The iPhone has about four more evolutions before it hits what I have called a finite electronic product maturity phase. It is a phase where changes become exceedingly marginal with the implications that customers do not notice much differences from the previous versions of the same products. Whenever that happens, margins fall on the products.

For the iPhone, that will happen before 2026. So, if Apple hopes to sustain its valuation, it needs to find another engine of growth. For all products and services in the world now, Electric Vehicles with autonomous capabilities would make sense for the technology giant to pursue.

The electric vehicle wars are revving up. Apple is nearing a deal with Hyundai-Kia to produce an autonomous EV in the U.S., CNBC reports, citing anonymous sources. The “Apple Car” could go into production in 2024 and the sources add the tech giant tapped Hyundai because it wishes to collaborate with an “established automaker willing to allow Apple to control the software and hardware that will go into the vehicle.” The announcement comes on the heels of Ford and Google revealing a six-year plan for enhancing Ford’s in-vehicle connectivity.

Apple is not playing in the cloud computing space; Amazon and Microsoft dominate that sector which will become increasingly vital for the future of commerce. The cloud business has a lot of growth ahead of it. But Apple is not there. Looking generally, there is nothing else that can bring a generation-shaping redesign like the one smartphones offered to tech companies, if you remove cloud computing and EV autonomous opportunities.

The astronomical valuation of Tesla is based on this thesis that a shift is about to take place, from fossil-fueled cars, to EV cars with autonomous capabilities, and Tesla is positioned to lead therein. It is that perception that has fueled the surge. If Apple gets into this car, it has a promise. From iPod (Walkman-inspired) to iPhone (Blackberry-inspired) to Apple Watch (pebble-inspired), Apple is not used to starting any category but has a clear record of leading or co-leading once it gets in.

The decision for Apple to pursue an EV future is not a choice: it is the only option because the iPhone cannot carry it forever. Sure, Apple has the iPhone – an exclusive hardware on a proprietary software – but that does not mean it cannot lose margins as the smartphone industry matures. That is why I do think that Apple will pursue an electric car with autonomous capabilities to secure its long-term future. That call will become more evident in the next coming quarters. And as that happens, there would be a signal call to Tesla: be ready.

Expect iCar to be a hit because it will come from Apple with world-class engineering. Tesla space could be secured as there is a clear possibility to have 4 big brands in the EV autonomous space. So, the rise of Apple will not mean the fall of Tesla.

LinkedIn Comment on Feed

Comment: “Looking generally, there is nothing else that can bring a generation-shaping redesign like the one smartphones offered to tech companies, if you remove cloud computing and EV autonomous opportunities.” – Ndubuisi

The quote above could be self-limiting, because we do not really know what another decade holds, even with all our predictions and supposed intelligence. Just one event called Covid-19 and look at what our world has turned into. Have three or four Covid-like high impact events, and everything we hold high today could be upended, with entirely new sectors taking centre stage.

On Apple and sustainability of iPhone, well, there’s more to iPhone than a mere smartphone; as long as Appstore remains exclusive to only Apple users, do not expect iPhone to lose significant power in market valuation, until something better comes around; not just about reaching the finite state in electronics.

If Apple manages to come with good EV products, it will still shake up Tesla, because the richest people are on Apple platform, and once it fuses the car with its Store, alongside iPhone and everything Apple; no other brand comes close.

It’s Apple, the master of storytelling, if it clicks, it must resonate.

My Response: “The quote above could be self-limiting, because we do not really know what another decade holds, even with all our predictions and supposed intelligence” – if we wait to know everything, we cannot write. So, based on all that we know, we make calls knowing that the future has not arrived.

“not just about reaching the finite state in electronics. ” – your laptop has reached a finite state even though you have software in it. Windows from Microsoft has reached a stable state that most things are marginal. Apple will get there when the innovations on the services, powered by software become marginal and incremental. It has really nothing to do with the hardware as if you are looking for designs, iPhone hardware is not the winner. So, the electronic is a composition of hardware+software.

I still think Apple, Tesla and 2 others can co-habit as that market typically has 3-4 big brands. I do not think Apple will win it all because no market has one clear dominant car brand. But we will see.

Join me live at hub.tekedia.com as I webcast what to expect at Tekedia Mini-MBA which begins on Monday.

• Time:   4.30-4.50pm WAT

• Date:  Feb 5

• Venue: Tekedia Hub

• Link: hub.tekedia.com

Ant Group Co. and Chinese regulators have agreed on a restructuring plan that will turn Jack Ma’s fintech giant into a financial holding company, making it subject to capital requirements similar to those for banks, Bloomberg reported.

The plan calls for putting all of Ant’s businesses into the holding company, including its technology offerings in areas such as blockchain and food delivery, people familiar with the matter said. One of Ant’s early proposals to regulators had envisioned putting only financial operations into the new structure.

An official announcement on the overhaul could come before the start of China’s Lunar New Year holiday next week, the people said, asking not to be identified discussing private information. Alibaba Group Holding Ltd., which owns about a third of Ant, erased losses in Hong Kong trading on Wednesday after Bloomberg reported the agreement. Alibaba rose 3.5% in New York.

Some market participants had been speculating Ant might be forced to spin off portions of its business, which now looks unlikely, said Shujin Chen, Hong Kong-based head of China financial research at Jefferies Financial Group Inc.

Ant’s restructuring plan marks the first big step in what’s expected to be a lengthy overhaul process, as regulators draw up detailed capital requirements and other guidelines for companies that span multiple financial business lines.

China only introduced its framework for financial holding companies in September and many of the specifics are still being ironed out. While the rules will eventually provide more regulatory clarity for Ant, they’ll almost certainly force the company to slow the torrid pace of expansion that has made it China’s dominant fintech player and one of the world’s most valuable startups.

Ant is still exploring possibilities to revive its initial public offering, which was abruptly halted by regulators in November, one person familiar with the matter said. But given the financial holding company framework is so new, it’s unclear how long it might take for authorities to sign off on a listing.

Francis Chan, a Bloomberg Intelligence analyst in Hong Kong said in December that Ant’s valuation could plunge below $153 billion as a result of the changes it will undergo as a holding company. The company was above $300 billion in November, before its IPO was halted.

As part of the overhaul plans, Ant and at least a dozen banks are paring back their years-long cooperation on consumer lending platforms that fuel the spending of at least 500 million people in China.

Ant declined to comment. The People’s Bank of China, which oversees financial holding companies, didn’t immediately respond to a faxed request for comment by Bloomberg.

Ant’s restructuring is part of a broader government campaign to increase supervision of the financial and technology sectors. Regulators have in recent months targeted everything from health-care crowdfunding to consumer lending. In January, they proposed measures to curb market concentration in online payments, where Ant and Tencent Holdings Ltd. are the biggest players.

Ant made the move to restructure into a holding company as a way to calm nerves in the faceoff between the company and Chinese authorities. Under the financial holding company structure, Ant’s businesses would likely be subject to more capital restrictions, potentially limiting its ability to lend more and expand at the pace of the last few years.

The agreement means that China has succeeded in its attempt to control the online financial sector. With Ant going holdco to ensure cooperation with the Chinese regulatory authorities, more moves are expected from the government in the near future to curb other sectors of its economy with unauthorized measures of freedom.

The news of a possible solution has softened the faces of wary investors who were caught in the Chinese power play. However, it is not clear what this will mean for Ant’s valuation and IPO. Chan estimates now that the valuation could drop below $108 billion.

This is one of our new courses in Tekedia Institute. In a time when most regions in the world are under severe physical security paralyses, I do think it makes sense for business leaders and professionals to pause and understand the physical risk elements, and how to manage them.

Yes,  we have the computer risk (cybersecurity). We have the finance one (accounting, auditing, etc). But most times, business schools leave the human ones. We think that is a big miss. If thugs can attack American senators which if not that it was in America, CNN would have reported the meltdown as a “coup”.

In Nigeria today, even the soldiers have dropped their cars, preferring trains between Abuja and Kaduna route. Simply, physical security has assumed a bigger dimension and we need to understand the nexus from experts!

In Week 12 of our program,  Henry Mgbemena, Global Security Adviser of World Vision International, will teach a course on Physical Security Risk Management. When insecurity has been scaled in the land, what are the strategic options and what should you do?

Register here as we start on Monday, Feb 8.