Why Tesla need Apple and Apple need Tesla

Tesla are losing money at an incredible rate. According to The Verge, they lost around $785 million in the first quarter of 2018 and are down to cash reserves of only $2.7 billion, after starting the year with $3.4 billion. If they carry on at this burn rate they will run out of cash and have to file for protection by the close of 2018.

Apple, on the other hand, are making money like it’s going out of fashion. In the last quarter of 2017 they made a profit of $20.1 billion. This leaves them in a position where they have retained profits of $91.9 billion.

But when did Apple last create anything that was truly disruptive? The iPod, the iPhone? maybe the Apple TV?

All of their recent lunches have been derivations, not innovations.

Their launches over the last number of years have been dull to say the least. But there’s little doubt they design some of the most sought-after products in the world that carry an incredible premium price.

On the surface this is similar to the Tesla.

It was a disruptor in the passenger car market and their Semi is sure to disrupt the market for Heavy Goods Vehicles. If you’ve ever driven a Tesla, it’s hard to argue that they are anything other than quick, but their fit and finish is poor. It’s nowhere near as good as the products coming in from the German manufacturers Audi and Mercedes and a long way behind the British designed Jaguar iPace – All of which will match the Tesla for range in the next few years.

The Jaguar iPace at the Electric Innovation Centre in West Bromwich UK
The Jaguar iPace at the Electric Innovation Centre in West Bromwich UK

When these products hit the mainstream market, they will have a serious impact on Tesla sales. The competitors’ products just look and feel better. The one area Tesla continue to lead is in their battery technology – which for me as an iPhone owner, is another serious Apple weakness.

So Tesla need design input, they also need cash – desperately if they want to continue to compete. The interior of the Tesla is just plain bland and for me, cars like the Model X are different, but ugly and overcomplicated. The gull-wing doors are schoolboy stuff, designed by someone with a Countach poster on their wall as a kid. For me, they have no place in the real world.

Apple need to advance their battery technology and look for an outlet for their cash that is going to give their shareholders a long-term return. We know Apple are working on a car, it’s been leaked all over the place. When Apple do eventually launch, are they really going to be satisfied with the standard charging system available to everyone else?

The answer has to be no.

They even had to design their own charging plug and headphone socket for their phones!

The Tesla charging network is already worldwide and can deliver charge at exceptional rates.

Tesla Model S recharging

We know that Dyson, who have some of the most advanced motor technology, are working hard to produce a car too. Autocar have produced their own drawing of what this may look like here. It’s quite cool and they could again come in as another disruptor to the car market.

Dyson car by Autocar

So for me, Apple and Tesla throwing their technology and design together will be the perfect match. Working together with Apple’s cash, will leave them both in a considerably stronger position than the sum of the parts.

I’m not sure which of the stocks to advise investing in, but maybe wait until Tesla tanks a little further and then swoop in, as if Apple come to town with the Tesla, it is going to be a world beater and every major car manufacturer needs to take note.

They are two brands that have made their name for innovation. Their brand values overlap in almost every way and there doesn’t seem to be anything that would stop them working together apart from some bloody-mindedness from Apple because the existing Tesla model range wasn’t their initial concept. To me though, it seems like their innovation and their organisational culture – such as single-minded strong leader, obsession with detail, being a massive disrupter in new markets – are completely complementary and both need each other to grow to the next level.

So, watch this space. It’s going to happen.

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Sony are claiming they’re going to do an ‘Apple’

I know I’m going on about Apple at the moment, but they do seem to be in my life a lot for all sorts of reasons.

I read today on Brand Channel that Sony are trying to become a ‘lifestyle’ brand alongside Apple. In the article Sony’s Executive VP Kazuo Hirai said that if they can offer movie downloads, game downloads and other entertainment, this would be a point of difference that is not available anywhere else.

What?

Sony are officially a Kevin Roberts Lovemark. One of those brands that we love over and above all reason. But this is evidence to me that they have totally lost the plot and are not just following the (Apple) market leaders, but they are a mile or two behind. Sony, when they launched the Walkman, created and defined a sector from scratch with the world’s smallest cassette player.

Apple’s iPod then came and took the whole sector from them, when they redefined the portable media player sector.

Sony have 33 million PlayStation users across the world, all of them plugged in to a wired or wifi’d world. It would seem a far stronger bet to build on this as a point of differentiation than trying to do it through their Bravia TV, Cyber shot cameras and e-readers, which are all a bit ‘me-too’ at best.

If they created a rental or fractional ownership system for games, entertainment, movies and music via the PS3, they would be onto a far more differentiatable (if there is such a word) product and one that has 33 million headstarts.

Otherwise for me, its Apple all the way.

I can imagine Apple launching a wifi TV – they already have a device that slings your picture from your mac to your TV, a wifi camera (that will be the iPhone 3gs then) and you can already read books on the iPod Touch/iPhone.

Sony have become a follower. They used to be radical. Lovemarks do radical things. Sony need to do something radical again, or they are in danger of us falling out of love with them little by little.

Do you think Social media is a fad?

I saw this article on Mich Slack’s blog yesterday and had to add it to my own stuff. It is a truly amazing short video that will scare the living daylights out of you if you think that social media is a fad.

One highlight for me is this:

Radio took 38 years to get to 50 million users

TV took 13 years to get to 50 million users

The Internet took only 4 years to get to 50 million users

and the iPod took even less time at only 3 years to get to the magical figure of 50 million users

Facebook reached  100 million users in 9 months and now growing at over 600,000 users per day. It now has over 300 million users.

Watch it and weep if Social media isn’t already central to your brand planning.

Even further on than this, Google is becoming too slow as it isn’t real time whilst Trendwatching are predicting that ‘Nowism’ is our new future. Read their own amazing download here and then subscribe to get it every single month.