Hardware and software improvements were rolled out by Apple.
The company seems to be taking a soft approach to the Apple Car project by allowing their competitors access to the operating system.
Apple may become a strong competitor in consumer credit and payment processing and increase the value of the current device ecosystems.

The bundle of software and hardware updates may have implications for the further growth of the business. We will break down these announcements and analyze what they mean for investors in this article.

These are important updates for investors.

The M2 chips are new.
The new MacOS is Ventura.
The car is an Apple one.
There is Apple Finance.

In the chart below you can see how the history of product and strategic updates has influenced Apple’s stock price.

The stock price history on June 10th, 2022.

Most of the new services have been advertised to investors, but the company is only starting to implement them.

M2 chips are being rolled into devices.

The new MackBook Air/Pro will contain a new M2 chip. Apple consumers are going to get an increase in performance as the company claims that the chips deliver 18% more raw CPU performance vs M1 chips, as well as a 35% increasedGPU performance.

For investors, this means that Apple is moving ahead of the other two. If customers are satisfied with the product and experience, and see a noticeable increase in the performance of their devices, Apple may increase its market share.

Microsoft Windows may be involved in this process. People will have more incentive to switch to Apple if it becomes more convenient, as they will have a console or separate PC for gaming or other use.

Ventura is a new operating system.
Ventura has improvements and features that are compatible with other devices. Many features in the new version can be used by 3rd party developers to create better software.
Apple seems to be aggressively taking on the market, and has developed their own Metal3API that is aimed to increase gaming quality.

This means that Apple is offsetting the supply chain and chip pressures by pushing for quality in the software side.

Our latest analysis for Apple can be viewed.

There is a fight between Apple and TSLA.

Apple Car Play is compatible with 98% of US cars and allows users to integrate their phone into their car. The goal is to give users an improved system that will enable “smart” functions.
Car Play only worked with the dashboard, but Apple is moving to integrate the next generation with all the driver’s screens.

It is important to note that Apple has been working with EV car manufacturers to create an operating system which will be available for their EV. Traditional auto manufacturers have historically had difficulties building a good EV operating system, and Apple will be able to provide this as software leverage againstTesla, which has a full proprietary OS for their EV. In return, Apple may get a lot of data from manufacturers in order to improve their self-driving algorithms. The process may take a long time before investors see a material impact.

Apple finance.

Apple has been moving into the finance world for a while, and is now increasing the number of financial services.

The company will release “tap to pay”, where no additional hardware or payment terminal is required, for payments on the iPhone. The first thing investors think of is that this move will affect payment processors such as Block, as they require a physical terminal for processing, while Apple does not.

The Pay Later service from Apple allows people to spread their payment in 4 installments, with zero interest and no fees. Ensuring a better service for customers and increasing the value of Apple devices are important parts of this.

The service works out of the box with Apple Pay, and the company is currently collaborating with Mastercard in order to issue payment credentials, while Apple is handling the lending by the new subsidiary called Apple Financing.

Financial services like car insurance, payment processing, and short term revolving consumer credit are good uses of capital when a company has over $50 billion in cash on its balance sheet.

Moving into the EV space and gathering driver data may allow the company to create a tailored car insurance service that distinguishes good from bad drivers, based on performance history.

This means that new Apple services may affect partners and competitors in the beginning, but the company has a tendency to move these services in-house, creating an additional revenue stream for the company and increasing the general value of their product ecosystem.
The conclusion.

The company is expected to deliver on growth. It is more likely that these updates serve as a way to deliver what was already priced in the stock, rather than creating new value.

If allowed to take off, the financial branch could transform the company into a conglomerate.

There are 2 warning signs for Apple that you need to be aware of, and we should be aware of the risks as well.

Let us know if you have any feedback on this article. Would you be concerned about the content? You can get in touch with us. Alternatively, email editorial-team@simplywallst.com.

Goran Damchevski of Simply Wall St has no position in any of the companies mentioned. The article is not general in nature. Our commentary is based on historical data and analyst forecasts, but it is not intended to be financial advice. It isn’t a recommendation to buy or sell any stock and doesn’t take into account your objectives or financial situation. We want to bring you long-term focused analysis that is driven by data. The latest price-sensitive company announcements or qualitative material may not be factor in our analysis.