Apple was a revolution. So was Tesla. Both in their respective industries, though. Under Steve Jobs, Apple became the leading smartphone brand, with constant innovation. Even after his demise, Apple has kept it up, with bringing new technology and upgrades to its users. Tesla is a similar deal when it comes to the car industry. One of the world’s current, leading entrepreneurs, Elon Musk has not only shown his magic through Tesla but also through SpaceX and his former project; Paypal.
But economic growth is cyclical. And Apple has had its boom. For a while now, we’ve seen it recede before our eyes. Hence, there are expectations of a soon-to-occur, slump period for Apple. Except, it might not be recoverable.
One of Apple’s strengths is their marketing. They know how to put people on their toes, ready to throw their money at the next release of a product. On the other hand, the strength of Tesla lies in making the impossible, possible. Or at least close to.
Congrats and best of luck to these year 4 students at @SheridanCollege, kicking off their app development projects built with Swift. / Félicitations et bonne chance à ces étudiants de 4e année du @SheridanCollege, qui lancent leurs projets de développement d’app avec Swift. pic.twitter.com/2oqrpe9I18
— Tim Cook (@tim_cook) January 23, 2018
What one has, makes up for what the other lacks. It’s like Apple and Tesla were made for each other. If they tie the knot, it’ll be a Win-Win situation.
But there is never such a thing as free lunch. Tesla may be the god of innovation. But it is an expensive god. Quality comes at a price. And we’re talking about auto motives, here. Not just any auto motives, though. Electric auto motives, alongside energy storage solutions and solar panels. All of these don’t help the costs of production.
Musk has repeatedly put light on Tesla’s instability when it comes to financing. He claims that this is happening because Tesla went public. Currently, though, Tesla isn’t looking for an increase in its capital. The issue is making these cars in a way that they become affordable to its consumers. It is also struggling in building a market for itself. The brand has 400,000 mostly unfulfilled pre-orders of the Model 3 mass-market vehicle, currently slowed down by production bottlenecks.
Tesla can’t go back to becoming entirely private, and neither are there many companies that can afford a brand like Tesla. But for a while now, there has been a talk about selling Tesla.
Enter Apple. Apple, even after paying its taxes, had a huge chunk of money left behind. Apple is planning on bringing back an estimated $250 billion into US companies which it originally had overseas. Even with their receding innovation, their profits are shooting. Yet, there surely is severe apprehension about Apple making a proper comeback on its own.
Yes, the company does magical marketing. But soon enough, Apple won’t have anything new to market with. When consumers realize that a new color, a bigger screen, and a smaller width are not worth the expense, profits are going to drop. What Apple has right now in the bank, is greatly sufficient to cover the purchase of Tesla for its market capital of $60 billion.
A recent Rolling Stone journal, published by Neil Strauss (who made a name through his book on PUA culture), really shed some light on quite an interesting idea. The piece was an interview with Elon Musk, where the entrepreneur admitted: “I wish we could be private with Tesla. It actually makes us less efficient to be a public company.”
Neil Strauss followed Elon Musk for nine months – the result is the #Tesla visionary’s most revealing interview in the Times magazine, available for one day only last Saturday. Missed out? Get it at https://t.co/R5h7mmwoUI pic.twitter.com/61l5NaTi4s
— The Mag Shed (@TheMagShed) November 27, 2017
Not everyone agrees with this idea, though. Tesla’s current market capital is about $60 Billion. The original share that was at $20 has now grown into a good $400. All of the foremost investors have by now, bagged a 1,200% return. The directors of the firm foresee Tesla as acquiring a $650 Billion total capital.
Now, even though, Apple has had a history of buying firms, it is usually – and more recently – smaller ones. Beats was Apple’s biggest purchase – $3 Billion in 2014. If you think that’s big, consider Google’s payment of $12.5 Billion for Motorolla and $26 Billion for LinkedIn. But analysts think that Apple’s huge overseas money return might just push it to buy Tesla.
Putting the two brands together will mean, bringing innovation and marketing together. The ultimate giant will be diverse, extending its production over a variety of technologies. Apple will become the stable finance that Tesla so desperately needs. And Tesla will be the one bringing new things to the table, as to not let Apple vanish completely.
But here’s another important thing: Who would be Tesla’s CEO? On one hand, Musk’s history and returns with the company press on keeping him as Chief. But on the other hand, we can claim that he probably has too much on his hands. Especially with his work on SpaceX, the vision to take a revolutionary rocket, and consequently mankind, to Mars.
It is speculated that Cook may not negotiate a deal if the terms include keeping Musk as CEO. But having Musk may only bring Apple back to its former high. Especially, with Musk’s nerdy charm and popularity in the media.