Will Elon Musk Become the New Steve Jobs?
Apple needs a visionary.
News that Apple's Acquisitions Chief Adrian Perica met with Tesla Motors 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 when Bill Gates was CEO and the same can be said now, perhaps, of Facebook 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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The article Will Elon Musk Become the New Steve Jobs? originally appeared on Fool.com.Daniel Kline is long Microsoft. The Motley Fool recommends Apple, Facebook, and Tesla Motors. The Motley Fool owns shares of Apple, Facebook, Microsoft, and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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