The Industry

Elon Musk Has Reached the Limit of Things He Can Do Without Consequences

The limit’s name is Apple.

CHICAGO, ILLINOIS - NOVEMBER 28: The Apple company logo hangs above an Apple retail store on November 28, 2022 in Chicago, Illinois. Apple is currently facing shortages in iPhone supplies due to COVID-19 restrictions in China and unrest at one of Apple's major Chinese suppliers.  (Photo by Scott Olson/Getty Images)
The forbidden fruit. Scott Olson/Getty Images

You are Elon Musk. You possess the not-wholly-unjustified sense that you can beat anyone in business combat. Being the richest guy in the world confers a certain steamrolling feeling that is hard to shake. Some of that vibe is even grounded in reality. For example, you can more or less use securities law as toilet paper while building up shares in Twitter and not lose a wink of sleep over it. You can hire excellent lawyers and deploy them for limitless hours against your critics and enemies. The worst day of your life is still a day in which you have more wealth than anybody else.

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Some of this strength is only in your head, though. Being you has privileges and curses, and one of each is that you’re surrounded in large part by sycophants. Some of them have fancy jobs and want to do business with you. Most of them, numbering somewhere in the millions, will never meet you but will cheer you on all the while, believing there is genius in everything you do. They will believe you can browbeat an extremely well-lawyered public company into getting out of a deal that has no apparent legal out. (To be fair, Wall Street may also believe that.) When you get stuck buying that company, and things immediately get rough, you might pick a fight with the most valuable company in the history of the world. What looks like desperation to most people will look like a stroke of nine-dimensional chess to your fanbase. You could accidentally shoot yourself in the testicles with a rifle, and your most devout followers would spot a long game to start a prosthetic genital company at a $2 trillion valuation.

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You are not Elon Musk. But anyone can see that Musk is a powerful enough figure to take on a whole bunch of companies, if he were inclined, and bend them to his will in a host of ways. He could just buy them, as his net worth exceeds the total market capitalization of all but a few dozen public firms. (He couldn’t sell all of his owned stock for what it’s worth on paper, but you get the idea.) If Musk saw an advantage to breaking or buying a given company, there is a good chance he could swing it.

Do you know one of the few companies Elon Musk cannot beat in a street fight? Apple. It’s a Cupertino, California–based technology business that makes cellular phones, computers, and timepieces. Over the last few days, Musk has been at odds with this company, either because he sees an opening to improve his bargaining position for Twitter or because he really thinks he can dislodge Apple from its position of dominance in the world of smartphone operating systems and app distribution. Occasionally, Musk realizes there are limits to his ability to create reality. This is clearly one of those times.

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It isn’t clear how big an Apple problem Musk has. He appears to at least have an Apple problem. He tweeted on Monday that Apple had “mostly stopped advertising on Twitter” and asked, “Do they hate free speech in America?” If Apple did cut most of its Twitter advertising spend, that would put it in league with many, many other advertisers, who did so around the time Musk was cutting back Twitter’s moderation staff and signaling a preference for less regulation of content on the platform. Advertisers, weirdly enough, don’t like the idea of their ads appearing next to abuse or harassment. Apple is a huge ad buyer for Twitter. The Washington Post reported that it spent $48 million on those ads in the first quarter of 2022, accounting for more than 4 percent of Twitter’s quarterly revenue. Apple cutting back on ad spending on Twitter is a big problem within a big problem, that being that advertisers are uncomfortable. How much Apple has actually dialed back its spending is one of many uncertainties in a story Musk is framing for the rest of us.

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The much bigger potential Apple problem for Musk has always been more theoretical for Twitter: that if Twitter didn’t meet certain standards, Apple would yank it from the App Store so that iOS users couldn’t download it. Most people use Twitter on their phones. A lot of people have iPhones. It would be bad for Twitter if people with iPhones could no longer download Twitter’s app. Twitter needs more users—and more good ideas—to make a lot of money, which Musk will need it to do in order to avoid reaching further into his own pocket to cover the huge debt payments he agreed to in financing the deal. Musk said this week that Apple was threatening to pull the Twitter app. The reasoning wasn’t clear, nor is it clear what Apple did or didn’t say to Twitter at any point. Musk has narrated this entire story. A key Apple executive deactivating his personal Twitter account after Musk’s takeover is about all we’ve gotten from Apple.

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Anyway, Musk put his guns down on Wednesday night. After apparently visiting Apple to meet with its CEO, Tim Cook, Musk tweeted, “Good conversation. Among other things, we resolved the misunderstanding about Twitter potentially being removed from the App Store. Tim was clear that Apple never considered doing so.” OK, then. Twitter is not going to get into a big fight with Apple, for now.

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Musk is a proud guy, and it does not exactly seem like him to go from publicly accusing someone of sabotaging him to sending a conciliatory, de-escalating statement about that party two days later. On Twitter, where Musk clearly spends a ton of time, he has long been a god, with many millions of followers who would lay down their keyboards for him at the snap of a finger. Musk has recently taken up the vacancy Donald Trump left behind as Twitter’s main character of every single goddamned day, and he’s found even more people to egg him on as he casts his attempt to get something out of his many-billion-dollar Twitter investment as a holy crusade to “protect free speech.”

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Fortunately for Apple, Musk’s meeting with Cook has clearly satisfied him that Apple is not out to end freedom of speech in the United States. Thank heavens.

Alternatively, Musk realized that Apple is Apple. It has more money than he does. And Musk controls Twitter, but Apple controls the very phones that people use to get to Twitter, and maybe Apple is one of the businesses large enough that it doesn’t have to worry that much about what Musk says. Certainly it’s worried some, because Tim Cook is a busy guy and was hosting Musk at his headquarters the same week Musk started yelling at him. But there are fights Musk can win in a knockout, and there are fights he cannot, and a fight with Apple is one of those fights that will cost him a lot of blood for little treasure.

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As this brief saga in an era of endless Musk sagas draws to an end, or at least to a pause, there is an irony: Musk is pushing a pretty good cause for which he just happens to be a bad messenger. As Scott Nover illustrates at Quartz, Apple has immense market power in the app business and arguably uses it to anticompetitive ends. (The same can be said of its chief rival in this area, Google.) There is a theoretical world in which a tech billionaire like Musk puts considerable muscle into a fight with Apple over the structure of the App Store and how Apple charges developers, and as a result, the ecosystem gets better for developers and maybe, down the line, for everyone who has an iPhone. That is a fake world I just made up and not the one Musk is actually in, where he is furiously trying to avoid losing a ton of money on a deal he never should have made. But there are other tech executives actually trying things along this line, and if Musk is a true believer in their cause, maybe he could help them. You know, for the sake of freedom and innovation.

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Musk is a notorious changer of his own mind. Nobody can know how long he and Apple will remain in détente. Musk has indicated a recent belief that he can use his bully pulpit to get huge companies, including ones that are not the most valuable company in the world, to come around to him under threat. In his first weeks owning Twitter, he threatened a “thermonuclear name and shame” of advertisers that had paused their spending on Twitter. It was silly, because internet-threatened conservative boycotts are almost always just hot air, and there simply are not that many real human beings in the world who care whether General Mills is running ads on Twitter. People will do a lot of odd things at the feet of Elon Musk, whether he cares about them or not. They just aren’t going to stop buying iPhones for him. They need them in order to post.

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