Last week, Apple created a new business unit called Apple Energy. Apple has been buying renewable energy to power its facilities using an instrument called an REC. (Renewable Energy Credit) Essentially, the idea with RECs is that renewable energy, bought by Apple and put into the grid in one place, is used by an Apple facility or store from the grid in another. Because the contribution of renewable energy and usage of energy match, the net is that Apple’s energy usage is logically renewable-sourced. And Apple has been buying a lot of renewable energy. So much so, that Apple is a mini-utility for clean energy. Why do that?
Millennials
Well, for one, given the volume of clean energy it purchases, Apple can fairly claim itself as a sustainability leader to its customers and employees. Many of both constituencies are millenials, a group particularly focused on buying from and working for companies that act responsibly from an environmental perspective. So, there’s an argument to be made that Apple Energy is simply a smart marketing move to capture hearts of Millennial customers. That’s fantastic and frankly necessary for Apple anyway. But, it’s not the important take-away.
Product
My theory is that it’s about service + product combos. Think about what Apple started in 2007 with the launch of the iPhone. Apple added massive value on both sides of the communication network and created a revolution… without needing to own the delivery network. Apple launched the iPhone on the consumer side of the network and the AppStore (and other services) on the Apple side of the network. AT&T sat in between.
With Apple Energy, Apple may be creating a renewable energy service on one side of the Enernet and matching that to new devices on the consumer side of the network. Devices like smart home tech, batteries and energy appliances that pair with Apple’s renewable energy and differentiate themselves as dynamic energy devices, powered by clean tech.
Depending on how that’s done that could be a transformative moment for energy. Imagine new devices from Apple in their HomeKit suite… Apple’s versions of Nest, Sonos, Sense, Powerwall, and Chargepoint, all with the option to be powered by renewable energy. How? Apple sells you a sexy product with the “guaranteed carbon free” energy as an add-on through it’s renewable energy service. This would be similar to how Tesla bundles in its SuperCharging network for its S and X models. Speaking of which…
Car
It’s no secret that Apple is working on a car. If you believe that’s true, then Apple Energy is a logical move. It’s a place to house R&D into battery tech and EV charging products, and procurement of renewable energy for the fleet of energy devices necessary to support iAutos on the Enernet. It could also be a place, for now, to house some development around its automotive product.
Assuming Apple does launch a car, it’ll need charging stations, for home and community, and a lot of them. If the approach is anything like Apple’s charging philosophy for its phones, Apple will design a custom connector with innovative features that folks never imagined from a “cord”… like a guarantee that the electrons passing through it are green. Apple Energy could house all that.
If it’s not evident by now, I’m impressed by Apple and the Apple Energy move. If I’m right, it’s a massively strategic move for Apple, one that demonstrates leadership and vision. Assuming Apple is successful, the move may also portend a coming, Apple-led shift in products and how businesses and consumers think about energy.
Advisor Abbate 