I don’t know you personally, but from my tiny little nook of the universe, it’s pretty clear you are one of the good guys.
While Apple’s moral record is not spotless (is anyone’s?) you and the company you lead have done a more steadfast and intellectually honest job standing for privacy rights and human freedom through the dark turns our nation has taken than pretty much anyone else at your level.
In fact, you and Apple have been so far ahead of your peers on many of the most important moral questions facing the giants of our industry that, on the moral track, it’s a bit like you’re Usain Bolt and they’re the other ones in this image:
On top of all that, it’s probably safe to say that no person in the history of industry has designed a more elegant and effectively-managed manufacturing and distribution operation than you.
You are a master watchmaker of the highest order.
And while we’re still on the praise part, Apple under your leadership has shipped a few fantastic things.
- The Airpods + the LTE Apple Watch is a potentially life-changing combo. Just one week in, I feel profoundly less psychologically tethered to my iPhone–which, for all its technological wonders and functional benefits, has become the enemy of my focus, a destroyer of presence in social situations, and an intruder on the stillness of life’s mundane moments.
- The steady, tick-tock pace of innovation in display technology, cameras, image-processing algorithms, and homegrown silicon. Every year, Apple’s displays, your A-line of processors, your cameras, and the software that makes all of them sing in harmony get better like clockwork…and you still manufacture and distribute millions and millions of them every quarter.
- FaceID, ARKit, and all that remarkably miniaturized sensor hardware the team has put behind them. Yes, that notch on the iPhone X is a bit of an abomination, but the technology Apple has managed to squeeze into it is truly wondrous.
And if the only two metrics one used to evaluate your tenure as CEO were Apple’s annual profits and the increase in its stock price, it looks like a story of remarkable success.
But let’s be honest: all is not nearly as well as Apple’s profit numbers and stock price might make one believe.
To those of us with sharp eyes for the details of product design and a strong intuition for the direction of technology, the outward signs that Apple lacks a vivid long-term vision and that its once-relentless focus on the nuances of user experience has softened are undeniable.
I apologize for my bluntness as I count the ways:
- Missed the boat on voice-driven search despite a 5-year head start. Steve Jobs understood that a search engine that took voice input and completed tasks was the future of search. That’s why he acquired Siri when it was still an app on the iPhone 3GS. But then he died, development on Siri stalled, and Apple didn’t get serious about it until Amazon released the Echo and started eating that market.
- Let the train to the “Post-PC” era fall WAY behind schedule. When Steve Jobs first introduced the iPad, he promised us a “Post-PC” era, where iPads were most people’s primary productivity device and only power users (software developers, designers, videographers, hardcore gamers) used old-school PCs. But it’s been 8 years and, despite some baby steps in the right direction, the iPad Pro is far from a credible PC replacement for MOST people.
- Neglected the most important strategic niche until it nearly revolted. The collective sentiments that designers, photographers, videographers, and software developers share about your products is the canary in the coal mine. And that canary had stopped singing for a while before you seemed to notice that your “Can’t innovate, my ass” trashcan Mac Pro never even had product/market fit.
- The Macbook Pro Touchbar: Adding additional taps or clicks to something as routine as changing the system volume does not provide “a more intuitive, more immediate connection to (my) content.” It provides an immediate connection to feelings of annoyance and frustration.
- The first Apple Watch + WatchOS 1.0. The first release of Apple Watch had a whole bunch of confusing, redundant UX conventions. And look, I get it: Designing new interface paradigms the right way straight out the gate is really really hard. I certainly would fail at it very badly if I tried . But designing novel devices and creating new interface paradigms that “just work” is kinda supposed to be Apple’s whole thing, is it not?
I could go on here, but I won’t.
The externally visible problems suggest that what many suspected is true: When Steve died, Apple lost the 2/3 of the main ingredients of its insane greatness.
While the nature of Apple’s problems are complicated and worthy of exploration and debate, the root cause is actually quite simple: Apple no longer has a visionary product leader steering the ship.
This has been lot of words already, and I know you’re a busy man so I’ll cut (finally!) to the chase:
The single greatest thing you could do for Apple (and maybe also the whole planet) would be to merge with Tesla, make Elon CEO, and go back to doing what you do better than anyone else on Earth.
There is likely no one better than you at transforming the the world-changing visions of a brilliant visionary into world-class operational processes that can ship incredible things with stunningly few quality issues at breathtaking scale.
Elon may or may not understand this, but he and Tesla (and maybe SpaceX) need your gifts.
And Apple and you need his.
To make this all concrete, here’s a simple overview of why merging with Tesla and making Elon CEO would be the single best strategic decision you and could possibly make for Apple
I wish I could claim credit for this point, but my friend Justin David Kruger made it when he and I were talking about this exact question.
Justin needed only to point out two numbers to prove that he was absolutely correct that neglecting to acquire Tesla and put Elon in charge has been the biggest strategic mistake by far.
Those two numbers?
They are, respectively, Apple’s and Tesla’s current P/E ratios.
Despite the fact that Tesla is losing around $250 million per quarter (making its Earnings Per Share -$4.85) Tesla’s stock is currently trading at $345/share, more than 70x its earnings per share.
Meanwhile, Apple, whose quarterly profits range between $17–30 billion, is currently trading at around $156/share, just under 18x EPS, with a total market cap of $807 billion.
And while this is not a completely fair apples-to-apples (Apples-to-Teslas?) comparison, if Apple’s stock was trading the same P/E ratio that Telsa’s is today, Apple would be priced at $616.7/share. At $616.7/share, Apple would have a market capitalization of $3.18 trillion dollars.
Now, you could make the reasonable argument that Apple and Tesla have two profoundly different corporate cultures and that the odds of a successful merger would be low.
But you, Mr. Cook, are Tim Cook.
If there is anyone who could design and implement an operation that leverages the biggest assets of both Apple and Tesla while navigating the dicey parts, it’s you.
Because before Steve’s death, Apple had three insanely great strengths:
- The world’s most expertly-designed and well-managed supply-chain, manufacturing, and distribution operation.
- The vision, willingness, and ability to take the kind of bold risks required to bring the world into the future far faster than it would otherwise get there itself.
- An almost superhuman sense for the subtleties of product design and product marketing, a relentless insistence on perfection, and the salesmanship and charisma to make people BELIEVE.
It’s clear that you, Tim, are largely responsible for #1.
And it’s also clear that since Steve passed, Apple has lost most of #2 and #3.
Meanwhile: Tesla, driven largely by Elon’s vision and his ability to make people believe, is positioned to become the most important infrastructure company of the 21st century.
- A full-stack energy company, building batteries, solar panels, a supercharging network for automobiles, and a range of other core components for hyperlocal power grids.
- An all-electric automobile manufacturer, with its growing line of electric cars and soon, its electric busses and long-haul trucks.
- A data company, with tons of telemetry on every car, across its production lines, on its batteries, on its solar roof tiles, and so on.
With all of those things + some much better machine learning capabilities, Tesla is well on its way to becoming a mobility and logistics platform built around renewable energy, batteries, electric vehicles, data, and AI.
More than any other company, Tesla has the potential to disrupt the internal combustion engine and shift the economics of mobility away from personal car ownership.
And as this fantastic in-depth analysis by Tony Seba’s firm RethinkX demonstrates, those two factors alone could disrupt the economics of oil so profoundly that it would cease being profitable to extract it from the ground.
BUT (and it’s a BIG BUT): Other than a near-term catastrophic meltdown of civilization, the single biggest risk to Tesla’s success is its relatively weak operational sophistication.
The company routinely misses its production targets by very wide margins. Its cars, while technological marvels, suffer from lot of quirks, bugs, and other QA issues.
Those are all tractable problems, but to deal with them at the massive scale required to ship millions of cars, hundreds of thousands of busses and trucks, and tens of millions of batteries and solar panels every year is epically hard.
And if you could only call one person to help you solve a whole host of epically hard supply chain, manufacturing, and distribution challenges, who would it be?
I know my answer.
It’s you, Tim Cook. It’s you.
4 thoughts on “The dream of cooperation between Apple and Tesla A Parable of Visionaries and Operators ”
First of all: I’m the biggest fan of your writing. Ever. Not joking.
Now the brutal honesty:
Somehow the punch of your superbly written email got a bit watered down….actually I’m sure it was the opposite…when you condensed your 2,000 word essay into a 550 word email, the result was almost poetry. I’d treat this one as a draft, come up with a thousand word middle ground, and then publish it on linkedin or medium — your idea and scrivening could create the magical cocktail of virality. Then I could stop wondering why you never seem to get the notoriety you deserve.
PS: I agree with you a thousand percent.
Great feedback, Chris. I just went through and cut 400 words or so.
Great Article and will this happen , it will truly be earth shaking ….Apple and Tesla surely a great combination….