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Apple, Tesla Self-Driving Cars May Kill Off Consumer Auto Insurance

If Apple ( AAPL ), Tesla Motors ( TSLA ), Alphabet ‘s ( GOOGL ) Google and others succeed in making self-driving cars prevalent by 2040 and ride-hailing startups Uber and Lyft prosper, auto insurance may no longer be needed by many U.S. consumers, says S&P Global Market Intelligence. S&P released five reports this week analyzing the push into self-driving electric cars by Google, Tesla, China’s Baidu ( BIDU ) and others. While the business models of traditional automakers such as General Motors ( GM ) and Ford ( F ) will undergo big changes, the impact of self-driving cars on the $137 billion auto insurance industry and companies like Allstate ( ALL ) could be monumental, says S&P. “The advent of a totally driverless car threatens the core auto insurance liability business model,” said one S&P report. “A shift to driverless cars would theoretically shift the legal liability away from the driver, since the incidence of crashes would likely be reduced, and the liability in a crash would shift from human error to product liability, potentially reducing or removing the need for auto liability insurance.” Here are five other takeaways from S&P’s deep dive into self-driving cars and ride-sharing alliances.  Noting Apple’s $1 billion investment in China’s ride-hailing leader Didi Chuxing, which has an alliance with Lyft, S&P said ride-hailing apps may eventually summon autonomous cars. Uber, the leader in ride-sharing, is losing money, says S&P. Both Uber and Lyft face “competitive markets and issues related to how to classify their drivers and operate within federal laws and local rules.” While Apple has not officially announced plans, it seems to be gearing up in automotive technology. “Multiple hires made since the beginning of last year, including former Tesla employees, indicate an interest,” S&P said. “We also note substantial increases in R&D and capex over the past few years.” General Motors, which in early 2016 invested $500 million in Lyft, intends to integrate autonomous driving technology from Cruise Automation once it completes its planned $1 billion purchase of that company. Lyft drivers are a potential customer base for GM’s upcoming Bolt electric vehicle, says S&P. Radio service providers such as iHeart Communications, formerly Clear Channel, will likely face intensifying rivalries versus Sirius XM Radio ( SIRI ) and  Pandora Media ( P ), as well as Apple CarPlay and Google’s Android Auto. RELATED: Apple Gets Lift From China Ride-Hailing Service Investment Toyota Joins Apple, GM In Finding Ride-Hailing Partners Meet Uber’s Self-Driving Car, As Autonomous Race Heats Up .

Apple Building Siri-Based Rival To Amazon Echo

Apple ( AAPL ) reportedly is making a voice-response personal-assistant device to take on Amazon ( AMZN ) Echo and similar room appliances. The device will leverage Apple’s Siri application from its mobile devices, The Information reported Tuesday . The device will have a microphone and speaker that people can use to turn on music, get news headlines and make other spoken requests, the news website said. Apple is expected to release a software development kit to open up the device to third-party developers. The Cupertino, Calif.-based company will unveil the project at its Worldwide Developers Conference, which runs June 13-17 in San Francisco. Siri today offers limited third-party support, including services such as Yelp ( YELP ), Rotten Tomatoes and Shazam. Amazon largely created the market for always-listening digital assistants with Echo, introduced in late 2014. The e-commerce giant released an SDK last year for Alexa, the voice assistant that powers its Echo speakers. Last week, Alphabet ( GOOGL )-owned Google unveiled a conversational assistant that builds on its Google Now service and will support third-party services. It will sell a voice-activated speaker called Google Home later this year. Other digital assistant services include Microsoft ’s ( MSFT ) Cortana and Facebook ’s ( FB ) M. RELATED: Google echoes Amazon’s Echo, opens new virtual-reality door Amazon.com Has Likely Sold 3 Million Echo Speakers To Date

Tesla Short Seller Issues Scathing Warning Of Pending ‘Death Spiral’

Loading the player… Tesla Motors ( TSLA ) shares got slammed several weeks ago after analysts doubted the electric carmaker’s bullish production guidance. Now that the stock has tried to recover, bears want to take the driver’s seat again. Devonshire Research Group is shorting the stock and on Tuesday issued a report that says Tesla “has the potential to enter a death spiral” if it fails to deliver on its “bold claims on return and/or product value.” The investment firm also said Tesla “has engaged in aggressive accounting that calls to mind the experiences of Enron and WorldCom.” A Tesla spokeswoman directed IBD to the company’s latest shareholder letter, which explained that Tesla’s non-GAAP financial measures recognize revenue and related costs when customers take delivery of their cars. Other carmakers book revenue when vehicles are sold into dealership inventory rather than to end customers, it noted. BofA Sees 30% Downside And on Monday, Bank of America resumed coverage on Tesla with an underperform rating and 155 price target, which is about 30% lower than current prices. With the company’s recent equity offering, the analyst warned of further dilution to the stock, given Tesla’s cash burn rate. Tesla’s 2018 production goal was also called “optimistic at best.” Still, other Wall Street analysts have said the target is achievable and applauded Tesla for its leadership in autonomous driving technology. Global Equities Research said that suppliers are becoming more and more interested in working with Tesla, with the current supplier activity level at its Fremont, Calif., factory almost twice the level seen in December. Tesla Stock Hits Resistance Despite the negative reports, Tesla shares are holding up in the stock market today , rising 0.5%. But in Monday’s session, Tesla’s attempt to retake the key 200-day line failed as it hit resistance there. Shares are trading 24% below their high reached last July. Nvidia On Fire Meanwhile, Tesla chip supplier Nvidia ( NVDA ) is still on fire. Nvidia shares are hitting another new high Tuesday as they rise 2.2% and are extended 37% past a cup-with-handle buy point cleared in March. Mobileye Retakes 50-Day Tesla partner Mobileye ( MBLY ), which is working on autonomous driving capabilities, is trying to retake its 50-day moving average with a 1% gain. Mobileye stock is trading 42% below its all-time high reached last August. Alphabet Retakes 200-Day And Google owner Alphabet ( GOOGL ), which is also developing a self-driving car, is retaking its 200-day line as it climbs 2.2% in above-average volume. It’s still trading below its 50-day line, but a flat base with a 791.05 buy point has now taken shape.