Apple\’s Next Big Thing: A Tesla in its Garage?

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\"Tesla_Apple_Rev1\"To borrow from Ted Levitt’s thesis on “marketing myopia,” Apple is not in the digital “iDevice” business, and Tesla is not in the automobile business. They are both in the technology business; or better yet, in the technology disruption business – or, even better than that, one might say they are in the “Internet of things” business. Take your pick. But for sure, they are in the same visionary tech space. Once Tim Cook and Elon Musk realize this more expansive definition of the businesses they are in (and, I have to believe they have probably already figured this out), the scope of industries, products and services they can pursue for growth is almost limitless.

And once the realization sets in, an “aha” moment should not be far behind. I’m talking about the uber “aha” as the most ingenious acquisition of this young century: Apple acquiring Tesla. It’s significant to point out that part of Mr. Cook’s vision for Apple is his publicly stated intent to break into other product categories. The strategic logic of such an acquisition and the resulting synergy for these two technology giants is, in my opinion, obvious.

Big Bucks Looking For Something New and Big

Tim Cook is under enormous pressure from activist Carl Icahn and Wall Street in general to launch the “next big thing.” Sorry, acquiring Beats just doesn’t do it. Nor do incremental improvements or wearable gadgets and gizmos. “Big” is like visionary big, like Tesla big, and Apple’s got a big enough pile of cash to pull it off (about $150 billion, and a market cap of about $500 billion), compared to Tesla’s market cap of around $22 billion.

And,there should be some urgency for Cook to move quickly. In the technology space he occupies, there are disrupters lurking around every corner. Giants like Samsung, Google, Amazon, eBay and more, are all tripping over each other as they race to win dominance in a multitude of industries. And of course, another Mark Zuckerberg could pop up at any time to create entire new worlds overnight.

So Mr. Cook needs the next big thing, fast. And Tesla founder and CEO Elon Musk needs to “get big fast,” and he needs an enormous amount of capital to do so. Even while he is doggedly pursuing a breakthrough for a “disruptive” battery, Musk must scale manufacturing plants and a network of electric charging stations across the US.

The Internet of Things Synergy

Both companies are pursuing the \”Internet of things,” connecting the real and virtual worlds. Apple is expected to launch a “smart” television, which will make it easier to find, select and pay for content. This would be just a beginning into the race for the connected home. We’re looking at a future of smart appliances that talk to us, organize our lives, enhance our security — plus more.

Many experts say Apple lost an opportunity to advance more quickly in this space had it acquired Nest, which rival Google snapped up earlier this year. By way of context, the co-founder of Nest, Tony Fadell, designed the iPod in 2001 for Apple. So, Nest and Mr. Fadell might have been a big miss for Cook.

Musk is also challenged by perfecting the supply chain to efficiently scale the production of vehicles. Enter Tim Cook’s brilliance in logistics and supply chain optimization.

While Apple is pursuing the Internet of home, Tesla is the poster child as the Internet of automobiles; this “smart” car is totally connected. The synergy would spark the merger of two different industries, both in the technology business and each with equal genius power in design and the Internet of everything, in the home and on the road. The merging of the two would indeed result in one plus one = infinity.

The Gift With Purchase

Finally, if Apple acquires Tesla they will get a gift-with-purchase (GWP), to borrow from a popular retail concept. The gift is Elon Musk, who many experts and members of the “power and intellectual elite” believe is a Steve Jobsian-like visionary genius. And it’s kind of hard to deny that description when one considers his visionary disruptive automobile and the advancements he’s made in rocketry (SpaceX and his ultimate vision to populate Mars with the human species). Musk was also a co-founder of which became PayPal, plus he developed and proposed a concept for a high-speed train between Los Angeles and San Francisco that would be totally solar powered.

So, this so-called GWP might be the most important asset that Apple could gain in such an acquisition.

Fortune Magazine named Elon Musk its 2013 Business Man of the Year for all of the above game-changing innovations. As Chris Anderson, curator of TED and founder of Future Publishing and Imagine Media (home of Business 2.0), which expanded to more than 100 publications, said in an article he wrote for Fortune: “You\’d say Elon Musk was crazy, except that he has an unnerving track record of turning his dreams into reality.”

Anderson goes on to compare Musk to Steve Jobs: “When you look at the incredible range of his endeavors and search for recent comparisons in the business world, only one emerges: Steve Jobs. Most business innovations involve only incremental improvement. And of those entrepreneurs lucky enough to succeed with bigger ideas, the large majority then stick to their industry sector for expansion and consolidation. Jobs and Musk are in a category all their own: serial disrupters. It is no surprise, that Musk has often been referred to of late as the next Steve Jobs.\”

He goes on to reference disruptive breakthroughs. “Jobs created the world\’s most valuable company, and along the way transformed at least four industries (computers, music, animated movies, mobile communications). Musk may achieve even greater impact.”

Anderson goes deeper and argues that Jobs’ and Musk’s genius go beyond their ability to disrupt industries. He says: “So what is their unique brand of genius? Here\’s how I think of it: system-level design thinking powered by extraordinary conviction.

“To appreciate Jobs\’ and Musk\’s contributions, you must pull the camera back. What they did uniquely was to imagine the broader ecosystems in which those products could become transformative. To do that involved an intimate understanding not just of the technology, but of what would be necessary in design, logistics, and the business model to launch those products and make them truly compelling to potential customers. You can describe both men as amazing designers. But their design genius should be thought of as not just an obsession with satisfying shapes and appealing user interfaces. Those matter, but the start point is broader, system-level design. Most innovation is like a new melody. For Jobs and Musk it\’s the whole symphony.”

In other words, both of these visionaries had one vision: the consumer. Their genius is in understanding not just the technology, but more importantly how all of it could come together as a “symphony” that would provide awesome, game-changing new benefits for the consumer. Jobs was, and Musk still is, the bridge between the engineers, the technology, and all of the intricate pieces that must be imagined into their products, and then orchestrating the integration of all of it into profoundly delightful and useful new products.

Anderson then goes on to explain in great detail the similarities in both Jobs’ and Musk’s relentless, almost insane conviction to defy gravity, physics, proven barriers, and everything else in the universe of knowledge that told them their vision could not be achieved. For the entire article and further detail on the similarities between these two giants read this article on CNNMoney.

So, is Elon Musk, aka Steve Jobs, really a “GWP?” If Tim Cook could stomach the thought, how would he organize and define titles and roles for the insertion of another visionary genius into the Apple ethos? And on the other hand, would Musk have big issues with such a combination? On a practical level, Cook has indicated pursuit into other industries and products, and Musk could use the electricity-charged capital infusion (pun intended).

Egos aside, I would think they both could see the potential win-win for the merger of two giant serial disrupters.

What About the Brands?

The top ranking brand worldwide in 2014 according to ranking firm, SyncForce, is Google; Apple is ranked second. Tesla is not ranked in the top 100. While this firm, and its ranking model, may be refuted by dozens of other firms that conduct these kinds of studies, the distance between the two brands would likely be similar.

My point is, given the global power and awareness of the Apple brand, it would seem strategically smart to replace Tesla. Can you imagine the Apple logo as a hood ornament? I can.

Apple cars and perhaps spaceships and high-speed trains might have a seductive ring in Tim Cook’s head if he thinks about it really seriously. And Elon Musk might just love the idea.



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