Apple Explores Personal Robotics as Next Revenue Stream

What You Need To Know

Apple (NASDAQ: AAPL) is reportedly exploring the field of personal robotics as a potential source of revenue. The company has teams investigating the development of a mobile robot that can follow users around their homes, as well as an advanced tabletop home device that uses robotics to move a display. While these projects are still in the early stages and it's unclear if they will be released, Apple is under pressure to find new sources of income following the cancellation of its electric vehicle project.

By entering the robotics sector, Apple could gain a larger presence in consumers' homes and take advantage of advancements in artificial intelligence. However, the company has not yet determined its approach to this field. The robotics work is being conducted within Apple's hardware engineering division and its AI and machine-learning group, overseen by John Giannandrea.

Why This Is Important for Retail Investors

1. Diversifying Revenue Streams: Apple exploring personal robotics signifies their efforts to diversify their sources of revenue beyond their traditional hardware offerings like iPhones and Macs. For retail investors, this move indicates Apple's recognition of the need to expand their product portfolio and potentially tap into new markets, which could lead to increased revenue growth in the future.

2. Potential for Market Disruption: If Apple successfully enters the personal robotics sector, it could disrupt the current market landscape and introduce innovative products that have the potential to reshape the way consumers interact with technology in their homes. This presents an opportunity for retail investors to invest in a company that may revolutionize the industry and capture market share.

3. Leveraging Advancements in Artificial Intelligence: The incorporation of robotics also emphasizes Apple's focus on leveraging advancements in artificial intelligence (AI). As AI continues to evolve and become more integral in various industries, including home automation, retail investors can view Apple's foray into personal robotics as an opportunity to benefit from the growing influence of AI in consumer technology.

4. Capitalizing on Changing Consumer Trends: Home automation and smart home devices are becoming increasingly popular among consumers. Apple's potential entry into the personal robotics market aligns with this trend, indicating their effort to meet evolving consumer demands. This could provide retail investors with exposure to a market segment that is expected to experience significant growth in the coming years.

5. Increased Competitiveness: By diversifying into personal robotics, Apple aims to gain a bigger foothold in consumers' homes, which puts them in direct competition with other established players in the industry, such as Amazon. This move indicates Apple's intention to compete and potentially disrupt the current market dynamics, offering retail investors the opportunity to invest in a company that is striving to remain competitive and expand its market presence.

Analysts remain optimistic about AAPL stock, with 57% Buy, 32% Hold and 11% Sell based on FactSet data. Its robust ecosystem of products and services continues to attract a loyal customer base.

How Can You Use This Information?

Here are some of the investing ideas that can be explored using this information:

Growth Investing

Apple's exploration into personal robotics indicates potential growth opportunities in the tech sector, particularly in home automation and AI advancements. As part of a diversified portfolio, adding AAPL stock could offer potential growth opportunities, given Apple's strong market position and history of innovation.

Growth investing focuses on stocks of companies expected to grow at an above-average rate compared to other stocks in the market; learn more in our article titled 'What is Growth Investing?'.

Thematic Investing

Retail investors can consider thematic investing by focusing on the theme of home automation and robotics, capitalizing on Apple's potential entry into this market.

Thematic Investing selects assets based on projected trends or themes believed to offer growth opportunities.

Innovation-Focused Investing

Apple's push into personal robotics aligns with innovation-focused investing strategies, as it involves cutting-edge technologies and advancements in AI.

Innovation-focused investing seeks out companies that are leaders in technological advancement, offering potential for significant growth as they develop new products and services.

Diversification

Investors looking to diversify their portfolios can consider adding Apple to their holdings, as the company's exploration of personal robotics opens up new revenue streams beyond its existing hardware products.

Diversification spreads investments across various assets to reduce risk and volatility in a portfolio.

Sector Rotation

The potential impact of Apple's entry into the personal robotics sector may lead to sector rotation, with investors potentially considering shifting their investments towards companies involved in home automation and AI technologies.

Sector Rotation is the practice of shifting investment capital from one industry sector to another to take advantage of the economic cycle.

Read What Others Are Saying

CNBC: Apple reportedly exploring personal home robots

Bloomberg: Apple (AAPL) Explores Home Robots After Abandoning Car Efforts

TechCrunch: Apple’s electric car loss could be home robotics’ gain

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Popular ETFs

For investors looking to gain exposure to AAPL stock or the dynamic field of robotics, several ETFs stand out due to their focus and holdings. It's important to consider both direct exposure to AAPL shares through ETFs that hold significant company shares and indirect exposure through ETFs dedicated to robotics and technology, where Apple's innovations may play a pivotal role.

ETFs Focused on Apple Inc.

1. Technology Sector ETFs: These ETFs often have Apple as one of their top holdings due to its size and impact on the tech sector. An example includes the Technology Select Sector SPDR Fund (XLK), which aims to mirror the performance of the Technology Select Sector of the S&P 500. This ETF provides broad exposure to the technology sector, including significant investment in Apple stock.

2. Large-Cap ETFs: ETFs focusing on large-cap stocks, such as the Vanguard Large-Cap ETF (VV), typically include AAPL stock in their portfolios due to Apple's market capitalization and influence in the market. This type of ETF offers a diversified investment in large-cap companies across various sectors, with Apple being a key component.

ETFs Focused on Robotics and Technology

1. Global Robotics ETFs: These ETFs invest in companies worldwide that are leaders in the development and manufacturing of robotics, automation, and artificial intelligence. The Global X Robotics & Artificial Intelligence ETF (BOTZ) is an example, providing investors with exposure to companies that stand to benefit from increased adoption and utilization of robotics and AI technology, sectors where Apple's innovative technologies also play a role.

2. Innovative Technology ETFs: ETFs that focus on innovative technologies offer exposure to companies leading in innovation, including robotics. The ARK Innovation ETF (ARKK) invests in companies that it believes are poised for growth and innovation in sectors like technology and healthcare, including robotics and AI.