- so recently my roommate and i gottalking about apple, tesla, and gm. i believe the conversation started withapple declaring its first loss in seven years, which let me to asking whether ornot he thought that one day we would all wear apple watches or not. he thoughtabsolutely not, which was also my initial
current price of aapl, impression when they released. the apple watch is sleek, sophisticated techie, but it lacks what makes watches watches;which is sophisticated vintage style. watches are, above all, luxury goods thatare more style pieces than functional in today's society, since their digitalclocks everywhere we look.
it seemed promising, the apple watch.after all, in a lot of respects, apple is a luxury brand. its products aresleek, seamless, elegant, and expensive. apple products make a statement, incontrast to their main competitor, droid's products, which offer arguably morefunctionality in exchange for aesthetics. the apple watch is a classic example ofover-promising and under-delivering. apple has had an incredible streak forproviding high-quality, innovative products that ended with the release ofthe apple watch. for as little as fifty dollars, i got a very nice, not too flashywatch from tommy hilfiger a couple of years ago. apple watches cost anywhere from $300 to an absolutely outrageous price of
$17,000. for even their lowest tier of pricing , they offer little as far as fashion statements go, and evenless as far as functionality goes. this may be a turning point in the lifeof apple, as a coveted past innovations have seemed to all but stifled. so we continued talking about what appleshould do to stay on top. if you look at apple's september 26, 2015 balance sheet. it is sitting on a heaping pile of $21b in cash and cash equivalents; which is an astronomical amount of money to have in cash. to putit into context, with all of their assets combined, netflix is only worth $10b, so apple could buy
netflix twice over with merely the cashthat it has on hand. a lot of people say that would be stupid,and i'm inclined to agree. but we don't know why apple is sitting on so muchcash that is worth more when it's being put to good use. and here's where we got to tesla and gm. a couple years back, you may have heardthat tesla officially released all of their patents for their batteries to thepublic domain in an effort to incentivize other automotive companies to switch toclean energy, or so that's their story. so now companies like general motors can use those patterns to create cars that
run on the same types of batteries astesla cars. the fact begs the question: will test thelast long in the competitive space when they are going up against a juggernautsuch as gm? tesla motors has assets totaling $8b, whereasgm has assets totaling $194b. gm could by tesla twice over with merelytheir cash, much like apple could buy netflix twice with theirs. so how will tesla compete againstcompanies like gm who have exponentially more resources to put toward creatingexponentially better and exponentially more numerous electronic vehicles?
i'm certainly not qualified to answerthis question confidently, and i don't think that elon musk is either. however, here's a little illustration ofthe situation and why tesla has made it as far as they have. think of these twocompanies as water vessels. tesla is a little tug boat, and gm is a 1200 x 161foot cargo ship. gm left port a long, long time ago andhas been heading south ever since. but here comes tesla, the little tug boat.they're at port and they decide it'd be better to head north instead of south, becausenorth is where the future of the shipping business is going. so teslaleaves port and heads north.
gm reaches their destination in thesouth to find that they have to pay crazy tariffs to sell their goods, andpeople in the south are becoming less and less interested in what gm has to sell.so gm decides to start shipping to the north, which requires this 1,200 foot longmonstrosity to do a 180 and head north. as you can imagine, it takes an enormousamount of time and effort to turn a ship that large around so that it can head ina completely different direction. and even when it finally gets turned around,tesla is still way ahead of them. is it a matter of time before gm startspumping out high-quality and affordable electric cars, or do you think the teslawill always remain one step ahead of gm
and other car makers? what about apple? what do you think ofthe future of apple, and what do you think they need to do to get back to thegrace that they have fallen from? let me know in the comments section. if youenjoyed this little analysis that i put together, and if you're looking for abusiness blog to follow on youtube, please click the subscribe button belowto tune in to the content that i'll be pushing out here in the coming months! i will be handling all sorts of topicsabout business, such as current events, business icons, business practices, andmore. as always, thank-you everybody for
watching, and i'll see you next time! :)
