Tuesday, January 26, 2016

Apple Car Development Hits Speed Bumps (AAPL)

Zadesky's resignation isn't the only challenge facing the Apple Car

After the close of the markets last Friday, The Wall Street Journal reported that 16-year Apple Inc. (AAPL) veteran Steve Zadesky had announced his intention to leave the company in the very near future, although a specific date for his departure was not revealed. Zadesky, who has been the head of the Apple Car project for more than two years, is apparently resigning for purely personal reasons.

While AAPL still has not formally confirmed the existence of its electric vehicle efforts, Project Titan has apparently been expanding at a rapid rate, with management approving an increase in the size of the project team to roughly 1,800 people. The current goal of Project Titan is to have a finished version of the all-electric Apple Car ready for consumers by the year 2019.

With Zadesky’s resignation looming, some have begun to question the viability of a complete Apple Car within the next few years. These concerns aren’t entirely based on the coming lack of Zadesky’s input, but also on the mounting reports about current status and conditions within Project Titan.

According to Stuff:
“Sources say that employees are struggling without ‘clear goals for the project,’ and that some of management’s deadlines are too ambitious to hit in the expected timeframes.”
However, those concerns are not shared by Dieter Zetsche, the Chief Executive of Daimler AG (DDAIF) and head of Mercedes-Benz. In a visit to Silicon Valley earlier this month, Zetsche stated that progress on the Apple Car has advanced further than he had originally anticipated.

This is in stark contrast to his comments last February, when he likened the notion of AAPL building an electric vehicle to Mercedes-Benz building a smartphone:
“If there were a rumour that Mercedes or Daimler planned to start building smartphones then they (Apple) would not be sleepless at night. And the same applies to me.”

Thursday, January 21, 2016

Amazon Stock’s Next Big Catalyst — Ocean Shipping?

AMZN's new delivery method will disrupt more than just BABA

Last week, it was reported that international e-commerce giant Amazon.com, Inc. (AMZN) had successfully registered as an ocean freight forwarder in the U.S.

Officially, it’s Amazon China that is listed as a licensed freight forwarding service provider by the Federal Maritime Commission, which will open the door to countless suppliers and vendors across Asia to begin shipping their wares via Amazon’s logistics network.

This move is another step forward for AMZN in its goal to control every step of the delivery process.

The notion of shipping via ocean freighters won’t be attractive for domestic retailers, but Amazon stock owners should be giddy about the prospects it represents.

There are hoards of Chinese retailers who will jump at the chance to ship their goods directly with Amazon and get them into its fulfillment centers. As David Morris of Fortune explained:
“As a freight forwarder, Amazon wouldn’t be putting its own ships in the water. Instead, it would be selling existing capacity, and managing the shipping process. An international Amazon freight service could oversee a products’ (sic) journey from ramp the (sic) at a Chinese factory all the way to an American warehouse.”
Amazon’s efforts to create its own delivery and distribution network will eventually pay off, and a worldwide logistics infrastructure will mean never again having to rely on a third-party to fulfill Amazon.com orders.

Further, such expanded capabilities will strengthen Amazon’s ability to compete with Chinese-based e-commerce retailer Alibaba (BABA), which has been taking steps to expand operations in the U.S.