If you asked around 10 years ago what people thought when they heard the word innovation most people would come back with tech giant Apple.
Under the rule of Steve Jobs, Apple was one of the great tech innovators, a company focused on user experience.
Because of Apple we had an explosion of smartphone technology that hit the market which has completely revolutionised the way we communicate with each other on a daily basis.
But ask that same question today and you’ll hear one name and one name only: Tesla.
The automaker company is as innovative as its namesake in the realm of automation and car technology, and its CEO Elon Musk is a figurehead of future innovation.
Apple, meanwhile, is roundly regarded as being in an innovative rut, a slump from which they don’t seem to be able to get out.
One thing is for sure, Apple know how to build hype for their products, and they know how to get people to buy their stuff, but Tesla know how to push the envelope when it comes to technology.
That’s why the marriage of Apple and Tesla would be one made in heaven.
Tesla’s creative innovation does come at a price: cost. Tesla is transforming a handful of sectors, and that R&D doesn’t come cheap.
Tesla as a company is actually losing money but investors are still incredibly keen to work with Tesla because of the promise of future innovation.
The company has fluctuated for years, and its unstable financial position is one of the greatest burdens Musk faces as CEO. He himself has said that going public has created more financial instability than he would like.
So we’re currently in a situation where Apple is down on innovation but up on profits. How much longer will that last?
We already know that Apple isn’t the frontrunner in markets like it once was. A 2017 Tablet Satisfaction Survey found that customers like Microsoft’s Surface tablets more than they like iPads.
It’s only a matter of time before Apple’s marketing genius begins to wear off, and the profits begin to decline in the face of better, more product driven options become available.
Customers can only be fooled for so long that a bigger screen and a new colour are actually innovations that justify the ludicrous price point of the iPhone.
But if you put Apple and Tesla together, then the tech giant will be able to innovate in the way it used to.
The diversity of the innovation would also be key to the success of an Apple-owned Tesla. With the financial backing of the company, Tesla would be able to not only drive forward innovation on existing lines in development, but branch into other technologies and other markets.
In short, what Apple offers Tesla is the financial stability to be able to satisfy customers on a wider breadth of technological projects. And what Tesla offers Apple is the possibility to stay at the forefront of markets in which Apple will slowly start to see itself lagging behind.
It’s hard to see a deal where Tesla would accept if Musk weren’t CEO. And quite frankly, wouldn’t that be a great thing?
Maybe not for Cook, but with Musk, a charismatic and media-friendly leader at the helm, Apple could again become the cultural bastion of innovation it once was.
If you’re thinking the deal will never happen, then think again. Apple is planning on bringing back an estimated $250 billion into US companies which it originally had overseas.
Even after they’ve paid tax, that is an awful lot of money, and more than enough to cover the acquisition of Tesla for the estimated market cap of $60 billion.
So there’s no real reason why the two couldn’t become one, we’ll just have to wait and see.
