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 theinvestors 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 aBlackBerry, most of them said "No, why would I want to look at myemail 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 theTesla Model S was going to be an awesome car is to have driven any ofthe other good electric cars already in the market: Nissan LEAF, Chevrolet Volt, Fisker Karma, BMW 1-series Electric or Ford ( F) FocusElectric. Yes, I know those are not all the same -- and certainly they aredifferent from the Tesla Model S -- but they are all basically veryimpressive to drive. Most of them cost materially less than theTesla. If you just extrapolate a little, you would easily arrive atthe 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 thatmakes Apple look like an ancient Luddite backwater company! And youthought people taking a first test drive in the Tesla wouldn't beimpressed? But the Tesla bears didn't do their homework. If they had just spentsome time behind the wheel of a Chevrolet Volt, for example, theywould not likely have dared being short Tesla. At 93% customersatisfaction, the Volt received the highest rating by Consumer Reports. Double the price and the Tesla wouldn't somehow make foran impressive test drive? C'mon! There are several reasons Tesla is a guaranteed success, absent anentirely possible out-of-left-field snafu. Steve Jobs once said thaton an Apple computer screen, the icons needed to be finger-lickinggood. That pretty much describes the Tesla Model S control panel.
Perhaps Apple has some truly innovative aspect to the TV business thatthe current -- or a future -- separate $99 Apple TV box can't somehowaccomplish. Some of these arguments were also speaking against Appleentering 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 Applego through that sort of pain, when a box and an HDMI cord can give theuser 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 inan arms-length scenario, but does this look any less logical than theTV 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 acquiringall of Tesla Smartphones, tablets and cars are all products of profound personalstatement. Everyone knows what they have, and why. They are alllifestyle statements. Television sets? Not so much. If you are in the market for an $80,000 car today -- and whichengineer at Facebook or Apple today isn't? -- the Tesla Model S is alot more appealing than some Mercedes S-class or BMW 750. And if youare Apple, with $100 billion burning in the bank, shelling out for a$4 billion market-cap company of iconic importance to the future oftechnology sure sounds a lot more appealing than stamping outlow-margin television sets. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.