Elon Musk wrote on the platform he owns: "Apple has mostly stopped advertising on Twitter. Do they hate free speech in America?" and "Apple has also threatened to withhold Twitter from its App Store, but won't tell us why". In response to presenter Liz Wheeler's tweet, he in turn announced: "I certainly hope it doesn't come to that, but yes, if there is no other choice, I will make an alternative phone."
What can Tesla afford to do?
Elon Musk is famous for accomplishing things that seem impossible. From launching rockets into space that still return to earth on their own, to creating the Starlink internet, to buying Twitter shares for more than $40 billion. Wouldit now actually challenge the iPhone maker? Let's try to come down to earth and compare the capabilities of the billionaire Tesla's biggest company (Tesla) and Apple (Apple).
There is no denying the tremendous growth rate of the electric car manufacturer. The company's revenue growth was 55.9% year-on-year and operating profit rose by 84% in the same period. The manufacturer's net margin now stands at 14.95%, with an average of 7.5%. - according to Statista. The company additionally has as much as US$21.1 billion in cash and cash equivalents to spend on research and development. However, it seems that producing another smartphone with its own system (independent of Apple or Google) would not happen overnight. Therefore, even if the decision had already been taken, we would have seen the results, as with electric cars, after a few years.
It seems that investors have recently become pessimistic about the future of Tesla's shares, which have fallen by more than 55% since their peaks.
Source: Conotoxia MT5, Tesla, Weekly
Apple still with no official response
The company of the smartphone manufacturer, among others, has not yet issued an official response. However, it seems that the action limiting the availability of Elon Musk's app in the App Store could be due to the company's policy regarding the quality of Twitter's verified content. Excluding the app from access to iPhone users and reducing advertising spend on that platform could be a significant blow. According to ad management firm Pathmatics, Apple was the top advertiser on Twitter in the first quarter of this year, spending around US$48 million on advertising here, which accounted for around 4% of the company's total revenue.
Source: Conotoxia MT5, Apple, Weekly
Apple is currently the world's highest valued company with a capitalisation of US$2.25 trillion. It also boasts satisfactory results. Revenues are up 8% year-on-year and operating profit is up 4.66%. The company appears to be leveraging its competitive advantage with a high net margin of 25.31%. Meanwhile, according to the Gurufocus platform, the average for the technology sector is 19.6%. An additional advantage for the manufacturer with the bitten apple symbol is USD 48.3 billion in cash and cash equivalents.
Looking at the data presented, it seems that creating a new smartphone that enters mass production, maintains standards and gains global popularity may be even more challenging than producing an electric car. Therefore, it seems possible that the conflict would be resolved in the coming weeks. Otherwise, Twitter could be the biggest casualty.
Grzegorz Dróżdż, Junior Market Analyst of Conotoxia Ltd. (Conotoxia investment service)
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