Any longtime Apple (NASDAQ:AAPL) watcher understands that it is one of the largest Fintechs in the world with plans to become any bigger. Adding investments and trading makes sense. It is just a matter of time.
Today, there is a report by CNBC quoting those in the know that Apple was planning to introduce stock trading with Goldman Sachs (NYSE:GS) until decision-makers balked due to the market downturn.
While the report claims that the introduction of stock trading was put on pause due to the market slump – this does not hold water because you can make money when markets go up and go down. As Apple has an enormous installed user base and its banking features, like Apple Savings, have been a huge success – now is the time to hit the accelerator – not push the brakes. This is probably the work of the Apple/Goldman spin team in an act of triage as Goldman has retrenched.
CNBC claims that Goldman and Apple started the discussion in 2020:
“But as markets were roiled by higher rates and soaring inflation, the Apple team feared user backlash if people lost money in the stock market with the assistance of an Apple product, the sources said. That’s when the iPhone maker and Goldman switched directions and pushed the plan to launch savings accounts, which benefit from higher rates.”
Perhaps the real reason Apple has held back on offering stock trading is that Goldman Sachs has gotten cold feet when it comes to offering consumer financial services. While their theory was accurate that tech could be used to scale services for the mass affluent, their execution was lacking, and the commitment was not that deep. David Solomon, CEO of Goldman, feared for his job (as he should) and backed off on consumer Fintech, while Goldman’s more traditional operations flagged due to a challenging economy, and the losses, albeit small, in consumer finance became more visible. Solomon is not a fearless entrepreneur at heart, and the Board probably could not stomach the disruptive innovation. That much should be clear.
So, will Apple still offer stock trading at some point in the future? Absolutely.
Perhaps Apple will build it in-house – like their streaming business, which is becoming a really big success, or perhaps they will partner with a broker-dealer, or maybe they will acquire an already established broker. The last option is the least likely as Apple tries to avoid culture clashes intrinsic to big acquisitions that make sense on paper but struggle in the real world.
Expect Apple to move forward with more financial services at some point in 2024, including trading. Just my $0.02.