Apple Inc. (AAPL) Discussing Settlement With A123 Systems


Apple Inc. (NASDAQ:AAPL) is reportedly discussing a settlement with lithium-ion battery maker A123 Systems. Last month, A123 accused Apple of poaching its battery engineers. Apple has asked the federal court in Massachusetts to allow it more time to respond to the accusations because it is considering a resolution.

There have been rumors that Apple Inc. (NASDAQ:AAPL) could start manufacturing electric cars. Apple is said to have assembled a team of automotive experts to push forward its electric car project. The experts in Apple’s car project team have been drawn from automakers such as Ford Motor Company (NYSE:F) and Mercedes-Benz.

Sabotage

A123 Systems claimed that Apple Inc. (NASDAQ:AAPL) was hiring away some of its employees that had been mandated to lead some critical projects in the company. As Apple prepares to enter the electric car business, there have been reports about the company seeking to build a battery division.

This week, Apple told the court that it was exploring a resolution and would need more time to respond to the lawsuit brought against it by A123 Systems. However, both Apple and A123 Systems have preferred not to comment on the matter of potential resolution of the dispute.

Apple has not publicly confirmed or denied speculations that it wants to enter the car business as a manufacturer. However, major automotive players, such as BMW, have already warned that it won’t be business as usual for traditional carmakers with the entry of new players such as Apple.

A123 Systems received $249 million in government backing. The battery company filed for bankruptcy in 2012 and has been offloading some of its assets as part of restructuring efforts. The company specializes in large batteries for industries.

Enough resources

While huge investment has often been cited as one of the major barriers to entry in the car business, Apple Inc. (NASDAQ:AAPL) has enough resources to back its car investment. The company has nearly $180 billion in the bank. However, Apple’s entry into the electric car business could come as a huge challenge for Tesla Motors Inc (NASDAQ:TSLA), an electric carmaker that is struggling to make a profit. Tesla also uses lithium-ion batteries to power its cars, and is building its own battery facility, known as Gigafactory, for $5 billion in Nevada.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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