What if Tesla and Apple Merged?

By Rob Enderle February 18, 2014

While we are likely putting too much significance behind the meeting between Elon Musk, Tesla’s founder and CEO and Adrian Perica, Apple’s Mergers and Acquisitions chief, the combination of these two unique firms could actually be pretty interesting.   I personally think the meeting had to do with partnering to acquire something that neither firm could afford separately; the combination of both firms could result in something far more powerful than either firm separately could accomplish.

Let’s explore what Tesapple might look like.

Synergy

Neither firm could really afford to buy the other - though Apple could, with leverage, get it done.  However what would be more interesting is a simple pooling of assets, or a merger of peers.  This is rarely done these days but in a world where a company the size of Dell can go private, it is far from impossible. 

Both firms sell from store fronts placed in high traffic affluent shopping malls.   The Tesla showcase could be placed in a corner of an Apple store with cars housed offsite for test drives much like they are now.   Unlike the major car brands in the U.S., Tesla doesn’t maintain an inventory of cars you basically order what you want and around 4 to 6 months later you take delivery.  In addition, Tesla is basically a car wrapped around a very large tablet like display which has been hampered by a lack of third party apps.  This last item, Apple certainly could address.  

Ever since Apple changed their charging plug, they have been losing their near exclusive footprint in cars.   Most cars now connect to any phone via Bluetooth and that has removed one of Apple’s significant and unique competitive advantages.  Wedding iPhones to Teslas would allow both firms to use a richer set of capabilities in both devices and they could do joint sales projects bundling an iPad with the initial car purchase and providing color matched and co-branded tablets and phones for Tesla drivers.  This is something Apple would likely not allow unless Tesla was part of the Apple family.  

Every iPod, iPhone, and iPad user suddenly becomes far more interested in becoming a Tesla buyer and, while the numbers are vastly smaller, every Tesla user would then favor Apple iProducts.   Both companies sell on status and exclusivity to a point and those that had both a Tesla and an iProduct would be noticeable (assuming co-branding) whether they were in a Tesla or using that iProduct.    

This should drive sales for both companies- though given Apple’s reach it probably would help Tesla more than Apple.

Replacing Steve Jobs

It has been clear since Steve Jobs passing that Apple is lacking a certain magic.   That magic is likely connected to Steve Jobs’ ability to husband products and then pitch them to an audience of fans.   In market the only other CEO that seems to have this draw and capability is Elon Musk and he is arguably stronger with technology by far than Jobs was.   Musk gains breadth to create products he has likely imagined but can’t push though his existing companies and Apple gains an executive that can wow an audience and come up with amazing audacious ideas.   

Cook and Musk would likely make good partners as Musk likely doesn’t enjoy the day to day repetitive duties of a CEO and Cook has never shown an affinity for either innovation or pitching products.    These two men would likely dovetail even better than Cook and Jobs did because Musk, while somewhat difficult to work with, appears far more even tempered than Jobs did.   As a team, the whole should be greater than the sum of the parts.   Now that’s Synergy. 

Wrapping Up:   Maybe…

The difficulty would come down to sharing power, neither man would want to be seen as taking a demotion and structuring a deal that both would except and allow the merger to go through would be incredibly difficult.   Musk, because he is running several companies now, might be willing to take a support role but in so doing he’d weaken his impact and the winning combination for Apple was the product guy setting and driving strategy.   This is very difficult if you aren’t in charge.   

Still the combination of both firms could result in something truly amazing and while I do think it more likely they partner to buy a battery or Super Capacitor Company, once these two CEOs start working together, they could easily form a professional ‘bromance’ and the wedding would be glorious.  




Edited by Stefania Viscusi

President and Principal Analyst, Enderle Group

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