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dirkhh
Middle-aged Member
While Apple buying Tesla might help the goal of furthering EV adoption simply because of Apple's extremely deep pockets and their ability to push past many of the problems that Tesla has (hey, there's an Apple store in every mall, only Starbucks would give them more outlets...), I think that it would be a net negative. Tesla does many things that might not be in the best interest of their margin dollars but instead help further an EV future. Apple has no track record whatsoever of wanting anything but margin dollars.
But anything that Apple does in and around of EVs. Be it building their own (doubtful - see margin dollars; cars are decidedly NOT high margin), be it providing the software for EVs, be it anything else that we just can't envision just yet, it's a good thing. Because Apple has money, they have tremendous brand value and a huge, very loyal following. I'd love to see Apple engage with GM and Ford and anyone else in creating an amazing user experience for an EV driver. That would get us closer to the 5% market share that EVs need to start turning the tide on ICE based cars...
But anything that Apple does in and around of EVs. Be it building their own (doubtful - see margin dollars; cars are decidedly NOT high margin), be it providing the software for EVs, be it anything else that we just can't envision just yet, it's a good thing. Because Apple has money, they have tremendous brand value and a huge, very loyal following. I'd love to see Apple engage with GM and Ford and anyone else in creating an amazing user experience for an EV driver. That would get us closer to the 5% market share that EVs need to start turning the tide on ICE based cars...
stopcrazypp
Well-Known Member
Yeah agree. Acquisition not in the cards imo; they came to that conclusion long ago, and are presently in collaboration mode. The strength blending is a very good fit and equally important the objectives are in perfect alignment. Further more neither company minds both collaboration/partnering and concurrently competing (if it even comes to that)- management of both companies clearly rise above that distinction.
Apple design (Ive and co), endless capital, supreme component sourcing logistics, brand and market access with worlwide stores, innovation of interior environment and user interactive experience.
Tesla's engineering of propulsion, safety, heavy manufacturing, charging network, direct to customer sales network.
Commonality of mission, style, purpose and scope
I see it as a perfect hand in glove collaborative fit, concurrently overlapped in some competitive components that have no meaning given the common mission and size of disruption achieved in collaboration. Each expands the others' mission achievement by orders of magnitude beyond competitive consideration and they both know it.
I think together they may well reinvent and deliver disruptive transportation (including hyper loop), and in so doing transport Elon to to the Red Planet - his ultimate Transportive Mission (I wonder if that trip may already have hired a Cook...)
jhm
Well-Known Member
Dirkhh, if you've gotten the 5% figure from me, know that I have changed my view. The 5% level was based on the assumption that the car market grows at 2.5% rate while EVs grow at 50% rate; whence 5% = 2.5%/50% is the critical EV market share afterwhich EV growth dominates growth. More recently I have learned that the motor vehicle market is much more dynamic than that. From 2003 to 2013, the annualized growth rate for vehicles was 3.7%. Most of this growth and the growth of oil consumption is happening in non-OECD countries. Actually cars and oil are declining in many OECD countries, which is where Tesla is strongest, so it is easy to get the impression that the auto market is not so dynamic. But really this is quite good news for Tesla as it means solid growth prospect for several decades. I think Tesla can tackle the challenge of how to bring both electricity and EVs to developing nations, and here stationary storage will be hugely important where electric grids are inadequate or nonexistant.
So for now my eye is on 7.5% EV penetration. I also believe we should measure marketshare in revenue, not unit sales. It's the inability to grow ICE revenue that will bring the auto industry into crisis. As EVs absorb an increasing share of revenue, surplus ICE unit capacity will turn to build ever cheaper cars for non-OECD markets. Cheap oil and cheap cars will flow into these markets like never before. Traditional automakers may be able to grow their unit sales of $10k vehicles, even as total revenues decline and unit sales fall for vehicles priced over $20k. This will be an example of dumping obsolete technology on third world companies.
So if Apple and Tesla team up, they can achieve 8.5% revenue share by 2022. This will drive the traditional automakers out of the OECD markets in search for growth in low value unit sales. What the Tesla-Apple ecosystem really needs is a third collaborator to focus on vehcles in non-OECD markets. So automakers in China, India, Brazil or elsehere in Asia and South America could play a crucial role. This will be much more challenging work, but it will be critical to putting a cap on the oil industry. PV+storage+EV technology needs to be integrated and packaged to go where utilities fear to tread. We've seen mobile phones leapfrog landline phones in underdeveloped markets, and that is what is needed for EVs too. Developing stationary storage systems to serve as power servers in microgrids and homegrids is key to this development.
Imagine for example a region without a power grid. Build out solar powered Supercharging stations. Sell EVs that can charge for free and be used to power other devices and even entire homes. Thus, EVs would become an incredibly valuable alternative to both gas vehicles and powergrids.
stealthology
Member
New rumor out this morning that Apple intents to make a strategic investment in China. Comes from 21SO in China.
Also: iClarified - Apple News - Jonathan Ive and Elon Musk Spotted Deep in Conversation at Oscars After-Party
Also: iClarified - Apple News - Jonathan Ive and Elon Musk Spotted Deep in Conversation at Oscars After-Party
RobStark
Well-Known Member
Tim Cook, was asked at the annual shareholder meeting by the NCPPR, the conservative finance group, to disclose the costs of Apple’s energy sustainability programs, and make a commitment to doing only those things that were profitable.
Mr. Cook replied –with an uncharacteristic display of emotion–that a return on investment (ROI) was not the primary consideration on such issues. “When we work on making our devices accessible by the blind,” he said, “I don’t consider the bloody ROI.” It was the same thing for environmental issues, worker safety, and other areas that don’t have an immediate profit. The company does “a lot of things for reasons besides profit motive. We want to leave the world better than we found it.”
Reportedly looking directly at the NCPPR representative, he said, “If you want me to do things only for ROI reasons, you should get out of this stock.”
Why Tim Cook Doesn't Care About 'The Bloody ROI' - Forbes
dirkhh
Middle-aged Member
Yay Tim Cook. Excellent response. I didn't know that.
So yes, it may be a bit of a stretch, but based on this they could justify entering the lower margin EV business.
And the thing to remember (and I mean to remind myself, here) - when Apple entered the phone business, that was extremely low margin. And today it is low margin for everyone except for Apple.
People are willing to pay 2x the price of a Samsung laptop for a similar Apple laptop. Maybe they'll be willing to pay $200k for an iCar90D?
dirkhh
Middle-aged Member
Don't confuse me with facts.
And in all honesty, I have been flabbergasted about the prices people are willing to pay for Apple products... But I guess you have a point. Even Apple won't be able to complete with a $40k Model 3 by offering a $60k iCar...
Tim Cook is not only extremely smart, he is also has an environmental conscience and cares about the welfare of his employees. I was blown away by his response to the question posed by NCPPR.
I would love to see some collaboration between Tesla and Apple but do not expect Apple to get into the business of making cars.
I would love to see some collaboration between Tesla and Apple but do not expect Apple to get into the business of making cars.
Norbert
TSLA will win
I wouldn't expect Apple to build cars simply because that is too different than their current business. But obviously Apple is interested in in-car-computing. If Apple were to diversify their product line, I would expect that to happen more incrementally in smaller steps. An electric car is electric but can't be implemented as a computer in the same way as a music player, a phone or a watch.
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And I would expect Apple to be interested in Tesla's engineers because of their car-software expertise, or perhaps for their understanding of batteries, but less for electric drive trains.
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And I would expect Apple to be interested in Tesla's engineers because of their car-software expertise, or perhaps for their understanding of batteries, but less for electric drive trains.
Makes a lot of sense. Put simply: computer content in cars will continually increase, AAPL could be a first innovator and market leader in this as in many other areas of consumer electronics, market potential material to AAPL, why invest and compete in auto design and distribution at lower margins when you can be the supplier of the core control/infotainment system for 30%-40% of annual worldwide auto production.
What would TSLA bring to the table?
TSLA's implementation is far ahead of anyone else. Not just infotainment - but core functionality - Firmware downloads, remote logs, functionality implementation, functionality adjustments. This shows a very advanced vehicle software architecture. Remember that other car manufacturers use multiple 3rd party sourced systems. Some have the ability to have a common information bus but I do not see strong evidence that each sub-system has been designed and implemented under a single architecture or even that most sub-systems have two way functionality built in over the information bus.
Are you suggesting that Apple would supply infotainment systems to any interested auto manufacturer? It is less likely that Apple becomes an automotive supplier than Apple manufactures the entire car. First, Apple believes you can not make great software without manufacturing great hardware. The same reasons Apple never licensed it's OS for computers, cell phones, tablets, etc. would be the same reason Apple would not write software for multiple automakers and multiple product lines among multiple manufacturers. Second, no auto manufacturer would enter into an agreement with Apple unless it was exclusive. GM would not hand over the keys (no pun intended) for the entire infotainment of a car (or product line), knowing that a competing manufacturer has the exact same OS. Point is: it dilutes the auto manufacturers brand and elevates Apple's brand. If the consumer values infotainment and "connected car / autonomous driving" features, it become much more difficult to differentiate your brand once you hand over the infotainment to Apple. Third, Ford and Microsoft tried this dance (to a much limited extent) with Sync. And for a variety of reasons, it failed miserably, but one of the reasons is both Ford and Microsoft did not run 100% of the car through a microprocessor (the same way Tesla does with the Model S). To be truly successful as an OS or infotainment supplier, the auto manufacturer has to give full reign to Apple. I simply do not see that happening. And if it does happen, it will only be one manufacturer.
Another reason Apple will never be an automotive supplier is Apple's value of design and engineering. There is zero chance Apple partners with the majority of the automotive car companies operating today. Very few would satisfy Apple's requirement from an engineering and design standpoint. Does Apple green light their technology in: a Chevy Cruze? a Ford Fusion? a Toyota Camry? a Honda Civic? an Acura? My point is: Apple wants a car to look stunning. So, the field is limited to the usual suspects: the German automakers (Audi, BMW, etc.), Porsche, Tesla, etc.. Now, if Apple pursues 100% EV, the field dwindles in a heart beat.
What does Tesla bring to the table? They are the only manufacturer that currently produces: 1) A 100% EV with non-compromised range (85 kwh and 60 kwh and a fast charge network) 2) an objectively well engineered car (from a safety stand point) 3) a subjectively well designed car (the car looks awesome) 4) has an industry leading infotainment system (100% 17 inch touch screen, etc.) 5) has a current charging infrastructure in US, Asia, and Europe. 6) has built an EV from the ground up (S and X) and is currently engineering another EV platform from the ground up (Model 3). 7) Would be willing to improve any and all aspects of their automobiles for mass adoption (i.e., Tesla would hand the keys over because they share the same vision).
This is my 100% speculation (because, hey, why not). I believe Apple previously approached Tesla to either acquire them or to pursue the business idea laid out above (supply Tesla with infotainment, etc.). If there was any acquisition talk, it clearly went no where because the number was too low (at that time). And if Apple offered to build an infotainment, Elon turned down that request because the automotive industry set the bar very low in the infotainment arena. Not to give Tesla a backhanded compliment, but they did not need Apple or anyone's help to manufacture an industry leading infotainment system. Now Elon sees Apple has real interest in the EV / connected car / autonomous car market, and he would like to reengage. And that's what is going on right now. That's my speculation.
The only real question is: does Apple want to participate in the EV market? If the answer is yes, I do not see any scenario that does not involve Tesla.
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One other thing to consider is Tim Cook's ego. His success running "Steve Job's company" has been excellent, surpassing many of the naysayers when he took over. But until he puts a signature achievement forward (and it's not Apple Watch) he will be 2nd fiddle, Sancho Panza to Jobs' Don Quixote. You can't tell me he doesn't have his full share of ego, and he is also one of the first openly gay major CEOs. Legacy is a question. Fundamentally altering the energy and transportation systems would do the ticket. Elon doesn't need full credit, he will get enough as first mover and first governor of Mars. An Apple/Tesla partnership (not purchase) similar to Google's investment in SpaceX and SolarCity would be formidable.
Which begs the question, if Google owns 10% of SpaceX and invested $300 million in a venture fund with SolarCity, why haven't they done a deal with Tesla? Is Elon going in a different direction - and using side deals with Google to ramp up the pressure? I think someone is going to bite, Google or Apple, or FoxCon....because someone is going to have to build a bunch of gigafactories, and there are better ways to do that than 1 at a time, pay-as-you-go.
Which begs the question, if Google owns 10% of SpaceX and invested $300 million in a venture fund with SolarCity, why haven't they done a deal with Tesla? Is Elon going in a different direction - and using side deals with Google to ramp up the pressure? I think someone is going to bite, Google or Apple, or FoxCon....because someone is going to have to build a bunch of gigafactories, and there are better ways to do that than 1 at a time, pay-as-you-go.
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stealthology
Member
Give me a break. Apple has accomplished a lot during Cook's tenure. Aside from the obvious continued success of the iPhone, Apple will be entering the paid on-demand music streaming space later this year and have it bundled with iOS; this is the future of music. Also, give the Watch a year or so; hospitals could be a major sales driver in itself. 14 of the 23 top hospitals have pilot programs running right now. Are you familiar with all the apps being polished off right now and/or in development right now for the iWatch? If you aren't very familiar with them, I don't think you can judge it. Let's wait and see how it does.
Not to mention ApplePay, the IBM partnership, a new TV product, potential electric car (I have my doubts), HomeKit/HealthKit. Sales in their app store rose 50% in 2014. That is pretty incredible. You know what's even more incredible: The iPhone accounted for 89% of all smartphone profits across the globe in Q4Y14.
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Wow....feel like I hit a nerve. Not even going to respond, comparing some new apps in the store or building on what PayPal did over a decade before and putting it on the same level as the IPhone, IPad or Tesla....here lies Tim Cook, he took technology and made it better and made buckets of money. RIP. He has hundreds of Billions of dollars, I have confidence based on his many principled stances that he will do more with it than refine existing music delivery systems or build pretty watches. Just my opinion. Please feel free to take as long of a break as you need.
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