Tesla Mo­tors is like Ap­ple

Industry Leaders - - Crowd Funded Inc. -

To un­der­stand what ex­actly is hap­pen­ing in the mar­ket right now, it’s worth re­vis­it­ing the story of Nokia’s rise and fall in the cell­phone in­dus­try a decade ago. Back un­til 2007, the cell­phone mar­ket was widely dom­i­nated by Nokia with 440 mil­lion units shipped an­nu­ally, fol­lowed by Mo­torola with 164 mil­lion units. Ap­ple re­leased the first iphone that year, how­ever, it sold shipped than 4 mil­lion units.

An­a­lysts at the time dis­missed Ap­ple as a mi­nor player. Of course, what most an­a­lysts missed was that the cell­phone in­dus­try was about to change. The good, old-fash­ioned cell­phones were now over­thrown by the iphone and a new wave of An­droid-based smart­phones.

Nokia ex­ec­u­tives were not the least bit both­ered.

They didn’t have the iphone OS, but they had plenty of high-pro­file en­gi­neers and strong part­ner­ships with mo­bile net­work op­er­a­tors from around the globe. They ex­pected they’d be able to launch a bet­ter smart­phone OS and still re­main a ma­jor player in the smart­phone busi­ness.

De­liv­er­ing an iphonequal­ity smart­phone proved to be dif­fi­cult than they had ex­pected. At­tempts to cre­ate its own soft­ware back­fired, and a lu­cra­tive Noki­aMi­crosoft part­ner­ship failed to gain mo­men­tum. Once the world’s largest mo­bile phone com­pany, Nokia was forced to sell its mo­bile phone unit to Mi­crosoft in 2014 – a hu­mil­i­at­ing end to Nokia’s 14-year lead.

We do not know if some­thing like this in in the cards for Volk­swa­gen, GM and Ford, but it would be one al­ter­na­tive the­ory to ex­plain why Tesla has such high mar­ket cap­i­tal­iza­tion in com­par­i­son. Ex­ec­u­tives in ma­jor car com­pa­nies think they can eas­ily tran­si­tion to mak­ing elec­tric, Ai-driven ve­hi­cles, just as Nokia thought it would find its feet in the smart­phone world.

Gen­er­ally, prof­its in tech in­dus­try are more askew than mar­ket share. To­day, Cu­per­tino gi­ant Ap­ple de­liv­ers fewer than 20 per­cent of the world’s smart­phones. Yet, its great­est com­pet­i­tive ad­van­tage is its fluid ecosys­tem – the com­pany makes both the hard­ware and soft­ware to push sales of high-end de­vices at high mar­gins. De­spite the iphone’s see­ing smaller crowds, Ap­ple’s quar­terly prof­its of­ten dwarf the prof­its of all other smart­phone mak­ers com­bined.

Like Ap­ple, Tesla road­sters

have their fans who fol­low the car­mak­ers every move and are overly-en­thu­si­as­tic to buy its new prod­ucts.

Last year, Tesla opened their Gi­gafac­tory in Ne­vada, which is the big­gest fac­tory in the world. Tesla is de­sign­ing bat­ter­ies ca­pa­ble of stor­ing power from rooftop so­lar pan­els. One of Gi­gafac­tory’s most promis­ing prod­ucts is the Pow­er­wall and the Pow­er­pack, recharge­able lithi­u­mion bat­ter­ies for en­ergy stor­age. The bat­ter­ies are in­tended to be used for home en­ergy stor­age and store power for so­lar self-con­sump­tion, backup as well as offthe-grid use. The Wall Street calls it a gamechanger for the en­ergy mar­ket.

Tesla CEO Elon Musk is hop­ing that the Gi­gafac­tory will give him a head start over cen­te­nar­ian au­tomak­ers. As other car man­u­fac­tur­ers call for elec­tric ve­hi­cles push, they’ll find out there aren’t enough bat­ter­ies, mak­ing it dif­fi­cult to ex­pand elec­tric car pro­duc­tion on a scale as mas­sive as Tesla’s.

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