Apple Eyes Tesla—Transformative Power Play or Spoiled Fruit?

February 21st, 2014
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The headline leapt from the San Francisco media and spread to websites and blogs worldwide: Will Apple Computer buy electronic car maker Tesla? The answer to that question is cloudy. There are a lot of rumors swirling about the two companies, Tesla founder Elon Musk is involved in a multitude of projects, and the alleged meeting took place more than a year ago.
Perhaps the more important question is—why would Apple and Tesla be interested in one another? They’re two great companies that could probably do something fantastic together, but they’re in very different industries. While that hasn’t stopped Apple before, the company hasn’t previously acquired for innovation – rather, it has usually developed from within.

Apple announced partnerships with 12 car manufacturers (but not Tesla) last summer at the Apple Worldwide Developers Conference, so buying Tesla could harm those relationships. Chevy is now promoting Siri in its commercials, and Apple has partnered with Ferrari to install an “infotainment” system for the Italian car-maker. It’s clear to see why Apple would want to get into millions of cars: there’s the opportunity to share in the automakers’ revenue while further cementing relationships with Apple customers, both new and old.
But perhaps the real interest lies in power. As in, the next generation of lithium ion batteries that could power Tesla’s cars, and so much more. In January, Musk announced that he—in partnership with Panasonic and other undisclosed companies—would be building the world’s largest battery factory, to supply the demand for electric cars as well as other battery-dependent technologies, like Apple’s. Moreover the plant will be green. It will be powered largely by solar energy, have almost zero emissions and no toxic chemicals to dispose of. This environmentally friendly effort will require an even more diverse set of partners to develop.
Time will tell if an Apple-Tesla relationship is real or rumor, but either way it is an example of a creative approach to strategic partnering. At Popper and Company, we help develop strategies that can often involve finding creative partnerships for healthcare innovations, often with companies whose expertise lies far outside of healthcare. But, as we’ve discussed, those partnerships should be the result of a solid strategy that involves knowing potential customers and market needs, assessing competition, and recognizing the potential in new technologies. In fact, Apple is in the process of developing a wearable sensor that could predict heart attacks by analyzing sound. The company speculates that heart attacks can be predicted by listening for turbulence as blood flows through a peripheral artery. When a plaque forms in a blood vessel, the blood flow changes from a laminar pattern to a more turbulent one. As part of a physical exam, doctors listen to the carotid arteries for bruits – turbulent flow that can indirectly tell us if there is plaque formation in the vessel. Since Apple is developing this technology, is it far-fetched to think a Tesla battery-powered healthcare innovation may be on the horizon?
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About the Author:

I co-founded Popper and Company more than ten years ago to help life science companies at all stages of development and of all sizes address inefficiencies in health care. Along with my team members, I focus on helping clients develop and implement strategies that enable the application of technology and processes to improve health care in novel ways, often through the establishment of relationships with industry partners. Click to send me an email.