The most recent indicator is Kia motors stock. Shares in the South Korean automaker jumped 10% after a Korean newspaper said that Apple [$AAPL] will choose it as its partner for the iCar. The report asserts that Apple will invest $3.6 billion in Kia. Kia’s market cap is roughly $36 billion, so that would equate to a 10% stake.
This type of hypothesis isn’t new, as the same whispers surfaced a few weeks back surrounding Hyundai Motors. Shares lifted almost 20% on January 8 after reports that Apple would pick it as its partner for a coming iCar. Make no mistake, Hyundai and Kia are oftentimes thought of as the same company. Sales of the two are occasionally combined when listing the world’s largest automakers. And get this, Hyundai owns 34% of Kia stock.
Apple has flirted with the auto market for a while now. Reports of a car program known as Project Titan go back to 2013. More recent reports popped up in December. The dichotomy between Titan and the new reports is that cars are rapidly becoming software-enabled devices—like phones. Musk’s Tesla [$TSLA] products are the most glaring examples. Tesla enhances its entertainment, battery-management, and autonomous driving solutions while cars are parked in consumers’ driveways. Bezos To Step Down After Dominating The Pandy
The December bet led to several research reports from technology and automotive analysts. Most of the reports are kind of bizarre, considering what could happen. That’s as good as the Street can do, since all companies involved are keeping all details in-house. Real MVP: Uber Embraces Our Inner Degenerate & Buys An Alcohol Delivery Service
The consensus view on Wall Street is that the auto market is attractive to Apple because, well, it’s yuge. Car sales top $2 trillion a year easily, and analysts predict Apple won’t build a car on its own. It will pick a partner to do so. Apple, instead, will choose to zero in on autonomous-driving software and the overall driver experience.
Analysts might be proven right. An Apple car means more competition for existing shops. It also means some existing car markers will win or lose depending on who Apple picks. Still, it’s all theoretical for now.