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Is Tesla to the Automotive Industry What the iPhone was to mobile?

During a recent virtual happy hour with more than 20 of our newest members, an interesting question arose – Is Tesla to the Automotive Industry what the iPhone was to mobile?

From thoughts on the transformation of industries, platforms and ecosystems, to the impacts on competition, leadership, and brand, all of their perspectives were fascinating. We’re pleased to share some of their insights. Here’s what a few of them had to say…

Jordan Greene, Partner, MellaMedia

In 2007, the iPhone created a seismic shift across the mobile industry.  But just as importantly, it set new baselines for consumer expectations. Functionality like visual voicemail, mobile maps and cameras became standards quickly that consumers couldn’t remember not having in their phones. However, arguably the biggest improvement was the ability to upgrade the software on the device over the internet. Previously, the Nokia-owned-market-way was to buy a new dumbphone, altogether. Apple’s innovation decreased the feeling of technological obsolescence and frustration for consumers while garnering further loyalty to the iPhone.

The device felt different. It looked different.  It became a word that people from the elderly to toddlers knew. The buzz and attention paved the way for Apple’s primary competitor, Google Android, and spawned all kinds of new iPhone functionality from third party developers when Apple opened the App Store. That was the magic of the device and its pitchman, Steve Jobs.

Tesla has a similar map. The cars don’t look like other cars, and they don’t sound like other cars—if they make any sound at all.  Just like Apple, the device gets better while you own it with over the air updates.

And just like Apple, they have a CEO in Elon Musk who understands PR as well as anyone. He has made “Tesla” a word that is synonymous with car innovation.  Even with a small fraction of the cars on the road, consumers across ages know the name, can identify the car and have notably positive feelings towards wanting one.

If like Apple, Tesla can make their cars affordable to just about anyone, does that generate a significant spike in sales volume and overall market share?  Or to put it another way, can Tesla put Chevy out of production? If that sounds extreme, just ask Nokia how their phone sales are today.

Jody Westby, Chief Executive Officer, Global Cyber Risk

I don’t think of the question as “is Tesla to the automotive industry what the iPhone was to mobile.” Rather, “is Elon Musk’s innovation having an impact on industries and the planet similar to that of Steve Jobs?” I think Musk is the closest thing to Steve Jobs we have right now. The iPhone was disruptive to mobile, but it also disrupted cameras, watches, gaming, and brought an app platform to the planet that enables tremendous innovation. 

Jobs’s vision and leadership disrupted so many aspects of how we work, communicate, live, and play that it is difficult to even begin describing them. Musk’s Tesla is disrupting the automotive industry, but he has significantly advanced battery technology, which will propel further innovation and adoption of technologies and space flight. His transportation and other companies (seven, plus Future of Life Institute) are transforming many industries through innovation and science.

Musk may be more disruptive because he is also contributing to advances in science in a much bigger way that Jobs did. Both of these men have/had personality issues, but that should not interfere with evaluating their contribution to technology and innovation. 

John Suh, CRADLE Director, Hyundai Motor Group

Before moving to California, I lived in southeastern Michigan and went to college in Flint. There I witnessed up close the impact on people and communities when jobs are lost because the main employer shuts down or greatly reduces operations. Since the 1980s, Flint has endured decades of economic decline. Before COVID-19, it had a major public health crisis resulting from lead contamination in its water supply. The city has taken its fair share of hits, but it is not down and there are many signs of positive change. On a visit to Flint in February this year, it was great to see downtown Flint well on its way to revitalization.

When a top executive threatens to leave a city, I can imagine the anxiety this could cause the employees, the families of those who work at Tesla. Threatening to move out of California when the situation doesn’t suit you is careless. Is Tesla as to the automotive industry what the iPhone was to mobile? I couldn’t care less; but I wish the best of success to Tesla, its suppliers, its investors, and the communities it’s a part of. I would like them to stay in California. If they decide to move, I recommend they give Flint a serious look.

Michele Luzi, Partner, Bain & Company

Tesla is unlikely to cause the same disruption to the car industry as Apple did to Nokia in 2007. The mobile phone industry then was selling telephones for communications between individuals – a sort of wireless version of the old phone.

As penetration grew, and the internet infrastructure developed, the opportunity arose to create something totally different:  a personal computing device for access to information, entertainment and communication. Many had this intuition (i-mode, Vodafone, Symbian) but failed to execute both for strategic and execution reasons.

Apple succeeded because:

  1. They used available technology to make a revolutionary product (integrating many technologies, such as PC, camera, touchscreen, WiFi, display).
  2. They used the rivalry among Nokia’s distribution channel (operators) to distribute it ubiquitously and very rapidly.
  3. They created a standard environment for app developers, which made the iPhone become also a platform business, quickly followed and nearly equaled by Google’s Android project.

Today, Apple and Android control the ecosystem and are the only two games in town. How can Tesla replicate this?

Tesla has created a very radical electrified evolution of the traditional car, although not as revolutionary as Apple did with the iPhone, and legacy players are catching up. Secondly, the distribution is not controlled by third parties but largely directly by Tesla’s competitors and cars are much higher cost products and purchased less frequently, reducing first mover advantage.

On top of that, Google and Apple (rather than Tesla) are already among the best placed to control the underlying “platform businesses” which cars would still need to rely upon (e.g. self-driving cars system, etc.)

Robin Albin, Founder, Brand Strategist & Sherpa, Insurgents

No doubt, Elon Musk is making the world a better place.  But Steve Jobs made the world a totally different place. 

While Tesla is having tremendous impact on the transportation industry (with EVs, autonomous cars and hyperloops), technology ,and potentially the green economy (with EVs and solar panels), it’s hard to say how deeply and exactly when that impact will be felt by the public at large. We are still for the most part driving gas guzzling cars. The fact is, there are still too many unknowns. 

The iPhone on the other hand transformed more than an industry. In a very short time, it changed humanity, culture, society, and almost every aspect of our daily lives and the lives of hundreds of millions around the world. It changed how we communicate, work, shop, learn and play.  It is critical for receiving news. It unleashed new businesses across industries – like Uber, Lyft, Waze, Google Maps, GrubHub, Mobile Banking, Audible, Tinder and Bumble. And cratered others – like Kodak, Nokia, Blackberry and many more.  It impacted Telecom virtually making telephones obsolete. Try to find a payphone anywhere today. And it forever changed the news, gaming, television, movie, music, photography and health industries. Surely, there is more to come.

Our iPhones are vital to our everyday lives. According to modest statistics, we look at our iPhones an average of 52 times a day – and that’s likely an underestimation. Our iPhones are the first thing we check at in the morning.  The last thing we consult at night. We keep them by our bedside for comfort.  They are an appendage that fills us with ‘appiness.’  They didn’t just replace our flip phones, they replaced our Filofaxes and calendars. They became our watch and our clock. Our camera. Our computer. Our calculator. Our personal communicator.And the ultimate remote control of our lives. They became our music and movie library, our flashlight and our workout buddy. They completely liberated us from our desks and homes. They put the internet and the shopping mall in our pockets.  Exploded entertainment and engagement from social media and matchmaking. And I’m quite sure I’ve left out a few other alliterations.

Time will tell whether Tesla will impact us the way the iPhone already has.  I know I personally would be lost without mine.

Amy Wu, Founder, From Farms to Incubators 

The key issue is that both Tesla and Apple products should allow for easy access and connectivity to other platforms considered to be mutually enhancing and benefiting the essential needs of the US population. In addition, both companies create a distinct design; the aesthetics of a Tesla and iPhone make it standout to a degree where that becomes a factor in attracting repeat users. The connections and parallels between automotive and mobile are directly relevant to the agriculture technology sector, where farmers seek technologies to help them solve significant problems such as labor shortage and limited water and land supply. Agtech is in a growth phase where it needs to prove that it is fool proof to farmers in increasing efficiency and yield, but it will evolve to a phase where aesthetics and design will be part of the competitive edge. Who knows maybe Tesla and Apple will inspire the next wave of agtech start-ups, hopefully led by women leaders and entrepreneurs.

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