What's Up With Apple: More Apple Car, More Facebook Spat, More Chips

Apple Inc. (NASDAQ: AAPL) reportedly is continuing its search for an automaker willing to partner with the world’s most valuable company to build an Apple Car. Japan’s Nissan is said to be the latest carmaker to decline an offer that, on its face, seems like one an automaker couldn’t refuse.

The catch might be that building cars is capital intensive and Apple does not want to go into that business. It would rather team up with an automaker that already knows how to put sheet metal together, with Apple supplying the electronics and drive train for a fully autonomous electric vehicle. Nissan apparently balked at having to become the silent partner, in much the same way that Taiwan Semiconductor (TSMC) produces the chips Apple uses in its iPhones.

That diminishes Nissan’s brand. Agence France Presse cited a source close to Nissan who encapsulated the issue: “When you make a product under the Apple brand, you give your soul — and your profit margins — to Apple. We are not interested in giving Apple the best that we offer. This should be under the Nissan brand.”

In a similar vein, Volkswagen CEO Herbert Diess told Reuters on Monday that VW is “not afraid” of an Apple Car: “The car industry is not a typical tech-sector that you could take over at a single stroke. Apple will not manage that overnight.” It also appears that the auto industry is unlikely to let Apple in for cheap.

Over the weekend, the Wall Street Journal published a story on the “Clash of the Tech Titans” (Apple and Facebook) over Apple’s coming iPhone privacy feature. The story begins with an anecdote from 2018 that ended up with Facebook CEO Mark Zuckerberg telling his management team, “We need to inflict pain [on Apple].”

That’s easier said than done, but Facebook does have a good-sized stick. All its services are free, in exchange for people’s willingness to give up information about themselves. If Facebook is unable to monetize its users’ data, then it will have to charge something for its apps. The threat to Apple is that people will want Facebook enough to buy a smartphone from someone else.

Say, Samsung, which uses the Android operating system from Alphabet’s Google. Because Alphabet also monetizes user data in order to provide free services, there’s not much question about which side the search giant will come down on. Which tech giant has the more loyal customer base, Apple or Facebook? Which will be the winner in a competition to get regulation that favors its own business at the expense of the other’s? Stay tuned.

Finally, last week tech industry research firm Gartner issued a preliminary ranking of the top 10 customers for semiconductors. Apple was the top buyer of semiconductors last year, spending some $53.6 billion, a year-over-year increase of 24% and nearly 12% of a global market for chips that totaled nearly $450 billion.

2020 Rank 2019 Rank Company 2020 Revenue ($) 2020 Market Share (%) 2019 Revenue ($) Y/Y Growth (%)
1 1 Apple 53,616 11.9 43,239 24
2 2 Samsung 36,416 8.1 30,247 20.4
3 3 Huawei 19,086 4.2 24,933 −23.5
4 4 Lenovo 18,555 4.1 16,773 10.6
5 5 Dell 16,581 3.7 15,584 6.4
6 6 BBK 13,393 3.0 11,653 14.9
7 7 HP Inc. 10,992 2.4 10,729 2.4
8 8 Xiaomi 8,790 2.0 6,974 26
9 9 Foxconn 5,730 1.3 5,816 −1.5
10 10 HP Enter. 5,570 1.2 5,561 0.2
Others 261,109 58 247,640 5.4
Total 449,838 100 419,148 7.3

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