Open Letter to Tim Cook and Elon Musk on Why Apple and Tesla Need to Merge
By Danilo Kawasaki
Dear Tim Cook and Elon Musk,
As shareholders of both of your prolific companies, we at Gerber Kawasaki have a bone to pick with you two. It is time to put your egos aside and figure out a way to combine your companies into one awesome tech conglomerate. The world needs it, even if it doesn’t know it yet. After all, we didn’t know we needed an iPhone or a non-ugly, fast electric-car, like the Model 3.
The merger makes perfect sense. Apple lost its innovative soul when Steve Jobs passed away in 2011. Since then, Apple has failed to excite us with innovative, life-changing technology. The acquisition of Beats, an apple watch, and an underwhelming and overpriced homepod do not justify the billions of dollars Apple has spent in R&D over the last few years.
We imagine serial innovator Steve Jobs would not be happy to know Apple is now the biggest dividend-paying, share-buyback company in the world. Can you imagine what Elon Musk would do with all of the cash and resources Apple has? Elon would likely fill that void for a defiant, innovative leader and re-light the fire for true innovation at Apple.
Every Batman needs a Robin. Even though your personalities could not be more different, Tim Cook would form a great co-CEO with Elon Musk. Tim Cook’s calmer demeanor, disciplined approach, and conservative nature would contrast well with Elon’s brash impulsivity and arrogant ways. And your skills are also very complementary. Tim Cook has shown he can work well with difficult leaders and has expertise in supply-chain management, manufacturing, assembly lines, and logistics. Elon is a mad-genius visionary, who needs help in the operational areas Cook excels at.
From an Apple business perspective, the iPhone is no longer a growth story. The high-end, smart phone market has matured. It should continue to do well because of replacement cycles and a very loyal customer base, but Apple knows it needs to grow other areas of its businesses to reduce dependency on iPhone sales. Hence, project Titan. Apple’s autonomous vehicle program is one of the biggest known secrets in the tech industry. While Apple has yet to confirm anything, information about project Titan has been leaking out over the past several years. Steve Jobs himself admitted to considering entering the car market back in 2008 but put the plans on hold to focus on the amazing growth the iPhone was experiencing. Instead of starting this car project from scratch, why not just acquire or make a deal with Tesla?
From Tesla’s perspective, Elon Musk needs help. Sleeping in the factory, approving expenses, firing employees, re-working assembly lines, launching rockets into space, solving power outages around the world, digging tunnels through Los Angeles, all the while raising 5 kids and maintaining an active social life seems a little too excessive, even for an alpha type personality like Elon’s. There is so much riding on Elon’s shoulders and he needs to stay healthy to accomplish these amazing feats he set out to accomplish. Bill Gates had Steve Ballmer. Steve Jobs had Wozniak. Zuckerberg has Sheryl Sandberg. Elon Musk needs Tim Cook. And Tim Cook’s money too. At a $6,000/minute burn rate, it is just a matter of time until Tesla needs to raise money again.
Imagine the possibilities in uniting these two great American companies. They both share a passion for simplicity, perfection, and making the world a better place. They both have very loyal customers, who line up out the door for their products. Together, they can do amazing things in the home and car front, batteries and energy efficient solutions, and beyond.
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Investment advice offered through Gerber Kawasaki Inc, a registered investment advisor and separate entity from LPL Financial.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures success or protects against loss.
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