On the comparison of automakers to phonemakers

I just read an article where Tesla is compared to Apple. The analogy is interesting and has some merits. But I think they are taking it way too far. The auto market will not go the same way as the phone market did.

There are several reasons for that, but the main one is that when phones turned into smartphones they stopped being phones. The term smartphone is actually completwly missleading. It should rather be denoted nanoportable computer or something. And by that, a completely new set of functuons became available.

But this will not happend to cars. They will still be cars. Just that they will drive by them selves. The nanoportable computer we have will be the devices that will occupy the time we used to spend on driving. Not something new in the cars.

There are also a bunch of other reasons that the analogy is limping. The safety and security requirement on cars can not be compared to those on phones. Also the price tag is completely different. And the life span. Also the complexity of a car can not be compared to a nanoportable computer. Those are actually quite simple devices relying totally on Moores law. However that is not the case of cars. They are just so much more mechanical. And therefor complex.

Hence, in conclusion, Tesla is not the next Apple in the sense that they will obtain a 50% market share. But that belief is what makes their stock completely over valued.

As an interesting side note, Apple is big now, but it was bigger some time ago, and it will continue to decline. The idea with proprietary solutions that are not shared has proven a bad one over and over again (beta max, mini disc, ...) Thus, Apple will continue to decline and Android will continue to dominate. Price allays beats performance. And shared competition always beats proprietary in the long run.