian would be a better fit for Apple for one simple reason: they have indicated, many times, they like to control/make all the critical components of of their products.  Fisker doesn't even make their own cars - they're produced by Magna-Steyr in Austria!  Rivian makes its own cars and has developed its own related technologies (e.g. the  motors that now drive  most of their newer vehicles).

    But Munster is not the smartest tool in the shed.  He just throws stuff onto a wall and hopes something sticks.  He previously forecast Apple will produce a TV for christ sake.
    watto_cobra
  • Reply 9 of 27

    omasou said:
    IMHO Apple never wanted to make a car. They wanted to develop the systems that run the car and/or use it as an AI development platform, e.g. computer vision, edge ai, etc.
    Precisely what I've been saying for years.  There has never been any statement by Apple regarding ambitions to make a whole car and there have never been any glimpses of prototypes (the only thing anyone ever observed is Lexus RX SUVs with LiDAR equipment on the roof).  It was always my opinion that Apple was going to extend their reach into cars via a, sort of, CarPlay 3.0.  The upcoming new CarPlay already gives manufacturers the option to let CarPlay control/visualize more of a vehicle's core functions.  It's easy to extrapolate a direction from that - e.g. give manufacturers an option for letting CarPlay provide self-driving capabilities.
    watto_cobra
  • Reply 10 of 27
    flydog said:
    jimh2 said:
     Good businesses do not diversify into products that are outside of their primary focus. Apple makes phones, computers and related accessories. They also do streaming of music/videos/podcasts and create content. Manufacturing cars is does not even remotely fit into their business model.
    Under your "primary focus" rule, Apple would never have branched out into music players, phones, watches, earphones, and portable speakers, which together make up over 90% of its current revenue from product compared to what as the "primary focus" prior to 2001 (computers).  Maybe you define "primary focus" broadly to include anything with a CPU in it, but that rules also fails because Apple derives 20% of all revenue from services that include producing their own TV shows and movies and selling ads. 
    The step from building computers to other electronic devices isn’t that great.

    An automobile is FAR outside the realm of personal electronics. 
    There are more than enough automobile manufacturers out there. 
    Partnering or selling technologies, such as CarPlay, is the way to go for an electronics giant like Apple.
    That’s a win-win for any company that partners with Apple.

    Trying break into a saturated vehicle market is not.
    dewmemuthuk_vanalingamwatto_cobra
  • Reply 11 of 27
    dewmedewme Posts: 5,471member
    Why would Apple want to adopt this? (Note: numbers in parentheses are negative)

     https://rivian.com/newsroom/article/rivian-releases-fourth-quarter-full-year-2023-financial-results

    Apple has never been in a position where it “must” build a vehicle to continue its growth. Not now and not for the foreseeable future. Apple should not be trying to “chase the money.” They should be chasing mastery and perfection in what they are very good at and build on success, not try to build on top of someone else’s failure. Until all of the kinks are worked out of the EV market and infrastructure, and they will eventually be, it’s a money pit.

    Oh, forgot to mention, Rivian just laid off 10% of its salaried workforce. 
    edited February 28 watto_cobragatorguy
  • Reply 12 of 27
    Gene Munster says Apple has to make a big move after cancelling the Apple Car.
    Really? Because he thinks this is a failure instead of a decision that the project wouldn't be in Apple's best interest after all? This is why people hate analysts.
    watto_cobra
  • Reply 13 of 27
    Apple is too smart and successful to buy Rivian. 

    Why in the world would they buy a money pit? 

    Rivian isn’t profitable and this move would equate apple bailing them out while gaining nothing other than a headache. 

    Apple buying Disney makes more sense. 
    macxpresswatto_cobra
  • Reply 14 of 27
    williamhwilliamh Posts: 1,036member
    twolf2919 said:

    Fisker doesn't even make their own cars - they're produced by Magna-Steyr in Austria!  Rivian makes its own cars and has developed its own related technologies (e.g. the  motors that now drive  most of their newer vehicles).
    If Apple would get into the car business, they are MUCH more likely to contract out assembly than to build themselves.  That's how pretty much all Apple stuff is produced.  If not all.  Do they still make the Mac Pro?  If Apple bought any car maker, it would be for designs and related know-how, and for the benefit of some vehicles that have already gone through all sort of certifications, etc.  The electronics would essentially all be thrown out for Apple to use what they bought as a "sled" like how Tesla got started buying the chassis from Lotus.

     Some of you guys make a convincing argument for why Apple's not considering any of this.  If they wanted to buy Rivian or Fisker, it would be cheap though and maybe kick start things.


    watto_cobra
  • Reply 15 of 27
    danoxdanox Posts: 3,041member
    Apple is too smart and successful to buy Rivian. 

    Why in the world would they buy a money pit? 

    Rivian isn’t profitable and this move would equate apple bailing them out while gaining nothing other than a headache. 

    Apple buying Disney makes more sense. 

    No it doesn't Disney is a money loser if Apple is bored build a Mac server, Apple Mesh router or a in house game engine Unity and Unreal are currently flaking out.....

    And finish that Apple Modem the future depends on it. Getting the Apple Vision into a pair of glasses requires it.
    edited February 28 watto_cobra
  • Reply 16 of 27
    XedXed Posts: 2,659member
    omasou said:
    IMHO Apple never wanted to make a car. They wanted to develop the systems that run the car and/or use it as an AI development platform, e.g. computer vision, edge ai, etc.
    I think there's a strong argument to be made there.
    williamlondonwatto_cobra
  • Reply 17 of 27
    tmaytmay Posts: 6,398member
    williamh said:
    twolf2919 said:

    Fisker doesn't even make their own cars - they're produced by Magna-Steyr in Austria!  Rivian makes its own cars and has developed its own related technologies (e.g. the  motors that now drive  most of their newer vehicles).
    If Apple would get into the car business, they are MUCH more likely to contract out assembly than to build themselves.  That's how pretty much all Apple stuff is produced.  If not all.  Do they still make the Mac Pro?  If Apple bought any car maker, it would be for designs and related know-how, and for the benefit of some vehicles that have already gone through all sort of certifications, etc.  The electronics would essentially all be thrown out for Apple to use what they bought as a "sled" like how Tesla got started buying the chassis from Lotus.

     Some of you guys make a convincing argument for why Apple's not considering any of this.  If they wanted to buy Rivian or Fisker, it would be cheap though and maybe kick start things.


    Canoo is a real innovator, in my opinion, and potentially more of a lifestyle vehicle, but sure, there are huge numbers of people whose lives revolve around 0-60 mph metrics...

    https://www.canoo.com/
    watto_cobra
  • Reply 18 of 27
    As an Apple shareholder all I can say is "thank god", this was going to be a millstone around their neck. Hopefully they can transfer what they learned into CarPlay.
    watto_cobra
  • Reply 19 of 27
    Amazon already has a substantial (~ 18%, iirc) investment in Rivian. Does Apple management really want to get into the same bed as the Smiley-face people, even as a majority owner?
    watto_cobra
  • Reply 20 of 27
    omasou said:
    IMHO Apple never wanted to make a car. They wanted to develop the systems that run the car and/or use it as an AI development platform, e.g. computer vision, edge ai, etc.
    The more time has gone on this feels like the correct take, the idea that billions were wasted on this venture seems short sighted as they have been building out CarPlay and such but who knows what tech has been developed for that venture that could be put to use such as better battery tech, Lidar, and AI seemed to be a very important part as the goal was self driving vehicles 

    if their goal was to enter the car market, I always thought acquiring a company like Lucid would have made sense as their 900 volt charging remains top notch, and the design cues seemed very inspired by Apple in the first place
    edited February 28 watto_cobrahmurchison
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