As equities soared in 2020 and consumers flocked to trading apps like Robinhood, Apple and Goldman Sachs were working on an investing feature that would let consumers buy and sell stocks. However, the project was ultimately shelved, according to sources familiar with the plans. This article delves into the details of Apple’s foray into the investing world, the challenges they faced, and the eventual shift in their strategy.
Apple’s conversations with Goldman Sachs began during the hype cycle surrounding trading apps in 2020, as consumers stuck at home turned to trading shares from their smartphones. The plan was to develop an investing feature that would allow iPhone users to put money into Apple shares directly. This feature would have added to Apple’s suite of financial products, which already included a credit card, buy now, pay later loans, and a high-yield savings account.
However, as markets experienced volatility due to higher interest rates and soaring inflation, the Apple team grew concerned about potential user backlash if people lost money in the stock market with the assistance of an Apple product. The fear of negative publicity and damage to Apple’s brand reputation led to a change in direction. Apple and Goldman Sachs decided to pivot and focus on launching savings accounts instead, taking advantage of higher rates.
The current status of the stock-trading project remains uncertain, as Goldman Sachs recently decided to retrench from nearly all of its consumer efforts. However, sources indicate that the infrastructure for the investing feature has been mostly built and is ready to go should Apple choose to move forward with it. The potential market entry for Apple would have placed them in fierce competition with established players like Robinhood, SoFi, Charles Schwab, and Morgan Stanley’s E-Trade.
Entering the stock-trading market would have raised concerns among regulators, who have previously scrutinized Apple for its App Store practices. Regulators have also grilled Robinhood for “gamifying” markets, highlighting the need for responsible and ethical practices in the industry. Additionally, other tech companies such as Elon Musk’s X (formerly known as Twitter) and PayPal have shown interest in expanding into stock trading through partnerships with eToro and industry hires, respectively.
The introduction of an investing feature would have aligned with the trend of financial firms expanding into new avenues to retain customers and drive engagement on their platforms. Apple aimed to capture a share of this market, but the challenges they faced, combined with Goldman Sachs’ strategic pivot, led to the shelving of the project.
Apple’s plans to launch an investing feature in partnership with Goldman Sachs ultimately fell through due to concerns about potential user backlash and changing market conditions. The shift towards offering savings accounts instead allowed Apple to leverage higher interest rates and cater to consumer demand for alternative financial products. While the fate of the investing feature remains unclear, the potential entry into the stock-trading market would have positioned Apple in a highly competitive landscape and raised regulatory scrutiny. As the financial industry continues to evolve, it is crucial for companies to carefully consider the risks and benefits of expanding their product offerings.