Apple (NASDAQ:AAPL) co-founder Steve Jobs generally wasn't known for admiring other companies. In a PBS interview in 1995, Jobs said that Microsoft had "no taste," and that Bill Gates "shamelessly ripped off other people's ideas." In 2011, Jobs famously threatened to declare "thermonuclear war" on Google over Android, which he called a "stolen product."
While much has been written about the companies Jobs hated, less has been said about the companies he admired (or would have admired). Let's take a look at four such companies that fit that bill -- social media giant Facebook (NASDAQ:FB), electric automaker Tesla Motors (NASDAQ:TSLA), BMW (NASDAQOTH:BMWYY), and Daimler's (NASDAQOTH:DDAIF) Mercedes-Benz.
In an interview with biographer Walter Isaacson in 2011, Steve Jobs expressed his admiration for Facebook and CEO Mark Zuckerberg:
You know we talk about social networks in the plural but I don't see anybody other than Facebook out there. It's just Facebook -- they're dominating this. I admire Mark Zuckerberg. I only know him a little bit, but I admire him for not selling out, for wanting to make a company. I admire that a lot.
Four years later, that statement still rings true. Facebook remains the largest social network in the world with 1.44 billion monthly active users. It owns photo sharing app Instagram, which has 300 million users, and messaging app WhatsApp, which has 800 million. It's also evolving its stand-alone Messenger app into a platform with payments and apps.
Under the surface, Facebook is tethering third-party apps and sites to its ecosystem with single sign-ons, and building up its News Feed ecosystem with video and news publishing platforms.
In just over a decade, Facebook evolved from a simple social network into a web-based ecosystem that now threatens Google's mobile search and advertising business. None of that would have been possible if Facebook had sold itself to Google, Viacom, Yahoo, Microsoft, or other suitors over the past decade.
Tesla CEO Elon Musk is often called the "next Steve Jobs" due to his obsessive, design-driven work ethic and ability to build up consumer anticipation for new products. Like Apple, Tesla has gained a cult following among both consumers and investors.
In a meeting with John Markoff of The New York Times prior to his death, Steve Jobs stated that if he had more energy, he would have liked to challenge Detroit with an Apple car. Musk clearly shares Jobs' dream of seeing a Silicon Valley company disrupt stubborn Detroit automakers with beautifully designed, environmentally friendly vehicles.
Tesla's first vehicle, the Roadster, had a base price of $109,000, placing it out of the reach of most consumers. But Tesla has steadily brought down its prices. The Model S sedan starts at $67,500 after government incentives. The upcoming Model X SUV will cost roughly the same.
But the Model 3, which could arrive in 2017, is expected to cost just $30,000 to $40,000. Tesla's Gigafactory, which will assemble lithium-ion batteries in the U.S., should further reduce manufacturing costs, while the addition of more Supercharger stations will reduce mainstream concerns about its vehicles running out of juice.
Just as the arrival of the iPhone sent handset makers scrambling to make touchscreen smartphones, the rising popularity of Tesla vehicles has convinced other automakers to develop their own electric vehicles. Today, rumors continue to swirl about Apple secretly developing an electric car, codenamed "Project Titan."
BMW and Mercedes
Steve Jobs, whose last car was a Mercedes-Benz SL55 AMG, frequently compared Apple to luxury automakers.
"Apple's market share (in PCs) is bigger than BMW's or Mercedes' or Porsche's in the automotive market," Jobs stated in a 2004 interview. "What's wrong with being BMW or Mercedes?" In 2013, Apple CEO Tim Cook echoed that sentiment by telling Bloomberg Businessweek, "There's always a large junk part of the market. We're not in the junk business."
Those statements encapsulate Apple's core business strategy: to sell premium products at high margins without fretting over market share. This ensures that the brand isn't cheapened by "junk" devices. By comparison, Samsung sells a wide range of low-end to high-end smartphones to fill every niche of the market, but few people consider it to be a "luxury" brand.
For BMW and Mercedes, that strategy has paid off. In 2014, BMW's worldwide deliveries of its namesake brand, Rolls-Royce, and Mini vehicles rose 8% to a record 2.11 million. Deliveries of Mercedes vehicles climbed 11.4% to a record 1.74 million. Both companies attributed that growth to strong demand in China -- where Apple is also flourishing.
The key takeaway
Facebook, Tesla, BMW, and Mercedes might be companies that Steve Jobs would approve of -- but that doesn't mean they are ideal investments that will experience Apple-like growth. Therefore, investors who are interested in these stocks should do their due diligence to better understand their strengths and weaknesses.