- The Tesla Model 3 is poised to change
the auto industry as we know it,
much like the iPhone did to the cellphone market.
(upbeat techno music)
Gene Munster, longtime Apple analyst
and co-founder of Loup Ventures,
put out a report recently stating
that the Model 3 could change the world.
In his report, he states that the study they did
on cost analysis of a Model 3 shows
that it will only cost 13% more than a Toyota Camry
over a five year period, even though the Camry
costs about 40% less initially.
This is not including any state or federal
tax incentives that the purchaser may receive.
They believe that this will help Tesla
grow their total addressable market
to about 11 million people from,
what many expect their current market as,
around one million.
So 11x based on this cost analysis
is a pretty big bump.
If they were to capture just 25% of those 11 million
potential customers, they would be bringing in
over a hundred and five billion dollars
just from the Model 3.
Now that, along with the S and X sales
and the new models they're going to be coming out,
would probably push their stock price
even higher than what it is now,
likely making them the most valuable automaker in the world.
But let's think about this for a minute.
How did the iPhone change
the cellphone market so dramatically?
In 2005, Apple began working on a new multi-touch display
that would allow you to type directly on a screen
without the need for a keyboard.
At the time, this was unheard of
other than in tablet computers.
After developing this technology,
Steve Jobs pushed the envelope even further
by wanting it to work in a mobile phone.
Again, at the time, completely unheard of.
Here's what the most popular phone was at the time.
This phone was amazing because of how thin it was
and how sleek everything seemed.
And, here's the phone I had.
Yep, I'm a big nerd.
But, I will say, that phone was pretty innovative
for its time as well.
In fact, when I first read about the iPhone,
I was doing so tethered from my laptop
to that phone, while traveling to work
and even Apple didn't release that feature
in the iPhone for many years to come.
In 2007, Steve Jobs unveiled the iPhone to the world
in what has to be the greatest product launch of all time.
In his address, Jobs said, "I have been looking forward
to this for two and a half years" and that,
"Today, Apple is going to reinvent the phone."
Jobs introduced the iPhone as a combination
of these three devices.
A widescreen iPod with touch controls,
a revolutionary mobile phone,
and a breakthrough internet communicator.
So the rest is history, right?
The iPhone came out, everybody in the world bought one,
and they became the world's most valuable company.
Well, not exactly.
You might be surprised to know that, even today,
Android is by far the more popular device around the world,
making up over 85% of smartphone sales,
compared to Apple's 13.8%.
In the US, the story is the same
with Android phones far outselling iPhones,
even though most people likely assume
everyone has an iPhone.
Truth be told, I actually just switched
over to an iPhone myself.
I've been a very longtime Android user,
even going back to the very first Android phone
that came out, the G1.
But nowadays, they're so similar
in their capabilities and the designs and everything,
it just was easier for me to get one
with everyone else in my family also having one.
Android really took off because the iPhone is expensive
and Android offers a similar experience
for a fraction of the cost.
To make things worse on this front,
the next iPhone is rumored to cost
over a thousand dollars US, putting it out of reach
for literally billions of people around the world.
So while you may think of the iPhone and a smartphone
as kind of the same thing, they're almost synonymous,
the iPhone itself is not the world leader
by nearly any measure.
This hasn't stopped Apple from becoming
the world's most valuable company, however,
with a current market cap of over
eight hundred billion dollars,
well on their way to becoming the first company
to be worth more than one trillion dollars.
Without the iPhone, Android wouldn't have taken off
and companies like Samsung that famously copy their designs
wouldn't be nearly as successful.
On the flip side, without these competitors,
Apple wouldn't be challenged to keep pushing
their designs and technology to new heights.
So if the Model 3 does change the world
and set a new standard in the auto industry,
likely the biggest people benefiting from this
will be us as the consumers because it'll force
all the other automakers to follow suit
and make better cars.
Otherwise, they'll face the same fate
as the Motorolas, Nokias, and Blackberrys of the world.
And while, yes, when you compare the Blackberry
to the iPhone, it's very much like what you find
with the BMW 3 Series compared to the Model 3,
with the minimalist design, everything touchscreen.
I really think the biggest comparison or similarity
between them is what the Model 3 is doing
in terms of performance, in terms of simplicity,
in terms of autonomous driving, all the more
advanced features of the vehicle, which is a lot
of what we saw with the iPhone when it came out.
Really, the design is one element that's gonna make it
attractive for everybody, but the tech and the advanced
capabilities are what gonna really
make you fall in love with it.
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