The Disruptor: Apple Is Spending More Money On Auto R&D Than The Top 14 Automakers Combined

When I read the linked article, I see a mishmash of unrelated items, and misunderstanding by the writer:

Re: “…Don't expect Apple's $1 billion investment in Chinese ride-hailing startup Didi to be its last…” – This is a capital investment (asset) in a SOFTWARE firm, sort of like buying an Uber, and likely to get access to a segment of the Chinese market for future iPhone sales. It is also NOT an R&D (Research and Development) expense.

Re: “…[Apple is] also burning more cash than the top 14 automakers combined, and that's an industry deep in transformation…” – That’s because Apple has cash reserved in the hundreds of billions of dollars, and automakers don’t, so of course when Apple spends any part of this mountain of cash, it’ll be “burning through cash” (huge volume, but tiny percentage of the whole), and it has NOTHING to do with the auto industry. It’s just Apple spending some of its cash. Oh, BTW, they’re building a huge multi-billion dollar campus in Cupertino, so that explains part of their cash burn.

Re: “…While Apple has spent $5 billion on additional research and development from 2013 to 2015, the major automakers spent only $192 million…” – I’d like to see the real numbers behind these statements. They sound fishy, and wildly out of line.

Re: “…Huberty believes shared mobility has been the main driver of Apple's increased spending…” – If you view mobile phones, like the iPhone, as “mobility”, then yes, that’s Apple’s bread and butter. iPhone sales have been lagging, as has the high end of the entire smart phone market, where Apple’s iPhone and iPad live exclusively. Of course they’ll spend there to try to make their products more desirable, and to increase market share.

Re: “…Apple's recent investment in Didi Chuxing signals an interest in shared rather than owned vehicles…” – Or in more plain English, it signals Apple’s ongoing interest in iPhone software and iPhone sales, rather than in the automotive sector specifically.

Re: “…With Apple outspending the major auto OEMs on this opportunity…” – Yes, this specific opportunity, the purchase of a Chinese Uber company. Keep in mind this is NOT an R&D expense. Also keep in mind that the major automatically OEMs are not in the software business, such as buying and running an Uber-like company, so making the comparison between Apple’s purchase and major automakers in this way is a moot point.

#clickbait

Yup. And a severely disjointed, assuming, and misguided linked article, to boot.