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Will Elon Musk Become the New Steve Jobs?

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Apple (NASDAQ: AAPL  ) needs a visionary.

News that Apple's Acquisitions Chief Adrian Perica met with Tesla Motors (NASDAQ: TSLA  ) CEO Elon Musk last spring, as reported by The San Francisco Chronicle, suggests that Apple might be in the market to acquire one.

Musk, who founded PayPal, serves not only as CEO of the innovative electric-car maker, he is also CEO of SpaceX, which funded the first privately funded vehicles to reach orbit. He may not exactly be the next coming of Apple founder and longtime CEO Steve Jobs, but he may be the closest person available.

Loss of a leader

Apple, according to its first quarter 2014 earnings release, posted record quarterly revenue of $57.6 billion and quarterly net profit of $13.1 billion. So despite the loss of its visionary leader, Apple remains wildly successful. It's just, well, missing something.

Oracle CEO Larry Ellison said it best in an interview on CBS This Morning with Charlie Rose. "He was brilliant. He was our Edison, our Picasso," Ellison said. "We saw -- we conducted the experiment. I mean, it's been done. We saw Apple with Steve Jobs. We saw Apple without Steve Jobs. We saw Apple with Steve Jobs. Now, we're gonna see Apple without Steve Jobs."

Without Jobs -- or another figure that ignites the public's sense of wonder, Apple can be successful. But it won't occupy the magical place it did with Jobs at the helm.

Why Elon Musk, why now?

Apple does not need Tesla and it does not need Musk as its CEO, but both might profit from the marriage. The idea was first floated last October by German investment banking analyst Adnaan Ahmad who wrote an "open letter" to Apple CEO Tim Cook and board director Al Gore, urging the company to acquire Tesla.

"I know this is radical and potentially 'transformative,' but this would radically alter Apple's growth profile," Ahmad wrote. "In Elon Musk, you could strike up a partnership and obtain a new iconic partner to lead Apple's innovation drive."

Apple has, according to The Chronicle, been exploring products in the automotive industry and Tesla has been a leading innovator in electric cars. Tesla is tiny compared to Apple, showing a $30 million profit in 2013 on $1.7 billion in sales. But if Apple buys Tesla, it will not be simply to acquire its products -- it will be to acquire the services of its visionary CEO.

Does Tesla need Apple?

Why would Musk consider selling a company that's on the rise, where he is the boss, to one that's more mature where he would likely be product chief, but not CEO? That answer comes in the fact that Tesla -- for all its promise -- has almost run out of cash on more than one occasion.

"You could see a company with that kind of history making sure that they've got their options lined up," Andrea James, who covers Tesla for the Dougherty & Co. investment bank. "Tesla might get a backstop there."

Apple needs new product

Apple under Jobs captivated the public in the way a business can only when a maverick, a true independent thinker, sits in the CEO chair. With Jobs at the helm, Apple devotees did not know what new wonder the company would release next, but it always had faith that something was coming.

The same could have been said of Microsoft (NASDAQ: MSFT  ) when Bill Gates was CEO and the same can be said now, perhaps, of Facebook  (NASDAQ: FB  ) under Mark Zuckerberg. Microsoft has survived the departure from the CEO chair of its visionary leader and remained very profitable, but nobody considers Microsoft a visionary company that will change the world.

Apple, if it wants to avoid the fate of becoming a profitable, but dull company, needs someone who can lead innovation.

"Apple must increasingly rely on new products to reignite growth beyond the vision" of Jobs, Bill Kreher, an analyst with Edward Jones Investments in St. Louis told The Chronicle. "They need the next big thing."

Musk at Apple makes sense

While he likely won't wear the black mock turtleneck that Jobs was famous for, he could reignite the passion of Apple's fanbase. Imagine the product launch event where Cook -- the steady leader -- cedes the microphone to Musk, his new Chief Creative Officer, for the introduction of Apple's first car?

It may seem far-fetched. But if Apple needs the next iPhone to stay relevant and push its profits to new levels, it seems more likely that will happen with Musk in the fold than without him.

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Read/Post Comments (3) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 18, 2014, at 11:20 AM, ffbj wrote:

    As dey say in Jersey:

    Foget about it?

    This will not happen.

    1. Tesla is not short of cash, as you suggest.

    2. Musk has no intention of selling. He is on a mission, as are his employees. You don't sell the dream.

    3. This is history.It did not happen in the past, and will not happen in the future.

    Evidence: Recently Tesla has poached a number of high profile Apple employees: The Hacker Queen for one, and the guy who designed the Apple stores. In other words why poach people from a company that might possibly buy you?

  • Report this Comment On February 18, 2014, at 11:26 AM, twolf2919 wrote:

    This is ridiculous. Yes, Musk is a visionary leader, but how does "vision" in cars and space exploration translate into "vision" for Apple's core products?? Musk has not shown any interest, whatsoever, in consumer electronics. This is nothing but a wishful dream by those who think Apple needs another Steve Jobs to succeed.

    Also think about the consequences of Apple buying Tesla. At this very moment, Apple is trying to cajole automobile manufacturers into adding "Siri Eyes Free" to their cars. Many have already agreed and put it in their 2014 cars (e.g. Chevrolet, Honda). How many of these manufacturers would do this (or continue to do it) if Apple were to suddenly acquire an up-and-coming competitor? I doubt they'd accept "...but...but...we need a visionary!..." as an answer.

  • Report this Comment On February 19, 2014, at 12:08 PM, clarkvera wrote:

    No doubt Elon Musk could pull this off.

    If this happens, other car makers might get gobbled up. Google and Samsung can't stand by and let Apple takeover the auto market, that leads directly to the robot market, which is coming soon....

    I hope this happens because it will be lots of fun to see hi tech takeover and finally liberate us from our Petroleum addiction.

    Maybe Google will buy whirlpool and GM, link cars and phones to your home, Apple will do the same. Don't forget Samsung and Kia/Hyndai and LG home products.

    Should be a fascinating ride - Welcome to the future - Enjoy it - Clark Vera

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Daniel B. Kline

Daniel B. Kline is an accomplished writer and editor who has worked for the Microsoft's Finance app and The Boston Globe, where he wrote for the paper and ran the business desk. His latest book "Worst Ideas Ever" (Skyhorse) can be purchased at bookstores everywhere.

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