Tesla Inc., in the person of its founder and CEO Elon Musk, has been marred with legal troubles on both sides, prompting investment experts and analysts to suggest that the carmaker is better off merging with Apple. However, one of the legendary figures in the industry thinks this decision won't spell well especially for the iPhone maker.
For Berkshire Hathaway Inc. chief Warren Buffett, it would be a "very poor idea" for Apple to put money on Tesla, a report from Fox Business said on Thursday.
Buffett, who is lovingly being referred to by his huge throng of followers as the Oracle of Omaha, thinks buying or merging with Tesla would be a wrong path for the Apple Watchmaker to tread on as it makes its bid into the auto business.
Apple has long been quite vocal about its desire to enter the transport sector, as evident in a plethora of rumors and reports pointing out to the so-called "iCar."
Scooping Tesla up from the ground would reportedly make it easy for Apple to dominate the auto sphere. Buffett thinks otherwise.
For the 88-year-old, it's all about building a long-term competitive advantage in the auto manufacturing industry, and this could prove to be more difficult to achieve than say, in the tech industry, wherein companies can simply look into a few factors such as processing speed, scale, and network to gain and maintain edge against other competition.
Obviously, Apple is one of the leading names when it comes to hand-held gizmos such as smartphones and tablets. The Cupertino-based tech giant was able to maintain its position in the upper echelons for quite some time already. However, there's no guarantee that Apple will enjoy the same winning streak in the car business.
In the words of the American business magnate, firms "can win in autos one year" but they may "lose the next."
Buffett pointed out that the competition in this sector is quite stiff, as there is a multitude of "big companies" around the world boasting vast reserves of resources. And this won't do well with Apple being an innovator in the field.
As what the mega-investor also said, these competitions will only just "copy" the new things Apple will bring to the table.
Of all the people to speak on this matter, Buffett does hold relevance. According to Market Watch, Buffett's Berkshire has the major stake in the Chinese electric vehicle company, Byd Co. Ltd.
