Hertz Will Buy 65,000 EVs; Musk Takes Almost 10% Piece of Twitter; Alphabet’s Wing Launching Drone Deliveries in DFW; Apple’s Phone $ubscriptionsPosted: April 4, 2022
Hertz has committed to buying 65,000 EVs from Polestar, the sub-brand from Volvo and its corporate parent Geely of China. Theverge.com reports that Hertz had earlier announced a purchase of 100,000 Teslas. The Polestar buy will run over 5 years. Hertz fields about 500,000 vehicles in its world wide fleet, so this will make about 20% of them EVs. The company has plans to electrify nearly all of its fleet.
According to an SEC filing, Elon Musk has snapped up 9.2% of Twitter. According to electric.co, the electric vehicle and space billionaire dropped nearly $3 billion in the buy…practically pocket change for him. Most other mega billionaires have a few billion in companies besides the one they founded and became wealthy from, like Jeff Bezos of Amazon or Mark Zuckerberg of Facebook (Meta.) Up to now, Musk has claimed he didn’t own any publicly traded stock besides Tesla. Since Musk recently complained about Twitter throttling free speech and threatened to launch his own social media platform, maybe this was an alternative way to push Twitter into more of his vision of free speech. With almost 10%, he could jockey for a board seat.
Wing, a division of Alphabet, will be starting drone deliveries in Dallas Fort Worth in a matter of days (April 7th.) Engadget.com notes that Wing’s primary customer at launch is Walgreens. They will deliver health and wellness products directly to people’s homes. In addition to Walgreens, Wing will deliver Blue Bell Ice Cream, Easyvet pet prescriptions, and first aid kits from Texas Health. The Wing drones can carry a payload of around 3.3 lbs and make a round trip for deliveries of about 6 miles…so really will only be able to reach a customer under 3 miles away from the launch site. They will initially be launched from a company parking lot.
Bloomberg’s Mark Gurman did some calculations after word of Apple’s planned iPhone subscription service came out. The service will not only be a way for Apple to get more people to trade up to new phones a year, but will make them more money (surprise!) Right now, most people trade about every 3 years, unless they have damage. The average iPhone price is about $825 according to Counterpoint Research…which means Apple picks up about $800 per customer every 3 years. With a subscription, they might be able to pump that up to $1000 and take the old phones back to sell on the secondary market. Gurman speculates that Apple could lease you an iPhone 13 for $35 a month, garnering Cupertino $1260 over 3 years instead of $799. With a 13 Pro, that might be more like $45 a month, which means $1620 instead of $999. For the Pro Max, a $50 per month subscription would bring in $1800 to Apple instead of $1099. AND, they take back the old phone and resell that! Keep in mind that this is like a lease instead of making car payments on a loan. Leases ALWAYS cost you more. Companies that lease don’t care, because they can write off the expense….but for the average buyer, you can’t do this. Weigh the option carefully if and when (and it looks like when) subscription iPhones become available.