
Apple will buy Tesla for $75b in 18 months - hodgesmr
http://calacanis.com/2015/02/14/apple-will-buy-tesla-for-75b-in-18-months/
======
stephanfroede
There are some misconceptions in the article (imo):

The claim that game is already over is wrong, major car manufacturers like
BMW, Audi, Mercedes, GM, Ford, PSA, are working on all possible approaches at
once. They tested and tried any possible power train technology you can think
of (except fission reactors and fusion reactors).

They are offering integrated services, even if they are moving slower than SV
inspired companies, u should not underestimated their ability to move faster
than expected. The automotive market is extremely competitive, companies that
are succesful their, are succesful for a reason.

Cars are extremly complex, far more complex than an iPhone (there is a reason
why they cost much more than an iPhone).

Teslas advantage is mainly that it can make money with selling certificates in
California. This is good, but can not be applied worldwide.

The automotive industries supply chain is vast, they do operate globally,
their relationships are much more complex than the electronics industry.

The devil is in the detail, Teslas much admired agility is no match for a
Porsche or an i8. Building engines is an art.

Sales channels, selling a car is an art in itself (I do know something about
selling cars, because my business idea is about selling cars, better of course
than anyone else;-)). The sales channels are established and deep in the
markets. Tesla has some trouble in China.

After Sales, a car needs after sales support.

Regulation, global car regulation is complex, wild and full of wonders.

Tastes, u will not believe how different tastes are globally. A Tesla looks
like a Japanese Car to me as a German (which is a malus). A BMW, or Audi has
it's own design language which is full of character and sophistication.

The hill to sell a car here is really really big.

But if Tesla and Apple bring some new ideas on the table, it would probably
good for all participants.

@asknbid or @obylocom

~~~
crawshaw
Ford explored fission reactors for cars in the 50s:
[http://en.wikipedia.org/wiki/Ford_Nucleon](http://en.wikipedia.org/wiki/Ford_Nucleon)

~~~
stephanfroede
Oh, even fission:-)

May be we will see shoe box sized fission reactors, if Lockheed succeeds.

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shmerl
I hope not! We don't want crazy patent wars spilling in there too. So far
Tesla were quite positive in avoiding that:

[http://www.washingtonpost.com/blogs/the-
switch/wp/2014/06/12...](http://www.washingtonpost.com/blogs/the-
switch/wp/2014/06/12/elon-musk-take-our-tesla-patents-please/)

If Apple buys them you can bet their crazy obsession with patents will poison
Tesla as well.

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Shivetya
If anyone buys Tesla it likely would be an established car company because
Apple buying Tesla would not solve Tesla's second problem.

Their first problem is money. They don't have the money to ramp up their car
building ability to support the III. They have delivery and market issues with
just the S

Their second problem is, they don't have the supplier network large enough to
support the III nor the expertise to get it out on time. Apple buying them
won't fix that.

Apple's problem is that they are sitting on too much cash to make a good
decision. There really isn't anyone worth buying, Tesla surely isn't.

I would have thought Apple would be better served by making self driving cars
simple through software and hardware that goes into other manufacturers cars.

~~~
cmsj
I tend to think that buying any of the big silicon fab companies would
probably be in Apple's interests. They generate the kind of cash you need to
be able to invest in the huge R&D costs needed to sustain Moore's Law, and
they have clearly indicated that they want to keep their iOS SoCs at or very
close to the leading edge of process technology, because it gives them a huge
competitive advantage.

However, the problem there is that it means you really need to be buying
Intel, TSMC or Samsung. Clearly Samsung is a non-starter, and TSMC seems to be
fiercely independent, leaving Intel. I can't imagine a healthy world where
Apple has bought Intel, so that seems to also not be an option (I can well
imagine that regulatory authorities might want to block anyone from buying
Intel).

Maybe they could use their piles of cash to build their own fabbing
capabilities from the ground up, but that seems like it would be a very risky
and very drawn out task.

So, yeah, not sure there isn't _anyone_ worth buying, but they may not be able
to actually buy the companies that would help them pull further ahead in
owning their core technologies.

~~~
shalmanese
What about GlobalFoundries?

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51Cards
"Apple’s design team, software, and global distribution would actually LEVEL
Tesla up."

"Software"... lately? No. Sorry. Don't agree on design either.

Thing is I'm not sure Elon wants to let go of Tesla. Tesla is on a roll right
now and Elon strikes me as the kind of individual who would personally see
that out, at least for the foreseeable future. He has visions of changing the
world (and access to other worlds). He may take investments, but I don't think
he's ready to see it sold outright.

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nlh
While it's a fun idea, I'm skeptical (though it would be cool!)

I think it's far more likely that Apple ends up either _designing_ a car for
Tesla or, less-spectacularly, "powering" a car (which basically means
expanding CarPlay to a bigger role than v1 will have on the dashboard.)

I still think it's ridiculous that car manufacturers essentially create their
own OSs (yes, I know they get them from 3rd parties and some are QNX-powered,
etc.) but in essence, every car has its own UI/UX, most of which are terrible.

CarPlay is step 1. I think the evolution of that is a car that's run entirely
on OSX/iOS/CarOS -- with a real UI, good UX, and the joy of well-designed
electronics. Modern-day cars are vastly more computer-controlled than they
used to be, and it makes sense that Apple wants to be a part of that action.

I don't think we're going to see Apple The Car Manufacturer, but I do think
we're going to see "Powered by Apple" soon.

~~~
cmsj
I really like this idea. A range of cars from Tesla, deeply integrated into
the Apple ecosystem, would seem like a pretty sweet place to be.

Apple can certainly solve Tesla's cash problem. Distribution probably takes
care of itself when you put those two names together, in the sense that it's
two exceptional brands that people will actively seek out, regardless of what
their local dealers are trying to push.

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ChuckMcM
This has got to be the next 'Googlezon' (EPIC 2014), I've now seen 3 people
suggest that Apple and Tesla merge/acquire (one of them had Tesla acquiring
Apple)

I think Tesla is in for a world of hurt actually. Pretty much everyone "gets
it" now, and there is at least 10x the capital engaged in creating Tesla
competitive cars as there is at Tesla creating their own cars. That means 10x
more success paths explored per unit time. That means 10x more noise in the
market to obscure Tesla's message. That means 1/10th the "oxygen" left for
anything else. The best thing Elon did was the "gigafactory" as it will have a
lock on battery supply if none of these new battery technologies come to
market. That provides a pretty good defense against the onslaught. But every
car company is gunning for him. It's pretty impressive.

~~~
greglindahl
There's only one company that's announced a long-range electric car other than
Tesla - not much sign that everyone gets it! Awesome if that's really
happening, but ... as an example, the only announced competitor is the Bolt,
and there's no announcement for large-scale battery supply for it.

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ghaff
The main reason why it doesn't seem totally crazy is that Apple just has so
much money and has been so successful in their current markets is that they're
arguably going to have to do something radical at some point if they're going
to continue to grow. It's unclear to me that an Apple Watch or TV-related tech
of some sort is radical enough or big enough.

That said:

\- Everything stephanfroede wrote about the challenges of the automobile
market and the level of competition there.

\- Modular auto displays/electronics are definitely somewhere Apple could
play. But partnering is arguably the more profitable approach there. Look at
Bose for example.

\- The article makes the argument for totally self-driving cars arriving
within just a few years. I don't see it. (Although the case does apply to some
degree even if you have autonomous navigation on some freeways within an
interesting time horizon.)

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martin_bech
Apple buying tesla, makes increasingly more sense, if Apple really wants to
get into cars. Electric cars is a whole different ballgame, and Tesla has
shown that its possible to get apple like margins... Getting my popcorn ready
and getting back into the Tesla stock..

~~~
maxerickson
Tesla doesn't have Apple like margins.

[http://finance.yahoo.com/q/is?s=TSLA&annual](http://finance.yahoo.com/q/is?s=TSLA&annual)

[http://finance.yahoo.com/q/is?s=AAPL&annual](http://finance.yahoo.com/q/is?s=AAPL&annual)

(I'm comparing total revenue and cost of revenue)

They still have pretty good margin there, but Apple is quite a lot higher.

They are also pretty unlikely to hold onto the margin they have as they move
into the broader market.

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higherpurpose
> Elon Musk as the CEO of Apple? Wow. Doubt he would want to do it, but I
> could see him being the Chairman — and that would be kind of special.

That's the ONLY reason why I would want Apple to buy Tesla - if Elon Musk can
become its CEO let's say in 5-7 years. I can't even imagine what Elon Musk
could do with Apple's money, but I'm pretty sure he'd at the very least take
on fusion research, and other stuff that would accelerate the arrival of a new
"space age".

Otherwise, Apple buying Tesla just as another profit-center and to make
fanbois happy that they only have to buy their products religiously from a
single company? Screw that.

Put Elon Musk on the schedule to become CEO and then we're talking.

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BillFranklin
This post could do with the title being prepended with 'I think...'

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simonebrunozzi
Apple will NOT buy Tesla for $75B in 18 months -
[https://news.ycombinator.com/item?id=9055177](https://news.ycombinator.com/item?id=9055177)

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desdiv
Tesla's current market cap is $25b. Isn't $75b too much of a price premium?

To be fair though, Tesla's share price went up by 100% over the past 18
months, so a 200% increase over the _next_ 18 month isn't unimaginable.

[0]
[http://www.google.ca/finance?cid=12607212](http://www.google.ca/finance?cid=12607212)

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asadlionpk
I don't think Elon would want to sell Tesla since he can benefit in longterm
as a supplier for batteries/EV tech?

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mfisher87
>Google is another likely buyer, but Google can’t compete with Apple’s war
chest?

I always thought Google had more cash than Apple...this sounded off, so looked
it up. Google's at 64B cash + liquid assets, Apple at 32B. Oh, no, how will
Google ever compete with that?

~~~
replicatorblog
That information is way off Apple had $178B as of Jan 2015
[http://money.cnn.com/2015/01/28/investing/apple-
cash-178-bil...](http://money.cnn.com/2015/01/28/investing/apple-
cash-178-billion/) The 32B is probably just the profit for a single quarter.

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intopieces
Lots of the things on this list could be accomplished with a partnership
rather than an acquisition. Can anyone elaborate as to why Apple might choose
to acquire over simply buying in?

~~~
JohnTHaller
Because Apple has a habit of buying companies to ensure that no one else can
use the same technology. That's the reason the Nexus 6 doesn't have a
fingerprint reader. Apple didn't invent that technology, they bought the
company that did so no one else could use it.

~~~
avinassh
So no phones can ever have fingerprint recognition? There is no other way
around? Or Do they have to pay royalty to Apple?

~~~
mschuster91
Back in the Windows CE days, I used to own a Toshiba smartphone with a
fingerprint reader on the backside.

Apple were not the first, but definitely their solution is the sexiest.

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coding4all
For all that is great in the world, I hope this isn't true.

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frade33
Cars used to be mechanical miracle, today they are controlled by 'computers'
and 'softwares'. Above all, their pricing is rip-off for high end cars esp., I
am not currently sold for electric-only car, but I am more favorable for
hybrid and I hope Apple make one too.

If you can read, computers and software above while you do know skills of
Apple for both industrial and software design, perhaps you could find the
missing piece of the puzzle.

If they re not working on a car, they should. And we do know, Apple can bring
down the price of 'high-end' to near affordable. That's where, the current
leaders in this industry need to worry.

~~~
therobot24
> Above all, their pricing is rip-off for high end cars esp.

This is where you lost me, there is much more than styling with higher end
cars.

> Apple can bring down the price of 'high-end' to near affordable

So many questions, but one stands out - what do you think a software company
is going to do that Ford, Audi, BMW, Chrysler, GM, etc. haven't already looked
into or are already doing? Ford Sync sucks, does that mean a car from Apple
will be better cause it has better 'apps'?

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mk00
no, they wont.

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mbleigh
Tesla and Apple are ideological opposites, I really hope this never comes to
pass.

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xtrumanx
The authoritative sound of the title bothers me like click-bait titles.

~~~
cmsj
Not a particularly new thing for Jason ;)

