The Apple Car is going to be great for Tesla!
Lily Lawrence / Getty Elon Musk, CEO of Tesla There's an annoying thing that happens in the technology industry when a big company tries to steal a small company's idea.
The small company is asked by the press: So, what do you think of the big company's plan to clobber you?Â
The small company never says: We're scared out of our brains, we're probably just going to fold our tent, return money to our shareholders, and call it a day.Â
They don't say this because, 1. they don't feel that way, and 2. big companies struggle to kill small companies.Â
But, the small company never says that latter point, that big companies rarely kill small companies.Â
Instead, they usually say something along the lines of, "This is a great validation of the space we've been working in."
This cliche drives me up a wall. Did you really need the big company to validate the space you were working in? Of course not.Â
The validation helps the small company to an extent, because suddenly it gets some free marketing. The press always feels obliged to point out that the big company is simply ripping off the small company.
But, really, the validation thing is nonsense.
So, what's my point?
Apple reportedly has a team of hundreds working on an electric car.
The only company working on an electric car is Tesla.
As a result, many people are going to wonder if Apple, the most valuable company in the world, is going to flatten Tesla. The answer is no.Â
And, this might be the rare instance where Apple actually is validating the space, and helping Tesla's cause.Â
Tesla Many auto makers are either selling or developing an electric car. Tesla CEO Elon Musk's response whenever it happens is always the same: Awesome!
At the Detroit auto show, Musk said:Â "The main reason I'm here is to talk about electric vehicles and to do what I can to encourage other automakers to accelerate their electric-vehicle programs. The need for sustainable transport is incredibly high."
He added, " If we can make it go electric sooner, then that will be much better for the world… The potential harm to the climate is really much, much greater than it was before. The potential harm to the environment is much much less [as result of EVs]."
Apple entering the market will help Musk's mission of making more cars electric.Â
Apple is an incredibly influential company.
For instance, this what smartphones looked like before the iPhone:
Apple And, this is what tablets looked like when Microsoft first tried to design them.Â
Reuters Bill Gates with a Microsoft tablet in 2000 If Apple enters the car market with a good electric car, it will be successful. That will push other car companies to redesign their cars and lean into more electric cars. That's exactly what Elon Musk wants.Â
But, how does that help Tesla? Because the more electric cars there are in the world, the more normal it seems. The more normal it seems, the easier it is for Tesla to sell cars.
Tesla is the pioneer in this space. It has a 10 year head start on Apple.
Apple has crushed pioneers in the past — look at BlackBerry, Nokia, and Motorola for example. So, Apple could end up crushing Tesla.Â
But, I don't think that will happen. Tesla is not BlackBerry. Tesla is a much smarter, much more focused company. It's led by Elon Musk, a true visionary. He's not going to let Apple eat his lunch.Â
By the time the Apple Car hits the market, Tesla should be on its third generation car. Telsa's third generation car is expected to be more affordable. It's unlikely Apple's first car is going to be low-cost.Â
If the electric car market follows Apple's history with phones and PCs, then Apple will take a small, highly profitable share of the high-end of the market, and Tesla can have the rest of the market, which is not nearly as profitable, but it is still a good business.
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