Tesla

Tesla, along with Apple’s recently announced CarPlay, are positioned to have a major influence for everyone planning to be driving a car in the foreseeable future. This is independent of whether or not you’re driving a Tesla or a car equipped with CarPlay.

Stuck in the (Technology) Dark Ages #

The auto industry has managed to remain uniquely positioned with respect to technology. Low to middle-end cars are the worst offenders, but in this class cost almost always comes first. Higher end cars are still behind, but not as far. You could argue that Ford has had their voice control service for a while now, other companies are on a similar trajectory, but the offerings are entirely underwhelming at best.

There has been no shortage of speculation since news broke that Apple’s M&A representative spoke with Elon Musk about acquiring the increasingly famous auto maker. Josh Ong has made a great case for why it might make sense, so I won’t duplicate that.

The whole issue has some red flags that stand out to me as pretty major reasons an acquisition wouldn’t happen.

1. The auto industry is a low margin industry, especially on the low end. Tesla is not yet competing in the lower end market, so their margins are likely much closer to Apple’s than Hyundai’s, but Tesla has plans to expand into the $30,000 arena where there is simply no way to have Apple-like margins.
2. The whole situation seems Google-y. Apple’s wheelhouse is making beautiful and simple computing devices. An entry into the auto industry, despite Jobs’ reported desire to do so, is un-Apple-like. With that being said, the auto industry is so slow to adopt new technology that it would be quite easy to disrupt.
3. Setting aside the magnitude of the purchase being vastly beyond anything Apple has purchased before, the fact that they couldn’t make this purchase quietly is worth mentioning. Apple tries to keep those as quiet as they can, this one would be making headlines around the world.