Comment by kentlyons
3 years ago
There's a few things to unpack here. One is the perception of the iPhone. Eg here's a quote from PC Magazine I saved when it came out: "Poor business e2mail and PIM connectivity. Bad audio quality on phone calls. Tons of GSM buzz on nearby speakers. Virtual keyboard hard to type on. No phone functionality with iPod speaker docks. It’s the best portable media player ever. It’s possibly the most fun we’ve ever had with a handheld device. It browses the Web like a champ. But poor phone call performance and missing messaging options make us unwilling to recommend it as a phone." There are similar other criticisms. It was not part of the category of smartphones at the time as seen by the people using them.
The early criticisms about Tesla's build quality and a lot of the arguments about a battery not being good enough seem to follow a similar argument. Is the original Model S as good as a top of the line gas car at the time? By most metrics used at the time, no. The criticisms in the peer comment by lbsnake7 are similar - those are legacy metrics of a car. However it did find a customer base that valued what it offered, bad seats and poor panel gaps and all (just like the GSM buzz and non-replaceable battery).
As far as the timeline, the slowness has surprised me a bit but I think comes down to a couple of things. One is the turn over time of getting a new phone vs a new car. Cars are much slower. And another (which might be related) is the price point of cars being orders of magnitude larger than phones. And finally, it's taken a good while for Tesla to ramp - it's been supply constrained forever (although there might be signs of that shifting).
So you've provided your perspective on why you think the iPhone wasn't that disruptive at the time (though, given that, a year after its launch, numerous phone manufacturers announced their own smartphones, I think you're rewriting history a bit, but whatever, that's not actually the point of the conversation).
At the same time you've claimed Tesla will be the iPhone of the car world. You claimed "In this way [Tesla] is similar to the iPhone coming in and basically killing Nokia, Motorola and Blackberry."
I'm asking why you believe that. Can you expand on that?
I've heard claims of vertical integration, but that hasn't proven to be a major differentiator, and in fact is turning out to be a liability (see: reliance on China).
I've heard claims of manufacturing automation, but that's turned out to largely be a failure.
I've heard claims about the synergy with Solar City and their battery development, but that's proven to be a very small moat, at best.
I've heard claims about the value of OTA updates for software, but that too hasn't been that disruptive, and now other manufacturers are doing the same.
I've heard claims about their abandonment of the dealership model, but that doesn't seem to have been much of a differentiator, and given their service reputation, seems to have become a liability.
Elon is selling the idea that FSD is the critical factor, but FSD is increasingly looking like an unattainable dream, at least with the hardware platform Tesla currently has in the market.
So what's your take? Why do you still think Tesla will be like "the iPhone coming in and basically killing Nokia, Motorola and Blackberry"? What am I missing?
You've also explained why you think Tesla, at 20 years, hasn't yet had the disruptive effect on the market that you seem you be predicting, laying it at the feet of market structure and so forth.
But you haven't explained why you believe that will change, either.
It is the part just before you cut in my quote: "it's playing against a different set of customer values". That is how Christensen defines a new market disruption. That is not enough for a successful new market disruption, but is one of his key characteristic of one. So I believe the values people are finding in their purchase of a Tesla are radically different than those buying ICE vehicles.
I think that might have been true once but a) the futuristic/revolutionary reputation of Tesla has come down to earth through the trials of the Model 3 and the failure to deliver FSD, and b) Elon's antics, both during COVID and through 2022, appear to have put a sour taste in the mouths of people who bought Tesla's for the values they purportedly represented (sustainability, etc).
So honestly I don't believe this is the case anymore. I think, as more EV competition is entering the market from both new and established automakers, they're now just another EV that happens to have great brand recognition but an eroding brand reputation, a good charger network, average to below average quality, a very weak record on customer service, and a CEO that's just another crazy, out of touch billionaire.