Why Elon Musk Could Be Forced To Build a Smartphone

Twitter is the digital town square where influencers from heads of state to celebrities and media try to shape the public narrative. Elon Musk’s acquisition of Twitter has upended the existing rules and set in motion a chain of events that could lead to him building a smartphone.

Reinstating Twitter Accounts

The most controversial move by Musk since the acquisition of Twitter has been the reinstatement of former President Trump’s Twitter account, based on a Twitter poll. Musk tweeted, “Vox Populi, Vox Dei,” Latin for “the voice of the people is the voice of God.”

Although Trump has not indicated any interest in returning to Twitter, and it has been over a week since Twitter restored the account, Musk has faced tremendous flack.

Musk considers “Deplatforming a sitting President undermined public trust in Twitter for half of America.” Musk also reinstated other accounts, including professor Jordan Peterson, Babylon Bee, Project Veritas, Kathy Griffin, and Georgia Rep. Marjorie Taylor Greene’s account. 

Apple and Google Banning Twitter From App Stores

The possibility of Apple and Google banning Twitter from their App store could trigger Musk to develop a smartphone.

In a Washington Post article, Alejandra Caraballo, a clinical instructor at Harvard Law’s cyberlaw clinic, said, “Apple and Google need to seriously start exploring booting Twitter off the app store. What Musk is doing is existentially dangerous for various marginalized communities. It’s like opening the gates of hell in terms of the havoc it will cause. People who engaged in direct targeted harassment can come back and engage in doxing, targeted harassment, vicious bullying, calls for violence, celebration of violence. I can’t even begin to state how dangerous this will be.”

Yoel Roth, former head of trust and safety at Twitter, in an op-ed for The New York Times, said, “There is one more source of power on the web — one that most people don’t think much about but may be the most significant check on unrestrained speech on the mainstream internet: the app stores operated by Google and Apple. “

Twitter has acknowledged the risks posed by the Apple and Google platforms. The Form 10-Q SEC filing in 2021 by Twitter states “Our release of new products, product features and services on mobile devices is dependent upon and can be impacted by digital storefront operators, such as the Apple App Store and Google Play Store review teams, which decide what guidelines applications must operate under and how to enforce such guidelines. Such review processes can be difficult to predict, and certain decisions may harm our business.”

App stores banning social media apps is not unprecedented. Heralded as a Twitter replacement, Parler was banned from the Apple App store in 2021, shortly after Google also banned it from the Play store. Rebecca Mercer, the daughter of Robert Mercer is the founding investor of Parler. Robert Mercer is an American hedge fund manager and is the former co-CEO of Renaissance Technologies and the famous Medallion Fund.

Collision Course Between Twitter and App Stores

Last week, Phil Schiller, responsible for Apple events and the App Store, deactivated his Twitter account. Schiller regularly used his Twitter account to promote new Apple products, services, software, and initiatives. He also frequently interacted with customers through the platform. His account has had a following of over 200,000 people since it was created in November 2008.

Musk has complained about the high app store fees as he plans to increase the amount of money Twitter makes through subscriptions. Apple currently charges between 15% and 30% of digital sales as app store fees. The monopoly of Google and Apple is one of the main reasons they form a cornerstone of my moonshot stock portfolio.

In response to a Slashdot article regarding Google paying $360 million to Activision not to launch a rival app store, Musk tweeted, “App store fees are obviously too high due to the iOS/Android duopoly. It is a hidden 30% tax on the internet.” In a follow-up post, he tagged the Department of Justice’s antitrust division, which is reportedly investigating app store rules.

Twitter reported $5.08 billion in revenue in 2021. If subscription growth meets Musk’s goal, hundreds of millions will be funneled to Apple and Google, reducing the profit margin for Twitter.

Tesla Model Pi Phone

Elon is no stranger to innovation. He is the founder of SpaceX, The Boring Company, and Neuralink He has also had tremendous success as the CEO of Tesla, which propelled him to the top of the billionaires’ list.

Investors who placed their faith in Elon Musk and his innovative capabilities have been handsomely rewarded. Over the last five years, Tesla increased in value by over 760%, handily beating investing in the S&P 500, which rose only 55%.

The Tesla smartphone has been the subject of rumors since March 2022, primarily driven by unofficial mockups on YouTube and Twitter. 

In a tweet, Musk squashed the smartwatch and phone rumors as “yesterday’s technology.” Musk did hint at “Neuralinks are the future,” indicating that the current technology platforms are no longer at the cutting edge. 

Only when Tesla confirms details about the Pi Phone will there be a reason to believe in its existence. The rumors list multiple features of the smartphone that read like science fiction.

  • Controlled by thoughts using Neuralink
  • Charging via a transparent solar panel on the back of the device
  • Starlink connection for the smartphone

The technology for some of the features has yet to be ready for mass production.

Musk is notoriously secretive, so it’s not unlikely that a Tesla Model Pi could appear in the next few years. 

Since smartphones are still making a lot of money and Tesla is one of the most popular tech companies, there could be high demand for a Tesla smartphone.

The Pi phone is highly unlikely soon. However, Musk might be forced to create a simpler smartphone version if Apple and Google boot Twitter from their app store. In response to Liz Wheeler, Musk tweeted “I certainly hope it does not come to that, but, yes, if there is no other choice, I will make an alternative phone” 

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  1. That would certainly be something. He’s already destroyed billions and billions of Twitter’s value.

    Trying to compete with Google and Apple in smartphones would be the only thing dumber. HP couldn’t do it and they had Palm’s OS when tons of apps. Amazon couldn’t make its Fire phone work. Facebook couldn’t make a phone work either.

    The best hope would be an app store like Amazon’s Kindle store, but he’d still have to make it the dominate system that everyone uses.

    I don’t know how they get it past regulators, but Musk should sell Twitter to Facebook. He might still be able to get 15 billion for it.

    1. To be fair Twitter was the only social media company which did not provide any shareholder value. Any investors post IPO lost money in it.

      The current FTC chair is raising questions about Facebook’s acquisition of Instagram and Google’s acquisition of YouTube. Twitter and Facebook merger would be a non-starter.

      I would not be so quick to dismiss the Twitter acquisition as a loss. Reading the book Liftoff I can see his perseverance in trying new things despite the failures during the early days of SpaceX.

      A phone linked to Starlink would be on the wish list of many individuals.

      1. I bought a good amount of Twitter stock at about $15 a share and sold a good amount at $70.

        And yes, I can’t imagine how they would get a merger past regulators, but Facebook and Twitter are both very, very distressed properties. I’m not saying that regulators would have sympathy, but the combined Facebook-Twitter would be less powerful in the post-Apple-privacy-update world than Facebook was alone. You are right that’s it’s a non-starter, but it’s the only that makes sense for both of them.

        The financing for Twitter cost a billion dollars in interest payments. Musk can float that for a while, but it’s going to have to turn a big profit soon.

        I can’t imagine too many people would want a Starlink phone if it didn’t have apps. I think most people are happy with the 5G that they have. Building out all those apps (it’s a chicken vs. the egg problem) as well as making the physical hardware would be brutal.

          1. What if didn’t have apps, just made phone calls? I could see it for a niche (hiking or something like that), but I can’t imagine it being something that I’d carry around with me in addition to a phone with all my apps.

            The physical phone is the easy part of the development – can subcontract that out or partner with a phone maker (Motorola, etc.) to put a Starlink chip in there.

            1. I can access most apps like twitter and maps through a web browser and prefer connectivity over convenience of apps. Of course, I don’t use a lot of apps and also travel to remote places post FI so I might not be the typical user. I am sure most folks who travel though world prefer to step off a plane and still be connected without jumping through hoops.

  2. I hope he continues too make the main stream political giants in tech angry. They have no idea what freedom of the press stands for. Elon is going too do whatever he wants. The Left will just have too deal with him or accept him.

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