Apple (AAPL, Financial) has outperformed the S&P 500 and the Nasdaq recently, rising 27% year to date compared to 7.66% and 15.34%, respectively. This is all a result of Apple's continued strong growth strategies, and I believe three main catalysts exist now that can add yet more value to Apple’s shareholders.
Apple's mission statement is “to bring the best user experience to customers through innovative hardware, software, and services," and it also aims "to make the best products on earth and to leave the world better than we found it.” This focus on quality and the customer has led the company to success in its growth endeavors time and again, which is why I have faith in its future growth projects as well.
Apple Pay Later and high-yield savings accounts can add incremental revenue
Apple Pay Later is a new payment service offered by Apple that allows users to make purchases using a deferred payment plan. With Apple Pay Later, users can split a purchase into four interest-free payments over time or choose to make one payment after 30 days. To use Apple Pay Later, users must have a compatible Apple device with the latest version of iOS or iPadOS and have an eligible credit card on file with Apple Pay, which entices customers for cross-selling opportunities.
Further expanding its growth efforts in financial services, Apple has launched a high-yield savings account that offers U.S. customers a 4.15% interest rate, which is 10 times the national average. The deposits will sit with Goldman Sachs (GS, Financial).
Although these services are now available only in the United States, it is not unlikely for Apple to expand these services overseas. With over 1 billion users worldwide, this is huge news to keep an eye on.
Apple is focusing on growth in India
Apple has been making efforts to expand its presence in India, one of the world's largest smartphone markets. India has a large and growing middle class with significant purchasing power, making it an attractive market for Apple.
In recent years, Apple has been taking several steps to increase its foothold in India. In 2020, the company launched its online store in India, allowing customers to purchase Apple products directly from Apple's website.
Apple has also been increasing its manufacturing presence in India, with several of its key suppliers setting up manufacturing facilities in the country. This move allows Apple to benefit from lower labor costs and local tax incentives, while also meeting the Indian government's requirements for local sourcing of components.
In addition to these initiatives, Apple has been working to expand its retail presence in India, with plans to open its first physical stores in the country shortly. The company has reportedly been in talks with landlords in several major Indian cities, including Mumbai and Bangalore, about potential retail locations.
Overall, Apple's entry into the Indian market represents a significant opportunity for the company to tap into a large and growing customer base, while also expanding its manufacturing and supply chain capabilities.
Apple could be entering the automotive business soon
Apple has been rumored to be working on a self-driving electric car project for several years, with various rumors suggesting that the project, code-named "Project Titan," has been in development since 2014.
While Apple has not officially confirmed its plans to enter the automotive business, the company has developed ad-on technologies for cars in the form of the Apple Car Play interface. In recent years, Apple has also reportedly hired several automotive industry experts and engineers, acquired several companies specializing in self-driving technology and car-related software and been granted numerous patents related to vehicle technology, so I think it's safe to say there's plenty to back up the rumor mill on this one.
In addition, in late 2020, Apple was in talks with several automotive manufacturers about potentially partnering to produce an electric car. After all, exposing its shareholders to the risk of manufacturing goods itself is not Apple's style. However, these talks reportedly stalled, and it remains unclear whether Apple will ultimately enter the car business on its own or through a partnership.
If Apple does decide to enter the car business, it could represent a significant shift in the automotive industry, given Apple's reputation for innovation and design. However, the automotive industry is highly competitive and capital-intensive, and success in the space would likely require significant investment and a long-term commitment to the project.
Aside from a partnership, Apple could also go the route of acquiring an automotive company. It certainly has enough cash to do so, but what acquisition would make sense? According to Barron's columnist Al Root, a good candidate could be Visteon Corp. (VC, Financial), though investors should note that this is all complete speculation and Apple has made no indications that it plans to acquire this particular company.
Visteon is an American global automotive electronics supplier that designs, engineers and manufactures a wide range of components and systems for vehicle manufacturers worldwide. The company provides products and services that focus on three main areas: cockpit electronics, thermal management and electric vehicle solutions.
Apple has a lot of cash to invest in growth, with $48.3 billion on its balance sheet as of the end of 2022. The tech company could easily swallow up a small-cap like Visteon with its market cap of $4.22 billion, or another small-time automotive company that could help it get into the car business.
