NEW YORK ( TheStreet) -- In this article, I deal with two related issues:1. Driving the Tesla ( TSLA) Model S for the first time, why are the investors so surprised that it is so awesome? 2. Should Apple ( AAPL) expand its product line into TVs -- or cars?
When I asked those smartphone bears in 2000 and 2001 if they actually had a BlackBerry, most of them said "No, why would I want to look at my email all the time?" They had never used one. Three years later, every single smartphone skeptic I knew had one. Fast forward to today. All you needed to do in order to know that the Tesla Model S was going to be an awesome car is to have driven any of the other good electric cars already in the market: Nissan LEAF, Chevrolet Volt, Fisker Karma, BMW 1-series Electric or Ford ( F) Focus Electric. Yes, I know those are not all the same -- and certainly they are different from the Tesla Model S -- but they are all basically very impressive to drive. Most of them cost materially less than the Tesla. If you just extrapolate a little, you would easily arrive at the conclusion that the probability of the Tesla being great to drive, would be extremely high. Depending on the configuration, the Tesla's got around 400 silent, torque-drenched horses, for pete's sake! And a 17-inch monitor that makes Apple look like an ancient Luddite backwater company! And you thought people taking a first test drive in the Tesla wouldn't be impressed? But the Tesla bears didn't do their homework. If they had just spent some time behind the wheel of a Chevrolet Volt, for example, they would not likely have dared being short Tesla. At 93% customer satisfaction, the Volt received the highest rating by Consumer Reports. Double the price and the Tesla wouldn't somehow make for an impressive test drive? C'mon! There are several reasons Tesla is a guaranteed success, absent an entirely possible out-of-left-field snafu. Steve Jobs once said that on an Apple computer screen, the icons needed to be finger-licking good. That pretty much describes the Tesla Model S control panel.
AppleWhich brings us to Apple. Ask yourself the question: What value would Apple bring to the TV market, actually making television sets? Giants such as Samsung and Vizio dominate the TV market today, selling outstanding panels at razor-thin margins. You can get your Apple experience on the TV by spending $99 on the Apple TV box, simply plugging it into any relatively modern TV. The TV might cost $700. Apple would surely charge at least $1,200 for its own equivalent integrated Apple TV. Now, do you want to spend $799 or $1,200 for that Apple TV experience?
Perhaps Apple has some truly innovative aspect to the TV business that the current -- or a future -- separate $99 Apple TV box can't somehow accomplish. Some of these arguments were also speaking against Apple entering the smartphone business in 2007, so you can't be sure. TVs require fortunes of working capital, as well as store shelf space. They are costly to deliver and install as necessary. Why would Apple go through that sort of pain, when a box and an HDMI cord can give the user seemingly all the benefits anyway?
Maps and traffic data Self-driving cars, (hey, Google!) iCould-based entertainment Location-based information Camera technology Speech control Yes, some of these advancements will surely continue to happen even in an arms-length scenario, but does this look any less logical than the TV business? Consider these signs and arguments for Apple acquiring Tesla instead: Apple and Tesla are located almost next door to each other Tesla is opening stores in mostly the same locations as Apple Tesla is already copying Apple's sales and service model Tesla's head of sales and ownership experience, George Blankenship, was Apple's head of real estate Tesla already took Apple's screen/icon look and made it even better Working capital to fund a TV business could easily exceed acquiring all of Tesla Smartphones, tablets and cars are all products of profound personal statement. Everyone knows what they have, and why. They are all lifestyle statements. Television sets? Not so much. If you are in the market for an $80,000 car today -- and which engineer at Facebook or Apple today isn't? -- the Tesla Model S is a lot more appealing than some Mercedes S-class or BMW 750. And if you are Apple, with $100 billion burning in the bank, shelling out for a $4 billion market-cap company of iconic importance to the future of technology sure sounds a lot more appealing than stamping out low-margin television sets. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.