With the Apple Watch now out in the open, shareholders have already begun to press Apple CEO Tim Cook for the next big thing. At the company's annual shareholders meeting today, investors had one particular idea in mind: Apple buying Tesla.
"We don't really have a relationship with them," Cook said, wearily, after being asked about Apple's ties to Tesla founder and CEO Elon Musk. "I'd love Tesla to pick up CarPlay. We now have every major auto brand committing to use CarPlay, and maybe Tesla would want to do that."
"Was that a good way to avoid the question?"
"Was that a good way to avoid the question?" Cook added, causing the room to erupt with laughter.
Despite Cook dodging the question, another investor took the mic just minutes later saying he'd put down a deposit to reserve the very first Mac in 1984, and that nothing has made him quite as excited since then as the Tesla Model S he'd purchased. "Every time I see it, it blows my mind," said the man, who did not identify himself. "Am I insane to think something might happen here?"
"Let me think if there's another way for me to not answer this question," Cook said with a smile. "We're very focused on CarPlay."
CarPlay plugs into supported head units from car makers and aftermarket audio companies, and does a close approximation to basic features of iOS on your car's display. That means you get Apple's maps, phone dialer, and specially developed apps from third-party companies. It's less Apple's Trojan Horse into the car world and more of a stopgap to overcome the maladies of terrible head units made by various carmakers, something those companies seem to finally be ceding control of.
"When you step in your car, you don't really want to step in a time capsule."
"We know that when you step in your car, you don't really want to step in a time capsule and go back 20 years," Cook told investors at the meeting today. "You would like the experience that you have outside the car to be the same inside the car. So that's what we are trying to do a bit with CarPlay." Of course, head units aren't the only thing that can make cars feels like time capsules. Might Apple have some strong ideas about how to bring our vehicles into the future? And might those ideas involve acquiring Tesla?
Similarities between Apple and Tesla have been drawn for years, and rightly so. Both companies have made a name for themselves after making a late entry to certain industries, developing cult-like followings with highly disruptive products. Apple did it with MP3 players, phones, and tablets, and now hopes to do the same thing with smartwatches. Tesla's done it with electric cars, and is working to perfect its technology in high-end cars with the end goal of selling more affordable models to consumers.
Oh right, Apple's working on its own car
Investors' questions for Cook come amid convincing rumblings that Apple is working on its own car project. Last month, The Wall Street Journal said Apple has tasked "several hundred" employees with something called "Project Titan," a plan to build an all-electric vehicle (that will presumably come in gold!). A lawsuit filed by battery maker A123 Systems just days after The Journal's report added extra intrigue, claiming Apple had unfairly poached some of its employees to create its own lithium-ion battery technology for cars.
A report from Bloomberg last month also noted that the two companies had made efforts to poach staff from one another. For its part, Apple's said to have dangled $250,000 signing bonuses and 60 percent salary increases. That hasn't stopped Tesla from plucking as many as 150 of its staff from Apple's ranks over the past few years, wooing talent to build future products.
One thing is for sure, though: Apple's pockets are deep enough to buy Tesla several times over. The company has about $180 billion in cash, and has shown that it's not afraid to spend sizable chunks of it: Beats cost the company $3 billion last year. "We've acquired 23 companies in the last 15 months," Cook said today. "We try to do that as quietly as possible, but we're constantly on the lookout for talent."
One of those talents approached by Apple was Musk. Speaking to Bloomberg last year, Musk said he was approached by Apple's mergers and acquisitions head Adrian Perica, but declined to say how interested Apple had been.
Investors are tantalized by the idea of a Cook-Musk team-up, and it's easy to see why: bringing a real-world Tony Stark into Apple could promise to jump start innovation, and thwart criticism that the company has lacked a true product visionary since Steve Jobs died. But that fantasy version of Apple is unlikely to ever materialize, for one simple reason: Musk himself.
"We had conversations with Apple," Musk said in the same Bloomberg interview, later throwing cold water on the idea that Tesla was up for sale to anyone. "When you stay super focused on achieving a compelling mass-market electric car, I'd be very concerned in any acquisition scenario, whoever it is, that we may become distracted from that task, which has always been the driving goal of Tesla."
Mashing up the two companies might sound like a dream to those who assemble company rosters like all-star sports teams, but everyone also knows it's about chemistry, something that's playing out right now with Apple and Beats. In the theoretical case of Tesla, Apple might get a car company, but it could also mean reining in Musk, and ultimately a culture clash that changes both companies for the worse.
Correction: The reported signing bonuses and salary increases came from Apple. This article originally stated that they came from Tesla.