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[LUXURY BRANDS] APPLE ANNOUNCES “THE APPLE CAR” BUT DO YOU FEEL ITS OVER-EXTENDING ITS BRAND? READ MORE:

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Barely few days after German automaker ‘Volkswagen’ failed a diesel emission test in the USA, silicon valley Apple inc. has announced “The Titan” a lithium powered, self driving car that may pose competition to Tesla and UBS.

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  In a note to clients two days ago UBS
analyst Steven Milunovich acknowledged a number of compelling reasons for apple to enter the car business, ranging from the need for “large consumer markets to fuel growth” given Apple’s size, to the opportuned timing of joining the industry at a moment of electric cars, autonoumus and hybrid car disruption. But following the apple watch maker’s mammoth loss on the wearables department, would anyone share the upbeat view on Apple
trying to throw its weight around in the auto business?
  TheBrandradio blog took a pulse sweep around the web to review what tech giants, stakeholders and business analysts are saying. Read more:

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Forbes: (Steven Schaeffer reported) For years,  the   breathless   speculation around Apple was whether or not the
company would start producing televisions, especially after biographer Walter Isaacson quoted the late Steve Jobs saying he had ‘finally cracked it.’ But these days the buzz is skipping right over the living room and moving out to the driveway, with the possible Apple car project piquing the public’s
interest. The discussion around Apple’s automobile ambitions got a push forward this week when the Wall Street Journal reported the company is
tripling the 600 people working on the project— codename ‘Titan’ — and targeting 2019 shipping date.

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One thing that seems clear: a car project would soak up some of Apple’s massive cash flow. At the end of the second quarter,Apple’s cash pile stood at a record $202.8 billion.
  Billionaire Carl Icahn is sure to be pleased by.the reported progress of Apple’s car aspirations. In a May missive to CEO Tim Cook, Icahn spent more than 400 words extolling the
virtues of the car opportunity. “At $1.6 trillion, the enormous addressable
market for new cars is approximately four times the size of the smartphone market,” Icahn wrote. “We believe the rumors that Apple will introduce an Apple-branded car by 2020, and we believe it is no coincidence that
many believe visibility on autonomous driving will gain material traction by then.” But Milunovich warns that there are just as compelling reasons to be wary though it remains in the early innings, the potential opportunity in autos is an intriguing one for Apple investors mindful of the company’s reliance on the iPhone as its main
profit powerhouse. From an investment perspective, any potential impact from the auto effort is likely years
away from impacting Apple’s equity reserves, however, getting into the auto business doesn’t necessarily guarantee a re-rating of Apple’s stock; automakers hardly enjoy lofty multiples. General Motors fetches less than 7 times forward earnings, Ford Motor 8 times and Toyota Motor 9 times. Of course, those aren’t the companies Apple will be competing with and comparing itself to in the car business going by the fact that apple still remains cheap on a price to forward earnings basis which is just less than 9 times after stripping out its $200 billion-plus in cash.
  Apple jumping into the automobile business might seem farfetched but the way it wholeheartedly grasped the
MP3 player, smartphone and tablet markets might also have seemed ‘far out’ too to industry observers but be it as it may only time will tell.
Apple had hired senior executive engineer James Carlson to join its 600 man team.

Drop us a comment on what you feel about apple going into the auto biz.

Compiled, edited by: @djshyluckjimmy
facebook/instagram: jimmyadesanya.

Posted by: thebrandradioblog.

Credits: forbes.

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