The Apple/Tesla Dream Team
Feb 23, 2015 5:00 AM PT
Like many, I think the best path would be an Apple/Tesla combination, but since I doubt Tim would want to work for Musk or Musk for Tim, the only real option would be an office of the CEO for both firms. The two men would be peers, but Elon would be the visionary, taking Jobs' old spot, and Cook would be in charge of execution. That's something he has done exceptionally well at Apple, and Tesla could use some help with it.
I'll share some thoughts about the Apple/Tesla Dream team and end with my product of the week: a heart monitor that does something no other tracker does -- it measures stamina.
What Apple Needs
If there ever was doubt that Tim Cook could run Apple very well, it largely evaporated after Apple reported outstanding results from its last quarter. The only remaining problem is whether Apple can open up new product categories like Steve Jobs did with the iPod, iPhone and iPad. In all three cases, the related markets were very different before Apple entered and effectively took them over.
MP3 players were largely a mess of DRM (digital rights management)-strangled devices with a mess of software that required a combination of skills and pain tolerance that most weren't able or willing to handle. Apple entered with best-in-class usability at a high price, and eventually it owned the market.
Smartphones were all over the map, with a wide a mix of keyboards and screen designs as RIM (now BlackBerry) and Palm effectively owned the market. Apple took a design that hadn't been successful and made it so popular it effectively drove everyone else to its design, pushing Palm out of business and almost doing the same to BlackBerry. To this day, Apple largely owns the premium side of the smartphone market, and its iPhone is still considered the most powerful device in the segment.
Tablets were a mess of readers and Windows tablets that few seemed to want to buy until Apple entered with the iPad, an easy-to-use product that took the iPod/iPhone concept to larger screen sizes. It was basically an iPod touch with a huge screen, and folks flocked to it like ants to sugar.
It never really stepped up to its promise of becoming a true productivity tool, which is why Chromebooks in schools and the Microsoft Surface tablets in business have taken back some of the initial momentum. Also, Amazon has done a better job with readers, which is why the Kindle has done far better in the small form factor class. Still, the full-sized iPad it is the gold standard for pure-play tablets.
Of the three products, the iPad is having the greatest competitive difficulty, and the newest version -- the iPad mini -- is struggling like no strategic product from Apple ever did, under Jobs, this late in its product cycle. Note that the iPad mini was not a product Jobs seemed to want to build, because Amazon already had stabilized the small tablet space with the Kindle, making that market far harder to turn to Apple's benefit.
Now Apple faces the launch of its new Apple Watch, and while this market looks far more like the initial iPod, iPhone and iPad segments, what sales there have been have focused on health and exercise. Apple had promised to lead in this area, but word is that it has had to pull out most of that functionality. This could lead non-Apple fans to choose something else (Apple fans will buy most anything from Apple) unless they are convinced this is a new, must-have magical device like the iPod, iPhone and iPad initially were, according to Steve Jobs.
Apple needs someone who can sell a dream -- and that just doesn't seem to be in Cook's skill set. Honestly, outside of Musk and Jobs, this doesn't appear to be in any CEO's skill set.
What Tesla Needs
Tesla really is mostly a one-trick pony. It has the Tesla S, which has been successful in California -- mostly around Silicon Valley, where the damn things are as common as Toyotas. However, it has struggled out of state, particularly in the middle and eastern parts of the U.S., where dealerships for older car brands are largely owned by politicians.
These politicians have passed laws blocking Tesla's storefront sales model, which customers seem to prefer, making me wonder where the hell the federal government has been, since it is that body that is supposed to protect against unfair competitive practices and the illegal use of political offices to further personal wealth.
Given the federal government also has invested a significant sum of money in Tesla, you'd think it would be more aggressive in protecting the company from self-serving politicians.
Tesla was supposed to have its Tesla X out by now, and it's not as if people aren't lined up salivating over that car. However, getting advancements like replacing side mirrors with rear-view cameras through the DMV has proven nearly impossible at a time when others are road testing, with permission, far more risky self-driving cars.
Musk's time is now split between three major efforts -- Tesla, Space X and, most recently, the Hyperloop. So Tesla is long on vision, but it could use some real help in execution.
In addition, the Tesla stores have little to sell to those who just walk in to check out the cars and are unable to buy one.
Cook vs. Musk
Cook is executing better without Jobs than he did with the guy -- but he isn't a visionary, and he has trouble getting people excited about Apple's newest offerings. Apple is running into headroom problems, as there are few areas where it can expand that will accept the huge margins Apple investors are addicted to.
Musk has the chops to bring out amazing new technology and get people excited about it, and he clearly gets the Jobs' business model -- he emulated it with Tesla -- but he needs a ton of help with execution. Also, Tesla needs things it can sell to more people than a US$75K car.
Both companies have the highest customer satisfaction in their segment.
I've actually never seen a combination that looks better on paper than this one: no product overlap and complementary executive skills.
Whether the two firms hook up or not, it is clear each could benefit a lot from picking up skills from the other. Actually, they have been trading employees a lot of late.
Apple needs to expand into another high-margin area, and Musk needs more stuff he can sell in his stores, along with a lot of help in execution.
I also think Apple could help Musk overcome the laws blocking him from entire states, because Apple could threaten to pull its stores unless those laws were reversed, and Apple users -- the most powerful user group on the planet -- likely would go to war on their behalf.
Together, both companies would be far stronger than they are alone, and that is the best justification for a merger.
Product of the Week: GoMore Fitness Monitor
I'm a big Fitbit user, and it is an excellent product if you are simply trying to stay in shape. (Mostly because if your wife has one, she will constantly rub her better stats in your face, which is extremely annoying). However, if you are competing, neither Fitbit nor most other fitness monitors does a good job of optimizing that training. To do that, you need to measure stamina, because that is what you most need to increase. Knowing your stamina allows you to push your limits.
I had a chance to chat (via email) with Masa Lai, a renowned triathlon coach in Taiwan, who helped refine the GoMore Fitness Monitor, which uniquely measures stamina.
Measuring stamina is important when you are looking to optimize an athlete's performance, because a number of factors -- like sleep quality and diet -- could impact it. Data on stamina lets athletes and coaches review workout sessions and optimize them by factoring in diet and sleep changes. They can then figure out which personal practices are helping or hurting the effort to increase stamina.
Even if you are just trying to optimize your daily workout for overall health and fitness, exercising at a 50 percent stamina level should provide the greatest benefit for the time spent, Coach Lai said.
With just my Fitbit heart rate monitor, I have a hard time telling if I'm working hard enough or too hard. Focusing on stamina (which automatically adjusts for improving fitness) should deliver faster results. Having a coach yell at me when I'm slacking off definitely would help too.
Generally I'm not a fan of chest-mounted fitness monitors, but the GoMore does more, and that is why it is my product of the week.