Why Apple should acquire Tesla

“A decade after Tesla announced the Model S, and six years after its delivery, no other company has been able to produce anything comparable,” Vivek Wadhwa writes for VentureBeat. “The big automotive manufacturers are claiming they will soon eat Tesla’s lunch, but even the strongest offerings — those of BMW and Mercedes — are merely souped-up cassette players trying to compete with an iPod.”

“Tesla learned the hard way the intricacies of combining legacy automotive technologies with modern software — through trial and error and constant delay. It also struggled to automate production. Using advanced robots, however, it has finally figured out how to build an astonishing 6,000 cars per week, some in a tent,” Wadhwa writes. “Now, as Tesla struggles with its cash balances, extremely negative press, and Elon Musk’s erratic tweets, it is at another crossroads and, in order to reach its potential, needs a strategic partner. It may not make sense for it to continue as a public company.”

“Tesla would provide Apple with an entirely new set of technology platforms on which it could build a new line of products,” Wadhwa writes. “Apple desperately needs these in order to sustain its trillion-dollar market capitalization; after the release of the iPhone, in 2007, it has had virtually no world-changing products.”

MacDailyNews Take: Puleeze. The least “desperate” compmay in the solar system is Apple Inc. Apple’s Services business alone are more than enough to sustain woefully undervalued Apple’s trillion-dollar market cap. “Virtually no world-changing products” since 2007? Get real: iPad, Apple Watch, and AirPods, to name just three.

“I’ll bet that Musk would take an offer that solved his financial problems and gave him autonomy,” Wadhwa writes. “With the headaches of funding and quarterly stock pressure taken away, the world’s greatest innovator would be free to develop world-changing ideas that transform entire industries, including automotive, energy, and space.”

Read more in the full article here.

MacDailyNews Take: Wadhwa sounds like someone who’s heavily invested in Tesla and is desperately looking for a way out of crazytown.

SEE ALSO:
Tesla sinks on concerns over CEO Elon Musk’s erratic behavior – August 17, 2018
The wild success of Apple Watch has created a luxury smartwatch boom – July 3, 2018
IDC: Global wearables market grew 7.7% in Q417 and 10.3% in 2017 as Apple Watch seized the lead – March 1, 2018
Apple Watch dominates smartwatch market – March 1, 2018
Apple Watch sets new all-time record for wearables shipments; ‘Apple has won the wearables game’ – analyst – February 7, 2018
Apple Watch sales momentum is growing; unit sales now rival those of Macintosh – January 23, 2018
Apple Watch Series 3 shipments predicted to rise to 23-25 million in 2018 – December 14, 2017
Apple Watch: The war for wearables is over, and Apple won – December 12, 2017
Canalys estimates Apple shipped 3.9 million Apple Watch units in Q317, despite strong demand outstripping supply – November 14, 2017
When Apple Watch surpassed iPod – November 8, 2017

16 Comments

  1. The only thing I would say is that Tesla is the closest to a technology company that the motor industry has. They sell at a comparatively high price point that Apple would want to compete in, yet have mass appeal like Apple products, plus they make good products. If Apple wanted to make cars they’d have an awful lot of work to get into the market (much of which Tesla have already done) and they would have products Apple aren’t interested in (low end models) and are on the way to what you might call mass product. It would be an expensive acquisition and but I can see why it could work. Buying a real luxury car manufacturer who sell very few cars because they’re so expensive really serves no purpose for Apple.

    1. Tesla is too expensive at this point. Apple might just be throwing away money on a company that can’t come close to turning a profit. I think there are far more easier ways for Apple to make money than the automobile business. I like the whole idea of Tesla vehicles (being electric and intelligent) but if they can’t become profitable, I don’t want Apple even thinking about buying Tesla. The dream is good, but the reality is bad.

  2. They won’t do it, cars suck. Can you imagine the warranty issues that would be involved? And patent issues up the wazoo, every crackpot in the world would be screaming for a piece of the pie, for round wheels, lights that blink to indicate a method of turning in a particular direction. A floor mounted device that will enable the motor to accelerate when depressed…

    Skip the whole car business

  3. Interesting idea considering that Apple does have serious aspirations in the automotive market, but I think Musk would have to be sidelined. Brilliant, visionary, yes, but at times he seems like Steve Jobs on crystal meth.

    1. I think the criticism of Apple that they would be swallowed by existing/bigger existing companies will for Tesla most likely materialise in time and very likely it will be bought up by one of them. It would likely become an anchor round the neck of Apple a no mans land buy with no easy way out when it goes all wrong. Its a powerful brand but far less depth than perception presently dictates.

      As for Musk he would be a disaster associated with Apple using it for his own purposes as Jobs did when he came back but without any of the positive results from someone who loved the company rather than at heart despises it. And if you buy Tesla and remove Musk the branding perception that keeps it alive by way of the showman come trickster on the edge of madness would soon dissipate. Its the the Wizard of Oz, once you lose belief in the trickery of the all powerful wizard, all that is left is a fast talking clown.

      I want Tesla to prevail, Musk showed the way over the years that is transforming an industry but that should be others task to sustain certainly not Apples in chasing imaginary dreams for the sake of it.

  4. Wow these idiots still think that Apple has to produce world changing products to survive and prosper. First they couldn’t get into the innovative Apple at all always deriding it for trying to be different.

    Now that the market has changed and the opportunity to produce game changers at will out of a hat is somewhat less easily done in this new one they can’t understand that Apples success will be for the most part in a different direction where its advances are far more subtle than those of an upstart company fighting to survive and make an impact. I would just love a new dynamic product but you can’t produce one unless an opportunity is there and recognised. If the watch isn’t one of those then what the hell are we looking for here because its far easier to talk about a company not producing them than actually determining just what they should be inventing/producing.

    The massive space for great leaps from around the late 90s to 2010 when ideas and technology hit the perfect storm has generally become about improving upon things we already use and the market for those smaller innovations and general improved devices makes something new more difficult to stand out from the crowd even when you do create it, there is so much buzz.

    Home speakers are a big ‘thing’ but are they really and potentially bigger than the Watch? Will they be over the next 5 or 10 years? Surely the true innovation would be if they were there but not visible. If AR isn’t a big new innovation (if shared with others) then what is, but Apple simply can’t expect to have these things to themselves for years anymore before others see the light. The fact that these people are wanting more rather than deriding Apples innovations means that business is doing so too now thats how Apple changed the market originally and it took years. Competitors have learned and are a lot smarter than they were 10 to 20 years ago and there are so many more companies in the game and the small innovative ones are listened to (and acquired) now in ways they were shunned all those years ago as irrelevant or too big a risk when Apple created new markets but were derided as they did so. So the market has changed enormously and if (once again) the market people don’t see that happening then what exactly is their point of existing at all. Hell even Cook has more vision.

    He got the Job because Jobs could see the change and Cook was the right man for the job the trouble is that he is as time passes too conservative and unable to see enough of the subtle innovations and improvements rather than that he isn’t seeing imaginary great advances that the market people just want but can’t define.

  5. Apple could buy the entire US automotive industry, if it wanted. It doesn’t.

    I think Apple will do a lot of it themselves, with perhaps the purchase of a high-end luxury and/or performance manufacturer or two to bolder it’s automotive credentials in the public’s eyes (perhaps an Aston Martin, McLaren, or similar).

    1. Yes, without government subsidies under the last administration, could they even exist? Apple would do better acquiring profitable companies and many out there …

  6. Article: “…[Tesla] is at another crossroads and, in order to reach its potential, needs a strategic partner. It may not make sense for it to continue as a public company.”

    But, if Apple (a publicly traded company) were to invest in Tesla, or even acquire it entirely, Tesla would still be a publicly traded company, even as a division of Apple. So that whole line of thinking makes just about as much sense as Apple “taking itself private,” which has been debunked many times on this forum.

    If Apple is thinking about acquiring a substantial stake in Tesla, then I suggest that the company waits until Tesla reaches a crisis point and its stock tanks even further. That is when $100B or more in cash and short term securities comes in really handy…

  7. Apple will not ever buy Tesla. That isn’t even in the feasible set and Tesla does NOT need to be acquired by Apple. All that is silly talk. Tesla likely would only need an investment of $10-20 billion to take the company totally private from any investment source – that is not a “buyout” or takeover of the company. No individual investor would hold more stock than Elon Musk. In addition to a capital investment, Tesla could benefit from hiring a Chief Operating Officer (the role Cook had at Apple before becoming CEO). Again, nothing dramatic needed and totally doable without the hysterics attached to takeover talk.

    Tesla’s appeal to Apple could come in the form of not just the car business, but Tesla’s huge energy storage and solar business which eventually will be as large as their auto franchise. People don’t think about Apple in the energy business but they just did a huge deal on the east coast in the power generation space. Environmentally friendly power generation fits handily with energy storage.

    Despite Apple’s huge R&D expense in Project Titan and Tesla’s clear association with driver assisted electric vehicles, I think the energy connection is where the two corporate interests may meld the best and be most easily complimentary.

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