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Apple and Goldman Sachs' iPhone Stock-Trading Feature Derailed by Market Shift

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Apple and Goldman Sachs' Stock-Trading Feature Put on Hold Due to Market Shift

Apple and Goldman Sachs had been collaborating on an investing feature that would allow consumers to buy and sell stocks, according to sources familiar with the plans. However, the project was shelved last year as the markets took a downturn. This effort, previously unreported, would have expanded Apple's suite of financial products powered by Goldman, which already included a credit card, buy now, pay later loans, and a high-yield savings account. Representatives for both Apple and Goldman declined to comment on the matter.

Market Conditions and Shifting Priorities

Apple's conversations with Goldman Sachs began during the hype cycle of 2020 when consumers, stuck at home due to the pandemic, were increasingly trading shares from their smartphones. The plan was for the investing feature to roll out in 2022, with one hypothetical use case being iPhone users investing extra cash into Apple shares. However, as markets faced challenges from higher rates and soaring inflation, the Apple team became concerned about potential user backlash if people lost money in the stock market with the assistance of an Apple product. As a result, Apple and Goldman shifted their focus towards launching savings accounts, which benefit from higher rates.

Uncertain Future and Regulatory Considerations

The current status of the stock-trading project remains unclear, especially after Goldman Sachs' CEO decided to retrench from most of the bank's consumer efforts. However, sources suggest that the infrastructure for the investing feature is mostly built and ready to go if Apple decides to move forward. Apple's previous foray into financial products, such as the Apple Card, faced regulatory challenges and incurred losses as its user base expanded. The company has also faced scrutiny from regulators for its App Store practices. The potential entry of Apple into the stock-trading market would put it in competition with established players like Robinhood, SoFi, Square, Charles Schwab, and Morgan Stanley's E-Trade. In conclusion, the collaboration between Apple and Goldman Sachs for a stock-trading feature was put on hold due to market conditions and concerns about user backlash. The future of the project remains uncertain, but it highlights Apple's ambition to expand its financial offerings. The move into stock trading would also draw regulatory attention, given the scrutiny faced by other platforms in the industry. As technology companies continue to enter the financial space, the landscape is evolving, and it remains to be seen how these developments will shape the industry and impact consumers.

Implications for New Businesses: A Hot Take

The shelving of Apple and Goldman Sachs' stock-trading feature provides crucial insights for new businesses, particularly those looking to venture into financial services.

Market Volatility and Business Decisions

The decision to put the project on hold due to market volatility underscores the importance of market conditions in shaping business strategies. New businesses must be prepared to adapt their plans in response to market shifts.
Regulatory Challenges and Business Risks
Apple's experience with regulatory challenges and user backlash highlights the potential risks associated with financial services. New businesses must navigate these challenges carefully, ensuring compliance and prioritizing user trust.
Competition and Market Entry
The potential entry of Apple into the stock-trading market would have intensified competition, underscoring the need for new businesses to differentiate their offerings and deliver value to customers. In conclusion, while Apple and Goldman Sachs' stock-trading feature has been put on hold, the development offers valuable lessons for new businesses. From adapting to market conditions and navigating regulatory challenges, to standing out in a competitive market, these insights can guide businesses as they navigate the evolving financial services landscape.
Story First Published at: https://www.cnbc.com/2023/09/20/apple-goldman-sachs-were-planning-a-stock-trading-feature-for-iphones.html
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