In a time when stock markets were booming and trading apps like Robinhood were gaining popularity among consumers, Apple and Goldman Sachs had plans to collaborate on an investing feature that would allow users to buy and sell stocks. However, this project was ultimately shelved in the face of a downturn in the markets. The efforts to develop this feature, which have not been previously reported, would have expanded Apple’s suite of financial products, which already included a credit card, buy now, pay later loans, and a high-yield savings account. While both Apple and Goldman Sachs declined to comment on this initiative, it represents a missed opportunity for both companies to capitalize on the growing trend of retail investing.
Apple’s decision to explore an investing feature came at a time when interest rates were at an all-time low due to the COVID-19 pandemic. With consumers stuck at home and spending more time trading stocks from their smartphones, there was a significant demand for accessible and user-friendly investing platforms. Apple’s conversations with Goldman Sachs began during this hype cycle in 2020, with plans for a rollout scheduled for 2022. The envisioned use case involved iPhone users investing their extra cash directly into Apple shares. However, as markets became more volatile due to rising interest rates and inflation, concerns arose within the Apple team regarding potential user backlash if people lost money in the stock market using an Apple product.
Given the uncertain market conditions and the risk associated with stock market investing, Apple and Goldman Sachs decided to pivot their plans and focus on launching high-yield savings accounts instead. This shift would allow them to take advantage of the higher interest rates offered by savings accounts and avoid potential negative reactions from users who might lose money in the stock market. While the status of the stock-trading project remains unclear, it is worth noting that the infrastructure for an investing feature has already been developed and could be utilized if Apple decides to move forward with the initiative in the future.
The collaboration between Apple and Goldman Sachs began three years ago with the launch of the Apple Card, which initially garnered significant attention. However, as the user base expanded, regulatory scrutiny increased, and the business started incurring losses. In response to these challenges, Goldman Sachs introduced a high-interest savings account for Apple Card users, offering an attractive annual percentage yield of 4.15%. Additionally, the partnership resulted in the development of Apple Pay Later, a buy now, pay later service that allows users to split purchases into four interest-free payments over six weeks.
If the plans for the trading app had come to fruition, Apple would have entered a highly competitive market. Companies like Robinhood, SoFi, and Block’s Square, as well as traditional brokerage firms such as Charles Schwab and Morgan Stanley’s E-Trade, already dominated the trading app landscape. Stock trading has become a vital strategy for financial firms to attract customers and drive engagement on their platforms. Apple’s entry into this space with a user-friendly and intuitive app could have disrupted the market, especially considering the company’s previous success in creating consumer-centric products and experiences.
Apple’s foray into the trading app market could have attracted the attention of regulators, who have closely scrutinized the company’s practices regarding its App Store. Similarly, Robinhood has faced regulatory scrutiny for its perceived “gamification” of financial markets. Other tech companies, such as Elon Musk’s X and PayPal, have also expressed interest in entering the space, albeit with varying degrees of success and commitment.
Ultimately, the decision to abandon the trading app project represents a missed opportunity for both Apple and Goldman Sachs to capitalize on the growing demand for accessible investment platforms. As retail investing gains popularity and more consumers turn to trading apps for their investment needs, the collaboration between these two industry giants could have resulted in a revolutionary product. While the project may have been fraught with risks, particularly in a volatile market environment, the potential rewards could have been substantial.
The shelved investing feature project between Apple and Goldman Sachs highlights the challenges and missed opportunities faced by companies in the trading app market. With the continuous developments and innovations in financial technology, future collaborations and product launches will likely shape the landscape of retail investing and redefine the way individuals participate in financial markets.
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